"fast money" starts right now. live from new york square, i'm melissa lee. a lot of red on the screen. stocks selling off, concerns of global growth. a volatile day if biotech stocks we potential ebola treatments. we'll break down the difference between each stock with the ebola drug play book coming up. we start off with the red makings in the market. jeremy's production numbers coming in worse than expected. and warnings hitting the

markets. so could the selloff get worse? what was it like on the floor today? >> i think we talked about it before on technical level, i felt like at a certain point, the bottom just dropped out of the market. we were eyeballing that recent low of 1928 in the s&p cash. we're below the 50. you tap that hundred. this is the first time in a while that we've retraced so quickly these moving averages. so i think we're headed toward the 200. >> what is stunning is the move in the market that we've seen. i don't want to keep harping on this ali baba top, but that marked the high for the market that we've seen. the record high in the markets. and since then we're down by more than 4%. >> these make nice story, but the more important thing is what you just said, volatility is back to a level of normalcy to where it should be at this stage of a market, at this stage of valuations with the fed in play. doesn't surprise me and it's great to see on some level. what we've been say, you can trade around the edges.

and one thing i mentioned friday, i threw my iwms back out there. they have proven to be something you can trade. the move in germany to me, i think it sets up to be the long side of a relative value trade which probably has either the iwm or even the ibb. we'll talk about biotech later. as the short side. i think volatility over here is picking up pace where i think europe despite the weakness everybody knows about some of the things that are priced this there. >> and i do believe this is a selloff you will see before the midterm election. i do believe we will bounce going into year end. i think october and we said it before on this desk, i think october will be wishy-washy for the market and i think we'll test the lower level that we haven't seen in two years. >> got to give kudos to tim. he's been right. and on friday, he said you fade the rally.

the close below 108 sets us up for moving the iwm down to 103. and i think thousae 1904 level n the cross hairs absolutely. interest rates continue to get whacked. and i'm still of the belief that that is trying to tell you something. and regardless of why transports are going down, obviously something you have to be concerned about, as well. >> today i was looking sort of putting together a buy list of things we'd like to boois. only thing i did buy was a little bit of macy's. i talk it all the time. they're the only u.s. business. but on my list is some of the industrials which have gotten absolutely crushed. so i didn't buy any today. but on the list would be something like an eaton. i think we have a chart. if you look at what happened to eaton. that chart wasn't quite as dramatic. it was like 78 and now it's 61. the one day chart. i wasn't looking to day trade.

names like eaton are quality names that may have stumbled, but i'll never pick the bottom. these moves have so big that they're actually setting up for some activists to come in. valuations i think are pretty reasonable. if i had come hoe fuss, i'd be shorting puts. i don't do that kind of trade, but --hoe fuss, i'd be shorting puts. i don't do that kind of trade, but -- >> especially because you're wearing a skirt. >> let's talk about volatility. the vix up 11% today. we're at 17 and change. nearing the levels pete has said it gets at those levels and that's where you get concern. so are you positioning yourself? scary things typically happen in the month of october for investors. >> september was the month that we were all expecting and that's the worst month of the year for market volatility. and it kind of happened depending on what asset class you were in. if you were in oil, september happened. and now it's carried over into developed markets.

i think you need to continue to own volatility and continue to think that it can get worse at least especially the easy part about where we are right now, being short gives you a lot of protection depending on how much premium you want to spend. so if you're trying to protect your portfolio, you actually get pretty good correlation and pretty good -- if the index sell 1%, it's when we're in the fifth, ninth innings of moving downward. a long way of saying i think you can still get protection. as we broke 1940 today in the s&p, that tells me almost for sure we will test 1905. and that's not a bad thing by the way. but to think that we're done with volatility is to be unprepared. >> if you believe that there will be a bounce to the end of the year, are you buying here? >> well, i'm pretty long right now. so i'm stay long. but i do have that variable. and to karen's point, i do want

to add more google. i'd like to add more apple. and when i look at it, i see how badly beaten up energy has been. and i think that's where people will do that beta chase for leverage going into the last two months of the year. yoyear. you'll see them chase a lot of energy names.correctly saying a lot has been supply driven. but i'm wondering if it's now a demand side thing and if deflation is something i've been scared about is in the cross hairs because you have global interest rates continuing to go lower. commodity prices getting whacked. to me it stops being about supply and starts being about demand. >> and the wti i think is supply and demand over there being so weak. it's now, what, two bucks which i don't think we've seen it here in -- >> which is amazing. >> the move in the spread at one point was $7.

