about employment right now. >> alcoa not exactly delivering. thank you so much for being here in this jam-packed show. really appreciate it. "fast money" is coming up in just a couple seconds. melissa lee, what are clown grades? >> clown grade or downgrade. josh graham coined the term. we're going through today's downgrades, asking the traders if they think they're clown grades. >> i love it. "fast money" starts right now. at the nasdaq in new york city's times square. consumer tug-of-war. the widening gap between the high-end and low-end retail plays. and brian kelly's new short position that has others on the desk fired up. and digital movies jumping by 50% last year. the chair of lion's gate will tell us his strategy. let's get straight to our top story tonight. the u.s. consumer in focus with

a tale of two retailers right now sears, plunging in the after-hour sessions after big losses in the fourth quarter. abercrombie & fitch raised its guidance and is soaring in the after-hour session. josh brown, sears holdings. what do you think of it? >> it's not been in good shape from a retailer perspective. they haven't done anything right for years and years. management's a mess. they have internal fifedomes that fight with each other. you have an underlying bit in the stock for a long time. he owns most of it. you're not going to short something where anything can happen. that's breaking down. people are giving up and walking away from the stock. the technicals on this are probably the worst i've seen since jcpenney, frankly, a year and a half ago. it's an utter giveup. now, it's a discussion of how much worse is the deterioration going to be before, frankly, some top people fire themselves and replace themselves with real

retailers with real experience. so, i wouldn't touch it. >> there's no eddie lambert put to the stock right now? >> it's a discount. >> it's working against you now. >> it has for quite some time. think about it. this is a stock with a monstrous short interest. i'm not telling people they have to get short on the back of this. we've been trying to play it from the short side because you can have some sort of event where these folks get squeezed out. to josh's point, this stock does the slow drip lower, lower, lower. shorts have been winning. and at certain points, there's nothing that eddie can do. >> earnings growth is negative 28% over the last five years. it really doesn't matter, the fact there's a lot of shorts. at a certain point, the shorts are right. >> it's an irrelevant stock at this point in time. nobody ever goes there. look at the two that's going on right now. abercrombie & fitch doing well. sears going awful. when i was a kid, i got my toughskins at sears. >> what? >> toughskins.

you never had stuff toughskins. >> what's a toughskin? >> it's a jean that had extra padding on the knees. >> and on the -- >> and on the inner thigh for chafing. >> look at that. >> i want to go to abercrombie & fitch. this is a name that grasso has pointed out as a zero to hero trade. had difficulty last year. look at the bounce here in the after-hour session. >> it held that level of 30, 31-ish. i thought in the face of all of the headwinds, the stock managed to hold that $30 level. i thought it was worth a flier. and the action postbell, means you should have taken a flier if you didn't. but, real quick, it is running into resistance. josh and i were talking about this, around the $38, $40 level. i would not rush in as a buyer tomorrow. >> we talked about this.

this $30 level is where it bottomed out in 2010 and subsequently bounced. and a number of times in 2012, for whatever reason, traded down, held that level. and i remember the conversation on the show. we said to steve's point, it as long as it holds that 30 level, it's worth it on the long side. i'm not in the camp that you fade this. i'm not saying go buy it tomorrow. but there might be more room on this to the upside. you might catch a move north of 40 at a certain point. i like the way it sets up. >> they talk about lbo or a takeout. and it usually runs right back up to 50s, mid-50s. and you see where the stock settles back in. but it was really ripe for that bounce. i don't know how long it lasts. >> let's check in with dominic chu at headquarters, watching another retailer with an after-hours move. >> talk about what guy and josh are talking about in charts. the retailers coming with 5 below. shares are getting whacked. they're down 15% just in the

