can power ahead. >> thank you all this hour. "fast money" coming up in a few moments with melissa lee. what's on tap? >> you know, we all tweet about what is coming up on the show during the day. today i sent out a tweet, you would not believe the vitriol on twitter i got because we're going to have the an lips that downgraded gt advance. they make sapphire glass. downgraded the stock. a lot of people, got them fired up. >> i wondered if it would be apple because every time we talk apple, people say stop talking about apple already. >> well, got to address it. it's almost a triple in the past year. >> wow. all right. over to you. >> "fast money" starts right now. live from new york city's times square, i'm melissa lee. dan nathan, steve grasso, brian kelly, and guy adami. straight to our top story. low rates and market highs. how long can the two co-exist? you flagged this chart for us

today. it shows the final stages of a bull market begins when rates start to rise. guess twwhat? we're just about there. >> you would think. we're looking for a turn. everybody is calling for it. everybody who is saying you have to be in stocks because rates are going to rise and you're going to get killed, i would just be very careful. this chart here shows this goes back to '83 when they changed monetary policy, but every single one of those peaks, the blue line is yield, every single one of those peaks is six months to a year before a major, major market top. the '87 crash. the 2000 tech bubble. sometime in the next six months to a year if rates start to rise and we saw a bit of a reversal in tlt today, then you need to be concerned about the stock market. lest you think i'm a bear now, we have some time. >> six months to a year, that could still make for a nice trade on the s&p 500. >> a little reversal. tlt traded through 119, the

highest level we have seen since probably may of last year, and i still think there's a lot of room in rates to go lower. i'm still thinking the ten-year gets down to 2%. we're a lot closer than we've been. i think it clearly to me doesn't bode well for the stock market, but that doesn't mean it can't continue for a period of time. i'm in the camp that it's global deflation that's the enemy and you cannot combat that. >> i think that's a key point. if it goes too low, then that will be interpreted badly for stocks. as long as we're in this goldilocks period, can't this continue, grasso? >> it can. when you forecast it out and when you chart and do some technical work, if you put your lines out and look at the trend lines, we wind up at 2100 in the s&p and the s&p cash by year end. having said that, i don't know when to pull the rip cord because we all know it's coming. we all know that 10% sell-off is coming but when do you trim? i'm having a huge problem with it myself. so i think you got to really keep it tight to the vest at this point. >> at the same time you're concerned because not only is this going on, but your has always been there's been too much financial engineering

happening and that's been an artificial floor. >> let's just talk about the bonds for a sec. we've had a lot of volume pitatn bonds. the actual asset that the fed has been buying and their balance sheet has $3 trillion worth and a whole lost of different assets. but here is the thing, they're not selling. they may be winding down qe but they're not selling. it's created this kind of short squeeze in a way and we've had a lot of volatility in the bond market where we haven't had over the last two years in the stock market. that being said, let's talk about the financial engineering on the stock side. we know that the top 100 companies in the s&p have bought a trillion dollars worth of stock since the start of the financial crisis. you think about where are earnings growth? it's not fantastic and we don't have good sales growth. we have a lot of this not really investing back in companies. there's been a lot of cost cutting, not been a whole heck of a lot of r & d and cap ex and

they've been buying stock hand over fist. >> isn't it a result of lower rates? >> buybacks aren't going to look as attractive. if we don't have revenue growth, we may not have the earnings growth and then the market looks expensive. >> let's put it in context. let's not get our nickers in a twist. >> we're twisted over here. >> the ten-year is yielding -- what is higher rate? we're like 0.75%. >> everybody is concerned because the fed own so much how fast will rates rise? if you have a gradual rate rise because the economy is doing fine, then you have a year or two. even the fed funds got to 1.25%, by thetaylor rule, that's where we should be. we should not be at these low level of rates. we have some time and rates aren't going to 7% overnight. >> i'm sitting at home and listening to this -- >> no, you're sitting -- okay. sorry. >> you're right, i'm sitting