>> there was a point when brent wti was over two bucks. i don't know what it means in term of the macroeconomics story, but it clearly caught a lot of people off guard. >> let's take a look at shares of gopro. this after a downgrade. stock hitting a record high today before pulling back later on in the session. let's bring it in charlie henderson. he has a neutral rating. a big market day like today and minus the moves we saw in gopro, gopro was almost leak a saike a haven in the markets. we look at it as a momentum stock. barometer for the markets and trading. where go ydo you see gopro head? >> i'm not the expert to be honest given the fact i downgraded it $40ing a go. it's taken on a mind of its own.

. it's a pure momentum stock. fundamentals are good, but pretty fast move in general off of a move in the fundamentals that probably hapts been as aggressively positive. >> in your view, what should the valuation be and how far away are we from that reality or what you perceive to be reality? >> you know, i would say consumer electronics company generally will trade at call it three times sale, two times sales. we're up around ten right now. people will talk about the media opportunity. i think that is real. it's not real in the numbers today. so that does make difficult for a lot of people. should it be a media multiple. i can just tell you today's business and next year's business will be consumer electronics. >> i want to switch gears a bit and talk about 30& of its revenues solely from gopro.

in yesterday's session, investors got a little spooked because we had the bankruptcy of gt advanced. i'm not saying it's a similar story, but it sets up similarly in that gt was levered to apple. how safe is one in this trade if gopro is so far away from reality in terms of valuation is this. >> i'd separate the two. ambarella is tied to gopro volumes. it's very much real. they're in the gopro cameras since really the inception versus gt building sapphire for a new device. so i'd say it's a totally different story. and the other thing, people per steve perceive it as a gopro stock, but they have a much more diverse business.

>> all right. thanks for your time. appreciate it. >> and i mentioned a safe haven sort of in jest. these are the place people are really reaching for something. they're hoping for the big return and they're hoping that this will deliver. >> and although it closed effectively unchanged, pretty big reversal. 98 and change, reverse closed unchanged slightly lower on two times normal volume. which indicates a shift in momentum potentially. so we have like this name, i never thought it would go above 90 bucks. with that said, i think if you've been in it, pull the rip cord. i think you've enjoyed a huge move. nothing wrong with taking money off the table here. you heard him, he downgraded it $40 ago. so i think you're in nose bleed territory. >> and that's where i was. i was very much disbeliever. and i think what is important to note is that the media opportunity is a couple years away. that is good and bad. so in the short term, actually

people may not have any data points to determine that the growth is running out of steam. that's one of the reasons it's supporting the stock. but if you think the market is going done another 100 s&p point, i'd get out of this. momentum is -- you're seeing rotation to higher value and lower risk stocks. that's the theme of the last three week. and it's not going to include gopro. >> soda stream sinking in today's trade. should it be left for dead. that's next. and it has been a volatile ride for bom drebola drug makers. our playbook coming up next. go ahead and put your bag right here.

have a nice flight! traveling can feel like one big mystery. you're never quite sure what is coming your way. but when you've got an entire company who knows that the most on-time flights are nothing if we can't get your things there too. it's no wonder more people choose delta than any other airline. it's in this spirit that ingu u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized.

ing u.s. is now voya. changing the way you think of retirement.

yum missing on the top and bottom line as china sales weigh on the company. joining us now rachel roth man, analyst at susquehanna. great to have you with us. everybody is so focused on china. and you called it right the street wasn't expecting a more negative picture. in terms of what we should be seeing out of china at the this point, do you think there is a turn in store? >> ultimately that would be the

hope. they have recovered from these in the past. but three years in to the turn around, to have another downdraft in same stores sales is certainly concerning. and david novak is retiring at the end of this year as a very successful ceo. so it will be interesting to see how investors position themselves heading into the analyst day in december and changeover in management come january 1. >> a lot of interesting things going on. activist investors coming into companies and also moves to split companies. today it was floated that perhaps yum should split off its china business from its u.s. business in order for the u.s. business to trade on a multiple that is insulated from china. could yum be a candidate for an activist to step into either help turn things around the way the company is right now or to enact change in the company? >> i think in order to have the