after-hours. the company reports that same-store sales in the quarter and january 4th, fell by a percent. q4 sales will be between $208 million earnings of 46 cents. both fall below estimates. the ceo said the company did not meet sales expectations for the holiday season. he blamed the shorter shopping season and bad weather in the northeast and the midwest. already in negative territory. this adds to it. >> we have the data point from family dollar also. both of these discount retailers. >> retail has been lumpy all year. you have to be an expert. it's almost like the biotech sector. if you don't get it right, you'll get killed. you mentioned family dollar, what a reversal today. i'm sure guy adami was all over it. that's something i would buy for a trade and a trade only. >> is there a belief that you

should trade up to where the gap should close? >> actually, the gap closed most of it. there was tremendous volume today. it's a trade. not something i want to be in long-term. but it's bottomed for the short term. >> it's all about the trade. it's identifying the risk/reward. and he brings up a good point. to sears, and i'm not saying it's going to hold. but sears could trade down to that trough bottom we saw and bounce, as well. the move that abercrombie & fitch is seeing today. business is a disaster. i don't think abercrombie & fitch business has improved, either. >> the only thing different about sears to abercrombie, is teens like the product. and they can cycle through. you can get a trend where it would cycle back in. sears, i'm not sure that happens. >> it's a tough trade. you don't know when it's going to happen on the fashion side. what you're doing with the down and out retailers, it's like russian roulette. you'll get lucky sometimes. they'll have that huge bounce off the bottom.

when somebody whispers. but that's not good investing. >> sears, by the way, two-year low. let's dig deeper with dana telsey. she concentrates on the retail sector. dana, good to see you. >> thank you. >> what can we glean about the sector given the data points we got today. lower outlooks from bed, bath & beyond, we had the data points from sears. and the upside from abercrombie & fitch and croosco. >> you had traffic that was weak. you had weather that impacted a lot of the retailers. overall, if you came out clean on inventory, that made the difference. you had to be able to cycle through that inventory. promotions was the name of the game. i think as we go into january now, it's the cleanup month. a small part of the business. what's new for 2014 in product is really the message. >> dana, gap had a huge move over the last couple years. stalled out this summer. it's been trading lower ever since. it's bouncing on what i think a pretty lousy same-store sales

numbers. is that a relief rally? maybe giving them break on the guidance. but the comps were pretty lousy. were they as bad as i think? >> compared to the rest of the group out there. just coming in positive is a victory. also the fact they said their guidance is going to be within the range is an encouraging sign. and at the high end of the range. think about what they're doing. the online channel of business. the omni channel business. inventory management is better than it's been. and the old navy division compared to the gap division, that value message is clear. >> dana, it's a trading show. where do you get the most bang for your buck here? everyone loves macy's. we know the story there. but is it at urban outfitters? is it an abercrombie? where do you go that's somewhat safe but you're going to get the upside huge potential, versus macy's that's really at the high end of the range right now. >> you called out one of the top picks for 2014.

we like urban outfitters for 2014. you have free people and anthropology business that are selling at full price. while urban outfitters is cleaning out the inventory. that's where the change could be. and you have the ability with cash on the balance sheet. they're investing in the future with the omni channel initiatives that they're doing. we like urban outfitters for 2014. i think asina's very interesting for 2014. maurice's, dress barn, lane bryant, small-cap name that's put people in place from opportunity to cost synergies. >> it's brian kelly. you talked about inventory management and the people that didn't do that well are going to have to clean it out. does that benefit a t.j. maxx, where they might be able to get these at a discount? >> it certainly does. we've seen the value price for a long time. and investors say, is the multiple too high? my thought is, this is a different business than what it was five years ago. what you have at t.j., ross

stores and burlington, they have leverage on store growth, operating margins. and they're getting better brands. >> dana, thanks for your time. grasso, urban outfitters. is it your top pick for 2014? >> i think i go back to the abercrombie. i think it's good for another 20 points. it has to settle in and hold the mid-30 level. but urban outfitters, on the chart, i'll take a risk and get $5 to $7 upside. >> josh? >> i think people should look at a finish line footwear. this is a stock that doesn't get a lot of attention. it's very cheap right now on a cash flow to enterprise value basis. what's really amazing is the trend. it's been outperforming the xrt, going back to september. every time it has a pullback, it pulls back beautifully to support. and the buyers come on time where they should. that trend is a thing of beauty. i think it's something that a trader and an investor could get comfortable with on the entry points. >> for consumer spending here in