right here. what do you do with this information? how do you trade it? >> people say -- i was on the 4:00 show with kelly evans. great show. some guy gets on and says there is no alternative, got to be in stocks. that's balderdash. >> nice. >> thanks. people say you're playing yield. you're not playing it for 2.5% yield. you're playing it because the tlt, the instrument, is up about 17% this year. that's a huge move. and i think it's got a lot more room to go. how do you play it. yields go lower, tlt goes higher. >> you're a buyer of tlt. >> i will sound like a broken record but i go back to gold. if we have low rates for longer, you're going to have negative real rates. inflation is going to be higher. that's very good for gold. if rates rise in that environment, that's when gold and the dollar tend to correlate. they trade together, and you want to be in gold. under both scenarios you want to be in gold. >> i think the market can tolerate, to your point. on a relative basis, how high

rates will go. i think now we're on financial engineering. if rates start to creep a little higher, you will see them back off on the buybacks. the reason why debt is so high is because they borrowed because they wanted to reinvest in their own companies. so i think you have some time here. but i think you go to cash versus spin out and going to bonds. >> i would elaborate a little bit. i'm telling people that have been through two 50% peak to trough declines over the last 14 years, i think it makes sense if you're well allocated in equities and bonds, we've had bull markets in both, take a little off every month. stick with it because it's worth it. keep raising your stop but take a little off the table. if you ultimately get that 10% decline, this is the longest period we have not had a 10% decline since the mid '90s, then you have cash, free cash ready to put to work and that's how i would be playing it. >> as the markets digest this news out of rush sharks the fbi is reportedly looking into whether there's a russian connection to cyber attacks of

u.s. banks. let's bring in derek manke. great to have you with us. >> thanks so much. >> when do you think we'll know the extent of the damage. while the information is out there which could drain accounts potentially, if i'm a hacker and, you know, i have done a little work on the subject, not in hacking but reporting on it -- >> good to hear. >> this information is usually sold. it's not the hackers that drain the accounts themselves. >> absolutely. it's sold. it's outsourced. in terms of money laundering, too, you have a whole scheme for money mules that are usually hired. legitimate job account payable positions. it's a large network out there but you're absolutely right. in terms to see what damage is done, it can be quite some time until a full investigation is performed. >> so if you were advising jpmorgan or any other banks that have been hit, what would you tell them in terms of the time frame in which to be on high alert? >> time is money. i mean, that's one of the

biggest things we see whenever any sort of breach happens. the longer that window is open before the full, thorough forensic analysis is done, basically knowing your enemy and exactly what happened, the more damage is going to be done. i mean, i would advise, first of all, to do the damage control and make sure everything is properly stopped in terms of the attack and that no more -- there's no more leaking that's happening there. secondly, it's really important then as i said to know what happened, what sort of attacks happened, what information was stolen. doing that analysis is very important to understand what happened and then, of course, making proper announcements and taking a proper reaction plan from there, too. >> this was a coordinated attack on at least six u.s. banks. do you get a lot more phone calls on the heels of this? >> i mean, absolutely. we get a lot of phone kaultical every day. there's no downtime when it comes to cyber security. just to give you an idea, my group, we monitor threat activity throughout cyberspace on a global basis and we're see

being 650,000 attempts to hack into computer networks in one minute on average. and that's globally but you look at the u.s. and that number is not that much smaller. so there's a lot of attempts out there. the good news is a lot of these attempts are blocked, but, of course, when it comes to targets, some attacks will get through to their target -- to their victims, and at that point like i said when it comes to the game of security, it's not only beefing up your defenses so you can stop these attacks but also taking the proper analysis and reaction, refactoring, learning from them and so forth, too. >> all right. derek, thank you for joining us. derek mankey. 650,000 attempted attacks per minute on average. that's staggering. >> it's impossible -- my takeaway is you can't stop this, right? so if you have someone that wants to hack in, i think they're always getting in. especially when we're talking about another country.

we do it to them, they do it to us. it's a round robin game. i have a real hard time doing it but i don't like playing it with the smaller players. you could say you could play with intel but i like going with a general dynamics. a big company that can gobble up the small company companies when the time is right. >> we know everybody is spending more money. jpmorgan said it's going to increase spending $250 million by the end of this year. at the same time you take a look at a stock like -- not to pour salt in your wound, you take a look at a stock like fire eye and you would think that the conditions are ripe for this stock -- >> i am never going to get rid of that stock, am i? >> no. what do you do? >> good stocks, bad stocks. we talk about palo alto networks, panw. i think it might get to $100. we've been talking about sim man text. i think the last quarter was very good. the guidance was ish which is why the stock hasn't risen.