china division split off and that has been rumored for a number of years, what you you really need is a great china division. so you need to make sure that the ceo of china is planning on staying around despite the fact that we've had three years of underperformance and we would definitely they'd positive same store sales and margin expansion to get a multiple warranted and for investors to not be left with a stub u.s. to not trade off. so that is certainly a possibility later on. but i think you do need to see an improvement in gchina. >> wonder if you think can they return -- can olive garden be turned around? >> absolutely. our position has been that we support darden's management and the board that they put forth, which is four new board members

of their choosing and four exist. we have seen very few opportunities in the restaurant space where an activist board has been able to turn around a brand. so we believe the current olive garden management team and dar doz darden's management in general has the most access to turn the brand around although you're bringing up apslept point which is it's very difficult to turn around brands of that size that have lost their way. >> rachel, thank you so much to your time. >> thank you. and we should note that the conference call for yum will happen tomorrow which is why we're not talking about what is happening on this conference call. >> mcdonald's has been interesting. we thought it held 93. bounced up to 96. thousa here we are back below 93. clearly facing competition from chipotle and jack in the box. but i thought the stock had sold off enough. now that the tape will turnover, you have to be careful. i think it's imperative that it

holds right here right now. >> with yum, back to what rachel said, do not yubd estimaunderes novak effect temperature he's one of the best in the business. i don't think it gets a lot better. i actually think these guys may be missing even a health move going on in china. so fund your yum position. i think 92, 93 is where the stock could bottom if it breaks from here of course starbucks i think much more in terms of growth catalyst. >> a name that has flown below the radar is domino's pizza. up 10% year to date. a maim that you could hide in if you're worried about china is domino's pizza. still central focus is the united states. >> soda stream tanking today, said to be looking for a buyer. shares fell more than 20%. >> yeah, today was a horrible day to announce a double digit revenue miss. never a good day to announce

that, but this selloff i think was some what overdone. the thing that has kept me from doing anything here, because they do have an international business, i don't think when the ceo says we have to change course. i don't really love when there is a strategic change. and they will be focusing more on health and wellness. so that is disconcerting. i'd rather buy it up higher when it's working than here with the hope that somebody comes in. and if you were a company looking at this, wouldn't you want to see the business stabilize. >> it's soda stream and soda sales in north america have been on decline. and yet there is so much faith built in to this one company. interesting flip side, gmcr, th which was up 5%. >> all time high today. first time the gmcr headlines came out, you had the bounce. and then not nearly so much.

clearly i was wrong. dan thatnathans had it dead rig. when and you have price action like this on a lousy tape, it tells you here is a stock probably impervious to the broader market and will continue higher. >> rio tinto fallen after glencore said it is no longer interested in acquiring it. earlier rio said it rejected fwl glencore's advances. >> the driver for the entire space is interesting. there are strong balance sheets, players who could be dominant and who could be acquiring places. freeport is one of them. abx. these are guys -- certainly rio tinto themselves could be on the acquisition trail. i don't think this deal will happen. but make no mistake, this would have been something that rocked the commodity space and some that would have spurred other deals. so keep an eye on this. i think there will be more deals in the space and hope they're not buying companies that

they're getting too cheap now. coming up, the three best oil and gas plays that could see huge profits from long standing shale boom. and later, big moves in the biotech sector. we have your ebola drug playbook. charlie, the demand on this network, it is increasing by the second. it's crazy, huh? and people are relying on it more than ever. we cover more than 99% of all americans. i know, i can't imagine living without it. it's a place where people can come share knowledge and ideas.