the u.s., to europe's economy. check out the front page of "the final times" today. this caught our eye today. that eurozone woes are coming to an end. brian kelly says this is all wrong. >> i love headlines like that. that means that everybody's already bought in. that means that now it's time for a change. we look at the eurozone. we're seeing portugal, italy, yields all at the lows. and the stocks have been off their lows. they've almost doubled in some cases. doubled and tripled. here's a situation where you say, what's going to happen over the next six months or so? you look at the economy in the sew eurozone, italian unemployment. and youth unemployment is 41%. that's a massive number. and now, you have stocks that have just absolutely gone through the roof. for me, i got short europe. i did it for the euro stocks. but i think that's the way to play this year. and look at french yields.

french bond yields. everything else has been going down, they have been going up. that's the canary in the coal mine. you don't want france to have a debt problem. >> you're on the other side of this trade. >> i don't know what brian's talking about. i have a chart that comes from steven sutmyer, from merrill lynch. what the chart is showing is a five-year period of time. that's european stocks in a ratio chart versus the united states stocks. if you look at that ratio, that's starting to bottom out right now. i think that european stocks on a mean reversion basis, have a ton of ground to make up. and i think a layup trade is to be long europe and look at that row for the united states. you're talking about p.e. ratios of 11-times and 12-times earnings, versus u.s. small caps at 19 1/2. u.s. large caps at 17. this is an easy trade to make. a lot of the stuff that brian is worried about, is very well-known. very well understood.

and i think the prices, the prices and the discount, relative to the u.s., are already pricing that in. i want to say one other thing. and i think this is very important people understand. european banks are going to be the tell. they're going to be the deciding sector that tells you that it's a green light for these markets. eufn is an etf to take a look at to gauge that. that just broke through the 2011 resistance point where it sold off from. and i think it's about to go bananas to the upside. >> it already went bananas, first of all. >> no, no, no. >> look at the european banking index. it went bananas -- >> we're talking about a -- i'm talking about six months to a year. this market could outperform the u.s. by a huge margin. if things continue on the course they're on. >> not from these prices. not at all. you're looking at the banks that have already gone up. and the only reason why they've gone up is they hold the sovereign debt in europe. >> european central bank held a meeting. they did not -- they did not

feel the need to do more stimulus. that speaks volumes. >> they raised rates. >> spanish unemployment is at a five-year low. all of the bond yields have shown power. >> the biggest exporter is china. that economy is slowing down. the other exporter is the u.k. who does most of the credit of emerging markets? european banks. if the emerging markets are falling apart, european banks delinquency rates are going up. >> are you looking at pmis in these countries? >> i'm looking at pmis. >> let's look at emerging markets. emerging markets have gotten whacked this year. they had a tough way in terms of the stock market's e.m. you pull up e.m. if e.m. is in trouble, doesn't that make it harder to make the case for european stocks which depend on e.m.? >> which e.m. is in trouble. we can't look at e.m. like it's a big block of ice and everything is the same. >> brazil. turkey. >> hold on. let's take them and take them in

half. which countries are funding themselves? and which countries have deficits? turkey is a nightmare. brazil is having trouble. indonesia. i'm not equating that with investing internationally in developed countries like europe and japan. there's areas of the emerging markets that are funding themselves independently. china is not borrowing from other countries. i think we need to delineate -- >> china is europe's biggest customer. if china goes down, europe goes down. you can't invest in just columns and not pay attention to all of it. >> china goes down, the united states is okay? >> no. >> you're shorting the u.s. by that logic. >> i'm short the s&p 500 right now. >> good luck. >> good conversation. >> nice heat. as we like to call it in the tv biz. how is this for a rally? intercept pharmaceutical, jumping 250% today alone. the studio behind "the hunger games" will tell us about