>> fort net, for some reason the earnings growth is flattish. the stock is up from 16 a year ago, must have been an earnings miss. if you ever start to see a reacceleration in earnings growth, this is probably a good do. this is the sort of the stock if you can get in on a broad market pull back given the back drop for demand for their services you probably want to buy it there. >> and if you take a look at the chart again from may on, it's been a straight shot up and that's mainly because it's being viewed as a take out target. that's there, too. an earnings lure with dom. >> we have a couple neck namtec. let's start off with what's happening with splunk. they reported second quarter earnings of a penny a share. the street was looking for a loss of 2 cents. better earnings number. also revenues coming in better than expected. $102 million. it also gave strong guidance so that stock is up about 8% in the

aft aftermarket trade. then avago technologies. the wireless chipmaker gave better than expected q4 revenue guidance. shares up 2.25%. a couple tech movers both of which are to the upside in the afterhours trade. back over to you guys. >> thanks for that. dan? >> splunk is interesting to me. they went ballistic, they were up over 100% in a short period of time. it's really been flat lined above 40 but below 50. this move right here you would say up 8.5%, you know, is a short squeeze or something. it's really only 6.5% short interest which is kind of surprising so to me if this is one that you actually believed their guidance, i think you can own it. i wouldn't chase it up 8%. but i would own it and keep a hard $40 stop on it. >> you know what a splunker is? >> a cave explorer. >> that's what they do. they explore all the different caves of the internet.

>> a fun fact. trade school. >> back to trade school. here we are again. who knew. >> i'm so happy you told us during a commercial break. >> we're live? >> iphone 6. we're digging deeper into the under the radar iphone plays coming up. plus, climbing tesla's wall of worry. why one analyst just cut his earnings estimates for tesla. that's next. tigers, both of you. tigers? don't be modest. i see how you've been investing. setting long term goals. diversifying. dip! you got our attention. we did? of course. you're type e* well, i have been researching retirement strategies. well that's what type e*s do. welcome home. taking control of your retirement? e*trade gives you the tools and resources to get it right. are you type e*?

big gains on twitter today kicking off the top trades. the company announcing it's making it easier to gauge how well your tweets resonate with your followers by giving all ursers access to its analytics platform. it provides details on your tweets, engagement, cliquecks, retweets and so much more. >> they're constantly changing their interface. they had a host of reasons why people were tweeting more last quarter. if you look at it, i'm a big proponent of mopub. you will start to see ad revenue continue to grow the way you have seen it but technically the setup is amazing in twitter. i'm still long the name. >> i am still long also.

if you think about the highs the stock made about 70 at the end of last year and the lows it made in may at 30, where are we right now? we're right about at the midpoint. if you look technically, there should be a bit of technical resistance. i think tough watch it closely. i'm sticking with it for the reasons grasso said. i like the momentum. that being said, the sideways action we had since the earnings, you know, it could have been some insider selling if you look at the news over the last couple days. this pop here is maybe a relief of that. there's a lot of shares that still have to come unlocked. it's one of those things you have to take some gains. 30 to 50, in a few months you probably clip it a little bit. a u.s. deal getting hid hard slotting just under 4%. u.s. steel actually up just under 25%. >> here is a stock that's gone from 25 to 40 in almost a straight line. this move is not that unexpected given the fact that cliffs, if you look at what cliffs did today, down 6%. i think the move in cliffs which has been a disastrous stock,

sucked down a lot of steel names. $35 exactly pretty much is where it has to trade down to and hold. if it debgets to $35 and holds, think the next bounce is well north of $40. >> cliffs held 15. we now hknow how bad the iron oe market is. >> tesla, pacific crest initiating coverage on the stock earlier with an outperform rating and a $316 price target. yesterday took down earnings estimate on the stock citing worries over the warranty change. joining us is the analyst, brad ericsson, of pacific crest. great to speak with you. >> thanks for having me here. >> in terms of the change, how big of a hit is it to earnings and do you think the street has taken that into consideration? >> you know, the announcement came out a week ago friday obviously, and we think the market has, you know, kind of