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what, what? >> time for today's top trade. >> what is this? >> i don't know. it's from a different era. >> justin timberlake. >> it's jimmy page's birthday today. 70 years old. and they're playing justin timberlake. okay. >> first up, huge move for shares of intercept pharmaceuticals, rallying more than 280%, after a clinical trial for the company's liver therapy was stopped early because patients showed great improvement. we should note the big run in the etf for the past month. it got driven higher today. new high on ibb and btk on the backwards. >> i would love to say i saw intercept coming. but we did see the biotech coming. we talked about it off the goldman downgrade a week or so ago. we didn't call it a clown grade. i wasn't clever enough. there will be analysts that come out and say the exactly the

opposite. you'll see celgene north of 170. gillian has a lot of room. someone just slapped 131 price target on that. and the real interesting trade here is amgen, risk/reward, around 118 or so. i think amgen has upside. >> there's a lot of anticipation surrounding jpmorgan health care conference. a lot of the stocks, the ceos come out, they talk. the stocks move. a lot of people are positioning for that. >> this was a big week. if you pull the tapes, you'll see guy adami guaranteeing that someone would come out and upgrade celgene. that's what i would call bringing the lumber. >> yep. >> moving on to solar air. solar city catching another upgrade over at bear. the firm calling it its top pick. >> $5 we go back to european banks.

>> you throw off -- >> solarcity. >> i had a shtick. >> it's leverage for the u.s. commercial markets. >> here's the story with solarcity. this is like the bachelor. and all of the analysts are fawning. i love you. look at your abs. this goldman upgrade last week looked like it might have been a top tick because it was so bullish. and lo and behold, baird makes it number one. this is the new king of residential installments. the residential solar market is on fire. solarcity figured out if you do it with a lease, instead of forcing people to buy with a big upfront payment, you have huge adoption. and that scale brings your costs down. they're just rockin' it. they were one-third of all residential installations in q3. that's happening with the stocks. the analysts love it. i don't know how much longer it continues. it's an expensive stock. but it can totally stay that way, so long as the good news

keeps rolling in. >> baird is estimating 20% growth in the u.s. residential market. >> we're hitting on the cost per megawatt is making the projects on an industrial level and residential level do able. and they're financing right now, can finance anything. >> ford motor, stock ending the day higher after the company announced a dividend increase. grasso? >> this stock and general motors are running neck and neck in 2013. general motors cleared its headwinds and ran away with it. ford, now, great balance sheet. always improving their products for the consumer. this is the place you want to be. ford versus gm, i'd be a buyer of ford. as digital movie sales soar, what could it mean for the filmmaking companies? we'll go to the vice chairman of lionsgate. and a slew of downgrades hitting the street today. are they clown grades or downgrades? the man who coined the term, josh brown, will weigh in. that's next. [ male announcer ] the new new york is open.

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♪ that's for you. guy adami. that's for you. yeah. he called it. all right. >> that's great. >> digital movie sales jumped to more than $1.1 billion. this according to new data from the digital entertainment group. lionsgate behind "the hunger games" says digital is driving growth. michael, good to see you. >> you promoted me again. thank you, melissa. >> vice chairman. >> president/ceo.

>> i'm sorry, john. in terms of what you're seeing in terms of revenue from your library, we've seen that shift to digital over the past five years, correct? 62% five years ago from package media. now, down with digital and other sources bringing up the rear here. how quickly is this accelerating now? >> well, it's a big growth area for us. if you look at what comcast did a couple months -- actually a month ago, with selling electronic sell through of product. and competing head-to-head with places like apple. that's good news for us. i expect all of the msos, all of the cable companies to start selling electronic sell through product. that's a new revenue source for us. and we're continuing to see content as an impulse item, that consumers can buy at the price point they want on just about any device. >> michael, 2013 china box office for movies was $3.6 billion. i think it was close to 27%,

year over year. what does that mean specifically to lionsgate, if anything? >> i wouldn't say just china, guy. i would say international. take a look at what happened with "catching fire." the first "hunger games" installment came out about $280 million of international box office. this one is up over 50%. and looks like it's going to end up doing about $430 million internationally. >> michael, when you look at the potpourri, let's call it, of venues that need content, why isn't it as simple as all content players should trade alike? aren't people just nipping at your heels for it? >> i think it's always good when you're a seller in -- where the buyers are actually increasing at a tremendous pace. so, we're, now -- we now have over 30 television shows on 22 networks. again, you've got -- every day, you seem to have another player that's emerging. whether it's electronic sell

through or streaming. you have big competition happening. and you only have so many quality producers providing that content to them. >> michael, you know, ces is going on in las vegas. they have so many tvs. ultrahigh-def tvs. is it too much of a stretch to say, as consumers adopt these new technologies, that content is in even more demand? and therefore, studios like yours will benefit? or is that too much of a stretch at this point? >> i think you have a rising tide. we're doing a little 4k experiment with amazon that we're excited about. we're excited about the new channel, the pick up of ethics, just got picked up by time warner cable. you'll be able to see ethics on time warner cable in new york and obviously, l.a. you're saying in one fell swoop, doing a good job. epic is a competitor to hbo and show time. that channel is available.

it goes to 46 million homes on the satellite and telephone and the cable operators. what's happening is, all of these increase distribution platforms for us on the content side. we've invested $8 billion in content over the last decade. now, we're in a position where we're able to effectively sell our product everywhere. >> michael, great to see you, as always. >> the only thing i want to say, melissa. is keep your eye out for divergent. >> march 21st, right? >> and the sequel, number one, two, and three. the hat trick for book sales. >> michael, great to see you. michael burns, vice chairman of lionsgate. >> you have to be true to the edict of the show. we talked about this a month or so ago, the stock hadn't been trading since the fall. it was running out of gas. bounced off the 28 level. but now, it's turning over again. i'd rather buy the stock now in 32 1/2, 33.

let it prove that momentum is still in place, as opposed to try to buy it now and guess. up next, it has been five years since wells fargo purchased wachovia. could it be that one of its key businesses is finally beginning to pay off? former chairman and ceo, dick kovacevich, that's e next. and rex tillerson. [ male announcer ] the wright brothers started in a garage. amazon started in a garage. hewlett packard, and disney both started in garages. mattel started in a garage. ♪ the ramones started in a garage. my point? you never know what kind of greatness can come out of an american garage. introducing the 2014 motor trend car of the year. the all new cadillac cts. ain't garages great? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier.

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♪ welcome back to "fast money." gearing up for next week. a number of the biggest banks will be reporting earnings. but will mounting legal costs cut into this year's profits. joining us is dick kovacevich, the former ceo of wells fargo. thanks for being here. >> great to be here. >> i want to talk about the settlement fees. are big banks being unfairly targeted by the government? >> yes. >> yes. why do you think that is? >> well, i think they're an easy target. i think a lot of people are misinformed on what really caused this crisis. if you think about it, the

crisis was caused by the subprime mortgage fiasco. and all of the originators of the exotic subprime mortgages were s&ls and countrywide. none were mainstream commercial banks. and all of the distributors were mainly investment banks. and yet, 7,000 commercial banks are being blamed for something they really didn't do. and size is not the issue. actually, a well-diversified national financial institution is at lower risk of failing than a small institution that may be in one state or a community. so, the facts don't support all the rhetoric. and that's very unfortunate. >> and we see investors, largely shirking news. all of the headlines, investors shirking. let's talk about wells fargo and investment banking. people are excited about the growth of investment banking and the growth they expect it to show in the next reported quarter. right now, it's about 5% of the business. but you say it's not going to