baked that in at this point. we felt it was important to acknowledge the gross margin head winds -- the modest gross margin headwind this presents going forward. on the other hand, we take the opportunity remind investors that despite its market cap, tesla is still a startup and occasionally startups have to do things like this in order to reassure their customers around products. there has been a lot of controversy around the drive train replacement, particularly, and we think if you were on the fence about buying a model s or not related to that issue, certainly this clears that up. >> i want to go deeper into your note because so many analysts out there are bullish on tesla. we sort of have to take the other side on this just to present the viewers a well-rounded look. >> understandable. >> in terms -- what caught my eye in your note is the discussion about software and how the value add over time is going to be in the software component. up front in these front years, tesla is investing heavily on the physical aspect of the car as opposed to i would imagine the software component. the value is shifting towards

software. the spend though right now is concentrated on hardware. when does that catch up with tesla? when do they have to start shifting as well? >> you know, i think it will -- you will see a more gradual shift than maybe at certain other automakers over time. really when you look at the hundreds of millions of lines of code up to that point now that are going into the cars, you know, just conceptually the value really is shifting to software as you say, and so tesla leveraging this ability to exploit effectively the convergence of data and connectivity and being able to do things like update that software over the air, we think that offers a really compelling cost argument over time, so, yeah. >> brad, looks like tesla to me was doing a great road show going to a lot of different countries. they were behind the eight ball so to speak on their alternative vehicles and they had to ratchet up in the next couple years. so is that something where you're going to see the next leg

of growth through -- in tesla? >> partially. they are obviously looking into getting into new geographies. they've recently gone into all the -- several of the important right-hand drive markets, and from an addressable market standpoint, just getting into china and hong kong and japan and australia and some places like that literally doubles their addressable market. so that's certainly a driver. and then obviously as we look out into 2015, you know, clearly model x and the product cycle around that is going to be key. >> last quick question, brad, and that is about china. on the 1st, which is monday, the incentive s are going to kick in in china. i'm wondering if that would be the catalyst that may catch us to the upside in terms of surprise for earnings for tesla? >> that could have an impact. you know, we're not putting too much stock in that yet but what we would say over the longer term is just around china. when you look at the pricing relative to some of the competitors and then just the

general pent up demand, china is the largest auto market in the world. we feel like tesla has really, really good opportunities to continue to grow its market share and gain share there over time. >> brad, thanks a lot for joining us. we appreciate it. brad ericsson of pacific crest. outperform initiated. guy? those are good -- >> we said 2 to 25 is your terrorispiv v pivot. that's been pretty accurate. we have to go back to shore hills mall and drive it again. >> if they permit it in new jersey. >> what? me and you to drive in a car together? >> this is a company that went public in 2010 at $17. every year since then in 2011, 2012, 2013, they have done a secondary offering. they brought shares to the market. elon musk bought on the last one in may 2013. so every year like clockwork. stock is at $260 now. is he a buyer if they bring a deal this year?

they have been very smart. this is a startup, and they have raised a lot of cash and it's on their balance sheet and that's great if you're a startup. they have $2.7 billion on the balance sheet. let's see what the price action is if they bring a secondary here, if there's that sort of demand. >> brad says it's not a matter of if they need cash, it's a matter of when. coming up, the race to find a cure for ebola as the death toll tops 1500. initial human testing for a vaccine beginning next week. later, could apple announce a new mobile payment service with its looming iphone 6 release? a look at what that might mean for ebay later on. sharpen your pencils. you're about to get schooled in the fine art of trading. with the "fast money" back to trade school. the "fast money" traders are taking your questions to help you make sense of the markets and maximize your profits. just send us a video with your trade school question. >> we would like to know what the heck is head and shoulders.

>> post it to the "fast money" twitter page and be sure to use #backtotradeschool. >> what a quantitative easing? >> it has to do with money. >> knowledge is good. >> trade school is in session. >> "fast money" back to trade school class is in session all this week only on cnbc. it's beautiful. it's more than that... ...it's perfect. introducing curved ultra high definition television from samsung. frothere's no reasonn average 17 we can't manufacture in shuthe united states. here at timbuk2, we make more than 70,000 custom bags a year, right here in san francisco. we knew we needed to grow internationally, we also knew that it was much more complicated to deal with. i can't imagine having executed what we've executed

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big news on the ebola virus. glaxosmithkline getting the green light to test its ebola vaccine on humans next week. this after the world health organization said the outbreak could reach 20,000. we're joined with the very latest. meg? >> this is a record outbreak for ebola. the w.h.o. saying there's been more than 3,000 cases in these four countries innie ieswest af. the nih starting to test this vaccine with glaxosmithkline. saying that he got a 2.8 million pound grant from the welcome trust and other organizations in the uk which will enable it to build up 10,000 additional doses which it says it will give to the w.h.o. if the trials are positive in case they want to build up this emergency

vaccination program. interestingly, there's another name in the vaccination space which is new link genetics. the nih said it will start a trial of that compound in the fall. interesting that stock was down about 5.5% today. some folks are speculating it's because glaxo's trial is up first. i talked to michael at rbc, he think it's probably not going to be taken out but it has other things that folks like. >> 20,000 doesn't seem like a large number in terms of treatment. how big could the market be? >> we would only want to vaccinate the high risk folks. 10,000 seemed to me like kind of a lot. they're talking about doing it after they just potentially complete a phase one safety study. so what they're saying is they

don't even know if that would be given out by the w.h.o. at that point. what they would need to do is determine whether it looks like it's going to work well enough. these are healthy people you give a vaccine to. it's not like a drug when you're at the end of your rope. so that's the problem with that. really it's not about like a commercial market here necessarily. that's the reason why we're not seeing a lot of companies in the space because these kinds of tropical diseases are really not big markets. >> at the same time, of course, guy, we have seen these stocks move. >> unbelievable. last time we talked about techimir it traded from $30 to $10. we said this is where it broke out from. now it trades $21 and change today. i don't think to buy it. glaxosmithkline, that's interesting. it's gotten obliterated off the last quarter. that respiratory business is not doing well but it's gotten towards levels now where you may want to think about owning gsk. >> what does it mean if they fast track this vaccine? do you sense that you will see commercial drugs move a little

quicker? do you see that maybe top ten pharmaceutical names will start to say, hey, if we could fast track that, is there a reason to fast track other vaccines? >> i'm not sure this vaccine necessarily parlays into other vaccines. they're fast tracking it because there's this outbreak situation. >> i get it. >> the government drives develop of these kinds of compounds. the only reason a lot of these companies are in it is because they've gotten government krts and they can be $100 million. for a small company that be really great. the reason they're in this space is they made an acquisition last year which works in other vaccines. it's kind of interesting to see the big companies being in ebola. it's because they wanted to be in these vaccine sorts of technologies. >> thanks for stopping by. >> thank you. >> coming up next, undercover apple play. gt advance technology is getting hit hard on a downgrade today. just two weeks shy of the iphone 6 release. the analysts behind that bold call is up after this. you make a great team.

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site. we've been playing all show long our songs from high school. it's throwback thursday. so whose song was this? >> it's mine. >> early '70s. >> that's one of the top five songs of all time. i'm just telling you now. it might be number three. >> coming up on the show, it is official and we're invited. apple sending out invitations for an event on september 9th largely expected to be the launch of the latest iphone. and could qua wakguacamole burg and cheese stikcks be enough to buy mcdonald's? and the canadian dollar looking strong before burger king's deal with tim horton. time for pops and drops. big movers of the day. we have is drop for abercrombie & fitch. >> big drop. their logo business is the big problem. i want to take this opportunity to say i'm no longer going to be a model for them for their catalog. >> in case you were wondering. >> pop for t-mobile.