ever be more than 10% of earnings. so, is that going to be the driver? what gets you most jazzed about wells fargo's performance in the most recent quarter that closed? >> investment banking has been our fastest grow growing business in the last five years. that's because it's a low base. there's never been one horse that's driven the stagecoach. it takes many of them. we have 90 different businesses. in most of them, we're gaining market share and wallet share. although it is true that the fastest part of those has been investment bank. but again, from a very low base. >> mr. kovacevich, the rise in the banks across the board has been pretty significant. are the banks as healthy, in your opinion, as the rise in their stocks suggest that they are? >> yes. i think they're very healthy. you know, we -- the capital is strong. in fact, i think many banks are actually overcapitalized at the moment. costs have come down.

credit is terrific. i mean, it's -- we have the lowest delinquencies that we've had, perhaps in history. that's going to stay the same. but the challenge going forward is we have to grow -- the industry has to grow revenue. and you can't keep relying on credit reserve pushbacks and cost decreases. you have to increase your revenue. and also, hopefully, the fed will allow, because of all this capital, for further increases of further dividends and stock buybacks. if the industry can grow its revenue, which i think it will in 2014 and be able to give more money back to its stockholders, it should be still good for the stocks. >> dick, great to speak to you, as always. thanks for your time. >> thank you. >> dick kovacevich. josh brown, answer guy adami's question. and that is, do the stocks, that

we've seen, do they portray healthier banks? >> yeah. and i think there's a lot to go. banks are one of our biggest overweights going into 2014. clearly, if we're going to have the economic recovery, then almost every mainstream strategist sees on the horizon, banks are going to play a really big part of that. in the meantime, they have the lowest forward p.e. of all s&p 500 sectors at 12 times. we think the banks look really well-poised for almost any occurrence over the next year, except for an economic contraction, which is clearly not looking to be in the cards. so, we would be long with stocks. we like the large one especially. >> ahead of the earnings coming out. positive on bank of america, which hit a new high on today's session. >> we're long on that one, as well. >> in the short-term, i'd be cautious on the banks. >> why? >> i think they've run up quite a bit. not only that, you saw in the last couple days, the yield flatten quite a bit.

and when the yield curve flattens out, that's a short-term top of the banks. i don't know if i'd go so far as to say i'd short all of the banks. i wouldn't be buying something new here. >> big moves of the day. kick it off with a drop for buffalo wild wings. down 3%. >> i do love my chicken wings. but this is a name i would completely stay away from at this point in time. like i said, spicy food's nice. but not here. >> mckesson, up 3%. guy adami who called it as his final trade last night. >> it has room. the stock has been doing everything right. we mentioned it last night. i think there's room. >> drop for baidu, josh. >> i like going into the chinese stocks. they have huge secular tailwi tailwinds. their bull case is north of 300. i think it might be an opportunity.

>> a drop for micron, down 2%. grasso? >> when they took out -- they grossly underestimated, shareholders did, the ability to double market size globally. i would say $30 next stop. profit-taking has to be understood here. the stock is at an unbelievable run. take a little profits. but most of the guys that own it, i think it goes higher. >> and a pop for playing with your food. >> what? >> pizza hut is raking in the d'oh. the pizza chain said it sold more than $1 million worth of pies on its x-box-based app. this marks the 21st anniversary of the first online order, which pizza hut says was ordered through its website in 1994. >> you explain this. the kids sitting at home, just gaining weight by the day playing x-box. >> now, they can order a pizza. >> don't have to get up to dial

a phone. that doesn't trouble anybody but me? that's problematic. >> actually just made me hungry. >> see that? >> seems to me, you have a second derivative trade here, weight watchers. >> let's talk airlines. united, delta, southwest, alaska, all hitting highs today. but some traders aren't getting onboard. brian is at the cboe with the action. >> you saw the action there. what a stock pickers market it has been over the last year. no surprise, alaska airlines on this list of heavy call activity, trading four-times the active amount of average volume. that was on our top 2013 year pick, where you buy and hold for a year. alaska airlines. delta airlines. united airlines, seeing heavy call activity. these guys had nice pop today. not all was good news. they had a nice move. this shows why you have to be a stock picker out there. >> you were looking at united. >> absolutely. you had heavy call activity. but united taking profit here. we saw 5,700 sale of the march