up 1%. >> the headline said opening talks on t-mobile, sale at $35. they've been the real des truck for in the case. i think you're going to see a bid. i'm long the name. >> and a drop for jcpenney. >> downgraded at btig. interesting downgrade. i think they're going to be wrong. i think this stock has a lot of room to the upside. i like jcp. >> go pro. >> they have 35% short interest. it's a new issue. there's obviously a lot of interest in the products. the thing is to me it just seems like a one-way trade. it's got a 6 billion market crap. i would not chase it. obviously this story could have legs. this is the sort of thing you want to put in the speculative pocket. >> we have a pop for a fish out of water. >> what? >> researchers at mcgill university in toronto have discovered certain fish can live outside water by learning how to

walk. experiments conducted an an african fish that possesses lungs and can breathe air shows within a year they were able to adapt to land. there are baby fish steps involved. placing their fins closer to their bodies and keeping their heads held high. >> we have known that. >> that's evolution, right? >> didn't darwin write a book about that. >> it's funny you mention darwin. we should let darwinism take hold instead of trying to fabricate things. >> moving on. let's talk about apple here. the company sending out invitations today for an event on september 9th at the flint center in cupertino, california. new video showing a huge structure being built for this event. raymond james downgraded gt advance technologies, the company expected to be behind apple's sapphire glass. the analyst saying it is time to take profits. shares falling 5%. joining us is a man behind the call from raymond james.

pavel, great to have you with us. >> thank you. >> this is a stock up 180% in the past year. you say it's fairly valued or well valued at this point. given the catalyst of the iphone 6, could we though perhaps not be factoring in the possibility as reports are suggesting now of an iwatch? >> i think it's fully priced in and then some. the stock is up, as you said, about 110% year-to-date. all of that is in anticipation of sapphire sales materializing through apple. gt has indicated that this year it's going to sell about half a billion dollars worth of sal sapphire to apple. virtually none of that came in the first half of the year. it's back end loaded. next year they get a full year of that. i see no way they can make those numbers without a significant penetration of sapphire into the phone and the wearables may well be a component of that as well,

but because the form factor is so much larger on the phone, that really has to be part of the picture. >> okay. so you're saying actually then because in the note you say the iphone 6 is quote, unquote, amply priced in. you're saying both the iphone 6 and the potential wearable, they are both priced in. >> i think -- i think both of those are fully telegraphed, yes. in other words, if one of those were not to materialize vis-a-vis the sapphire for gt that would be disappointment. the other question, by the way, is how well will the sapphire model sell? in other words, there is a higher price point to any consumer electronics that use sapphire instead of glass. so from the standpoint of apple, it's not a big deal either way, but for gt it's very relevant. if it's an extra $50, maybe even $100 for a phone with sapphire, the question is will consumers gravitate to that model?

still an unanswered question. >> what is the stock worth at this point? because i didn't see a price target on your note and you give a lot of assumption sapphire sales to apple being up 15%. bottom line, tell investors what the stock is worth? >> it's right now it's trading at 32 times next year's earnings which i think is very, very frothy. you know, it's a story stock. i'm not suggesting that it has 50% downside, but, look, this thing is up about 30% just, you know, in the past 90 days roughly. so, you know, can certainly see it retracing a lot of those gains. partly depending on the headlines on september the 9th and also execution -- >> you're not giving me a number, pavel. >> don't have a specific number for you, but i see some room for buy to the downside.

>> pavel, thank you for your time, appreciate it. >> i'll give you a number, 15. that's where i get interested in this name again. and that's based on technicals. you will see a bit of a drop-off here and i think if you get it 15, you get a washout day. >> i will say that when i tweeted we were going to have pavel on the show, the response on twitter was vitriolic. this reminds me -- >> when he says it's factored in -- >> this reminds me of when apple was at $700. >> people don't want you to talk negatively at tesla. >> it's keconnected with apple. he said wearables and the iphone 6 is factored in. i want to know does he know if sapphire glass can be used in ipads? that can really move the needle dramatically. >> you would be interested. >> i do. it's apple on steroids. it moved 40% while apple moved 8% or 9%.

if you want the beta, this is the way you play it. if you think iphone 6 sales will be through the roof. >> apple's announcement sparking a series of large bearish bets against a fellow tech giants, eb ebay. >> ebay, you don't normally associate with apple computer. but "wired" this morning on the blog was commenting that the new iphone 6 to be launched or at least introduced on september 9th is going to have some form of patented payment processing system which the logical kind of takeaway would be is this a threat to pay pal? we also know that ebay recently has carl icahn on their heels. he had been pushing for a pay pal spinout and the company acknowledged they were going to do so. but today when the stock was 5533 there was a large trade in short dated puts. september 12th weekly puts. there was a buyer of 12,000. the options volume went really hot today about 2.5 times

average daily volume. when i think about that trade in the context of the high volume and the news, it looks like short term protection for an ebay long. this is the implied volatility, the price of options in ebay. you can see it's popped here off of 52-week lows. a lot of that has to do with some of the pay pal excitement as far as the spinout but then also all of that buying. i'm going to look at one more chart here. here is this chart of ebay over the last year. it's been a massive underperformer here. it's got that recent bounce on the i caan necahn news. >> thanks for that trade, dan. catch more "options action" tomorrow. check out optionsaction.cnbc.com. millennials are apparently ditching mcdonald's and the company might be shaking up its menu to bring them back. will it work though? we'll have all the details after

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shares of mcdonald's down more than 7% over the past two months and the bad news just keeps on coming for the stock. today russia temporarily closing three more mcdonald's locations and they haven't had a new blockbuster product in some time. nicole miller reagan follows mcdonald's for piper jaffray. great to have you with us. >> good afternoon. >> why do you hold out hope for mcdonald's? if you take a look since don thompson took over in june of 2012 p t 2012, the stock has been an underperforming not only against it's peers but the broader market as well. >> we take the balance sheet, the dividend yield. i think there's an opportunity for them to focus on speed of service, focus on accuracy, things that will ultimately translate to increased frequency. >> there's been a big to-do on millennials turning their backs

on mcdonald's. i take a look at those potential products, guacamole burger, mozzarella sticks, is that really going to drive the younger folks in mcdonald's? >> no, on that point i think that's only part of the puzzle. frankly, they need to get up to speed on technology to truly get the millennials interested in the brand and to get that attach rate. >> have they learned anything from the paneras, from the chipotles. >> dominos. >> are they trying to take -- or are they just going to stay ray kr kroc's mcdonald's? >> it's exactly what they're doing. they're the biggest and the best. when it comes to things like price, they're the leader. they go out and cover commodities, labor, whatever it may be. the technology is interesting because they're not taking a leading standpoint. so they do have the opportunity to look at some of their best in breed peers have done from a technology perspective and capitalize that and perfect it for their brand. >> nicole, we're going to leave it there. thank you for your time. appreciate it. nicole miller reagan of piper

jaffray. i brought up the point about don thompson. the stock is up 5.8%. the s&p in the same time period is up 42%. wendy's chipotle, outperforming mcdonald's by a lot. >> they ran into a lot of headwinds. they ran into a valuation problem. but the stock traded down from $104 to $92. it held exactly where it held back in june. i think it's interesting against 92.5, 93. it's not ridiculous valuation. to me all bad news now is really priced into the name. i like mcdonald's right here. >> you liked dominos. they have been at the forefront in terms of using technology to really cut both their labor costs but also the turnaround time for orders and accuracy. do you think that could be a catalyst for mcdonald's? >> my kids actually love dominos and for a sill sicilian male, i difficult. >> it's a tough slice to swallow. >> that was cheesy. >> but the app is amazing.

you remember what he did institute, he instituted the gluten-free pizza. at this day and age you have to have a company that gets away from bread. >> you're saying mcdonald's is not -- >> technologically, the menu, the product lines. you have to start offering platters of the stuff. people don't want the bread. >> you say thank you, no thank you to the stock. >> i do like the stock. i think they will turn it around. technically it sets up poorly still, but i think it's due for the bounce. >> as the fast food wars heat up, burger king is packing up its bags and heading to canada. we'll tell you where the deal has traders running right after this.