43 calls for option traders saying, united airlines will start to run out of steam. break even on this trade. that's probably the top end for united. i probably look to take some profits here. look to other seconders. i like what josh talked about with the banks. >> thanks, brian. catch options action friday. check out the website. downgrade or clowngrade? we took josh brown's new term and made it into a game. our favorite pastime on "fast." he calls it like he sees it on today's biggest downgrades. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ]

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only at a sleep number store, where queen mattresses start at just $699.99. sleep number. comfort individualized. let's shake things up a little bit. let's play a game. we love playing games. downgrade or clowngrade. you may remember, josh brown coined the term. we're talking about morgan stanley's downgrade of twitter. >> you have some firms that have gone from neutral, to buy, to cut it to a sell. what are you talking about? let the company report one quarter. this is a clowngrade. i don't understand it. >> so, we decided to look at some of today's analyst

downgrades and let the traders decide if they agree with the logic behind the move, or whether it's a clowngrade and not based on solid ground. >> the music is fabulous. >> let's start with j.b., #clowngrade. we asked the question, downgrade or clowngrade? >> actually, this one looks pretty legit. i think they make a really fair point. they're saying this is a best in class company. they like young brands. they think it's the way to play emerging markets. but the point is well-taken that the lot of benefits of improvement in china are more than priced in. this is not a cheap stock. and investors may have gotten ahead of themselves. they're looking for 40% growth in china for this company's sales. and it's probably not going to materialize. i think this is actually a fair, let's take some off the table. the stock had a nice move, from the 60s to above 75. not a clowngrade.

>> it's a downgrade. >> it's a browngrade. >> now, you're pushing it. >> that wasn't that funny. clowngrade, not as good. sprint, over deutsche bank. sprint is down 5% today. grasso, downgrade or clowngrade? >> it's a -- >> have to wait. >> got to let the music play. >> jumped the gun. >> you know, it's a downgrade here. if you look at it on the chart, it got way ahead of itself. it traded up 40% on the back of the headline they were contemplating taking out t-mobile. i think it got way ahead of itself. it's leveled back in a bit here for investors. i'm long sprint and t-mobile. i think t-mobile is the real asset to be purchasing here. i'm longer that than i am sprint. so, it is a downgrade. >> let's go monsanto, which makes ag products at jpmorgan. b.k., downgrade or clowngrade? >> do i have to wait for the

music? >> keep going. >> i don't think this is a clowngrade. it's a decent downgrade, especially since monsanto had a good run off the lows. jpmorgan is likely to look like a clown tomorrow because we have the crop report coming out. if we get lower stocks in corn and wheat, we could see a pop. he had legitimate reasons to downgrade the stock. i applaud him for downgrading the stock. it might be a little dangerous. >> no irony in that? the crop report. going to let that go? >> i watched "trading places." exxon mobil, moved from neutral to a buy. citi upping its price target from 108 to 99. downgrade or clowngrade? guy? >> i'll go clowngrade. >> oh. >> you know why? you're going to downgrade it, don't raise your price target. this was a very thoughtful call. on the back of it, they raised the price target from conoco

phillips. and i like what this gentleman did. i just wish he lowered his price target, as well. >> so, exxon was a clowngrade. >> that's sort of mean. >> come on. where was that stock before? >> excellent point. >> let's look at energy here. crude oil, on an eight-month low. exxon mobil ceo rex tillerson making comments on cnbc about the u.s. and self-sufficiency. take a listen. >> our crude oil production surpassed levels not seen since the 1980s. and it's expected we'll continue to add to crude oil production capacity over the next two or three years. i think it is realistic that the u.s. could be energy self-sufficient, energy-security by the end of this decade. >> what do you think? >> here's the problem you have with that. that assumption assumes that the wells, the shale wells, and eagle ford, are going to produce the same amount of oil that they

have. and the -- i'm sorry. the d.o.e. just released a report on the drilling rates. and these are declining tremendously. basically, after a year or two, the well is no good anymore. so, you have to think the oil companies have drilled the best wells first. then, they're going to move on to the secondary stuff, which is going to decline even closer. the estimates for energy self-sufficiency are way off. way off. this is the bullish case for oil. although, i've been completely wrong on that so far. >> and it relies on the political appetite. a lot people feel we could become energy sufficient prior to 2020. they think we can do it sooner than that. but there hasn't been the political appetite to do that. there's a lot of environmental concerns. there's a big variable. there's large variables along the way of just the black and white question. >> and we need a lot of oil. we import half of the oil we need. >> the big thing in energy, is that ban being lifted, if it is

lifted. >> on exports. >> on exports of crude. that changes the dynamic. >> our viewers have tweets on everything from lumber to coffee. we're trading them. that's next. i was going to the library to do my homework.

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you tweet it. we trade it. let's get to our tweets. this is for b.k. appropriately, buy, sell or hold, lumber liquidators? >> here's a case, even though we like to bring the lumber, i would chop this one. >> oh, nice. >> yeah. it doesn't look good at all. this is basically, really on technicals. looks like there's more to this correction. i would take this recent run-up and get out. >> you think it ever splits? >> that's going against the grain. >> doing your own laughter. >> terrible. guy, let's -- >> yes? >> starbucks with the holiday quarter in view? >> igt put out a thoughtful note on starbucks. they came out bearish. look for weakness in the stock. they've been right. let them report. hopefully it's weak. hopefully you buy it sub-75. that's how i play it. >> j.b., will you recommend

playing facebook or twitter going into earnings? >> neither. since the start of the year, the analysts have been playing a high-stakes game of knockout. every morning we come in, another momentum darling is cut by somebody big. and i don't think these are the types of stocks you want to sit in, specifically for earnings. i have no edge on whether or not either report will be enough to justify the runs they've had. if anything, i think as an investor, you want to hope one of the reports leads to a drop in the stock. and then, find a way to buy it and get a better entry. i would not be going on either name. >> same question to you. the other day, you named twitter as your top momentum play for 2014. >> down five days since. >> thanks, josh. >> remind you, in case you didn't notice. >> exactly. i've been in twitter since the start. i took some profits. basically, my cost basis -- i'm still profitable here. i'm staying along the name. but i, like josh, i have no edge. i don't know what we're going to see going into earnings. having said that, i'm hoping for what he just said.

i'm hoping for that sell-off, so i can buy another like amount of what i already own, just to average lower. i think you have a growth story in twitter. >> we have a tweet just for grasso. sell or underperform on southwest? >> you know, it's a lot less leverage than a lot of other names in the space. i think they do have some pricing ability. if you like the airlines, this is a good place for you to be. i like jetblue, as well. >> we come right back. [ bagpipes play ]

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time for the final trade. grasso? >> the switchover to l.e.d. i like the stock where it sets up. >> josh brown? >> european banks, about to break out. >> i kind of want to go short eufm. >> i dare you. >> i would short korea here. ewy. not italy. that's the italian flag. >> that hurts my feelings. >> it was the italian flag. i'm not saying short the italian flag.

>> hexcel. there was an interesting downgrade. there was a downgrade in credit swiss. but they raised their price target. >> see you tomorrow at 5:00 "ma cramer starts right now. 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, i'm trying to save you a little money. my job, not just to entertain, but to make you a little money. call me at i-800-cnbc. what keeps you up at night, cramer? that's a great question to ask. nasdaq declined 0.23%.