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time for the chart of the day. the canadian dollar looking strong following burger king's deal with tim horton. people have to understand in terms of money flows when you have cross border deals. >> basically what currency traders are looking at is when this deal goes through, u.s. dollars are going to come -- you're going to need canadian dollars to buy your tim hortons. that's what traders are looking at. they're looking at the cross border money flow. what's interesting, you've seen since that deal was announced, you saw the canadian dollar get stronger. it's a big deal but it's not that big of a deal when it comes to the currency markets.

so the rur den si market, the canadian dollar, you can use it this weekend at your labor day parties, the loony, you will sound smart. it has gotten much stronger than you would think with this type of deal. how do you deal this information if you're a stock trader? fxc is the etf. if you start to see that moving higher, that might indicate that there's another deal out there. that there's more tax inversions out there because that's what the currency is pricing in right now, that we're going to see a wave of these tax inversion deals. week look at fxc. if it gets up through 92, that's a sign that something else is out there, something else is on the horizon. i think we probably have a couple names out there one i'm long that risk reversal also known dan nathan mentioned to me is blackberry. that's another possibility of a tax inversion deal. >> all right. we're continuing our back to trade school series today where traders answer your questions live on air. first video comes from steven.

>> hi. this is steve from north canton, ohio. i'd like to ask the "fast money" traders how the 50-day and 200-day moving averages of a stock are determined and how the traders use those two numbers to figure out whether to hold, sell, or buy a stock. thanks. >> okay. so the question is how do traders use moving averages to trade stocks. we always are talking about 50-days, 100-days, 200-days. >> it's the average price over that time period. so the 50 and the 200, the 50 is on a shorter term basis, two months. 200 is almost a year. really what they are, they're momentum indicators. when you're thinking about it relative to the price of the risk asset on the chart. >> you are really getting a sense for the momentum in the stock. is the stock or are the momentum indicators moving up, is the stock moving up with it, showing good relative strength? that's the key.

why do you pay attention to them? how do you trade off them? it's a bit of a herd mentality. everybody is looking at them. that's where they're setting their stops. i would say in the options market this is a lot of things how people choose their strikes. they're looking for support and resistan resistance. this is a company that reported last night and the implied move in the options market was about 6%. you know where that was? it was right where the 200 and the 50 day moving average converged and that's where the stock went and it stopped today. it suerved as that support and served as an indicator of how people were pricing the move for the earnings. >> that's a good question. our next question is from twitter. why is the head and shoulders pattern bearish? >> we have a great chart dan nathan provided of whole foods market. you have a stock that moves higher, subsequent sell-off. the neck rally is high eer than the previous high. the third high you can't make a

new high. not good, a bearish pattern. you subsequently see what happens. why does it work? because of the reasons i outlined. you're failing to make a new high on the third time. looking for set youps nups youf haven't seen one but if we do we'll get it for you. for you, haven't seen one but if we do we'll get it for you. it's estimated that 30% of the traffic in a city

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the collaboration with citi was important for providing us the necessary financing; allow this small start up to go provide a service to municipalities. citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally citi is there every step of the way. so the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge. chocolate, soybeans, thisand apricots. made with what kind of chef comes up with this? a chef working with ibm watson, on the cloud. ingredients are just data. watson turns big data into new ideas. and not just for food. watson is working with doctors and bankers to help transform their industries. today there's a new way to work. and it's made with ibm.

it's a brutal full contact sport. >> from the time. whistle blows to the last play, i promise to keep fighting for you. >> jim cramer leveling the playing field next. welcome back to "fast money." we've got some breaking news on the russia/ukraine situation. president barack obama spoke with german chancellor angela merkel by phone. the two of them said they are concerned about reports of reports of additional russian forces in ukraine. both agree it will be necessary for the u.s. and the european union to consider additional sanctions on russia. they also reiterated their determination to continue work on a diplomatic solution to the crisis, so, again, just the next step, germany's angela merkel, president barack obama at least talking by phone and saying they are looking at additional sanctions and they're still working towards a diplomatic solution. back over to you. >> thank you, dom chu.

it seems like a weak effort at job owning. >> must consider, we're really serious about it this time, we're wagging our finger more vigorously. but in terms of the market impact, watch the grain markets. i bought wheat today, jjg is the trade. >> thanks for watching. see you tomorrow at >> 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 just trying to make you a little money. my job is not just to entertain you, but educate you so call me at 1-800-743-cnbc. this could be an incredibly confusing time to be an investors and we have facts and figures from the