it's beautiful. that's deep charlie. my selfie just hit a hundred likes...(gasps) a hundred! at&t is building you a better network. tdd# 1-800-345-2550 even on the go. tdd# 1-800-345-2550 open a schwab account, and you could earn tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 so if you get a trade idea, schwab can help you take it on. tdd# 1-800-345-2550 we're getting a lot of questions tdd# 1-800-345-2550 about organic food stocks. tdd# 1-800-345-2550 [ male announcer ] sharpen your instincts tdd# 1-800-345-2550 with in-depth analysis by schwab experts. tdd# 1-800-345-2550 and if you want to run your idea tdd# 1-800-345-2550 by a schwab trading specialist, tdd# 1-800-345-2550 our expertise is just a tap away. tdd# 1-800-345-2550 what's on your mind, lisa? tdd# 1-800-345-2550 i'd like to talk about a trade idea. tdd# 1-800-345-2550 let's hear it. tdd# 1-800-345-2550 [ male announcer ] see how schwab can help tdd# 1-800-345-2550 light a way forward. tdd# 1-800-345-2550 so you can make your move, wherever you are, tdd# 1-800-345-2550 and start working on your next big idea. tdd# 1-800-345-2550 ♪ tdd# 1-800-345-2550 open a schwab account and you could earn

tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 call 1-877-670-3357. tdd# 1-800-345-2550 or visit schwab.com/trading. tdd# 1-800-345-2550 schwab trading services. tdd# 1-800-345-2550 your go-to for trading know-how. tdd# 1-800-345-2550 ♪ tdd# 1-800-345-2550 your go-to for trading know-how. no question about that. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours.

if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. boy owe tech companies are working to find treatments and vaccines and are seeing extreme volatility. what are the differences between each stock in and meg, these stocks across the board have seen huge run ups in term of the stock price.

yet none are poised to produce hundreds of doses. >> and its eye also important to note none of these companies is really purely an ebola play. of course now they're just trading on ebola because of all the news coming out. and they all work to stop the virus from replicating. just in different ways. tekmira was given to dr. sacra. it works by rna interference to silence some of the problematic proteins. but they also have a lot of programs in other areas that analysts are more focused on. they say there are bigger opportunities in cancer and hepatitis b. we talked about arrowhead with you before. they say is this sort of farther along after arrowhead. their drug is tkm ebola.

and chimerix mass behas been ge lot of attention because its he being used in the patient in dallas and also in the ashoka mukpo, the patient in nebraska. he's a little earlier on in the disease. some folks thought he might get tekmira's drug. so weakness in that stock today. c chimerix is a small pill, a nuke leo tied anna log. it's in late stage development in other viruses including shawl pox. % small box. that drug is brincidofovir. and we can also talk about sarepta. that drug hapts been called upon to be used saying they could be ready, they could ramp up production about about asked, however they haven't been yet. but of course that story is all

about muscular dystrophy, a rare muscle wasting disease in young boys. that's really the story, however they do have this program in ebola. and finally biocyrst is the least further along. animal treatment and protection data are needed before it can be considered. however the way it works it's small molecule again. again trying to stop the virus' ability to replicate. but the main story in biocyrst is its drug for a hereditary rare disease. so it's important to note that all of these companies are working on other things, but ebola has been driving their stock the last couple months. >> and you make that clear, but at the same time, if you wanted to sort of trade the ebola trade, which company has the drug farthest along knowing full well that in order to actually monetize ebola treatments, it

needs to get a stockpile contract? >> yeah, there are two i think that people are focused on. and they tend to be kind of going in opposite directions. those are tekmira and couldhime. and of course with the news on the two patients krnts currently being treated, people saying doctors may be more comfortable because of the save it data even though it tekmira may be more efficacious. tekmir tekmira's drug was placed on hold after initial concerns. however, that does clear folks say. so those are the two that people are talking about. whether there could be a stockpile ordered of those, there would need to be more testing. but chimerix is further along in terms of other viruses. >> meg, thank you so much for that. high flyers recently. >> you're looking at it much differently. you're looking at it correctly by the way. who will wind up having either

the cure, the treatment or something that will be extraordinarily marketable. i look at it as what headlines whether drive the stock. we talked about this last week. we said although tekmira probably is not going to help, the headline is such that it will take the stock to 30. we got that last week. and then we said pull the rip cord and yesterday we said probably another day. so you got your day of weakness. if you think the news gets worse before it gets better, i think you have another shot to buy the stock right here. >> you look at the ibb, back to the entire space, the ibb today basically rested just below its 50 moving day. somewhere around 275. this index, and that is the etf that tracks all of these names or at least a lot of the core names, and you've failed five or six times. the market looks like it's on the down side. so you break the 50, i think there's a lot of arriving that wi risk rotated out of. >> i think you need a bigger market cap name.arriving that risk rotated out of.

>> i think you need a bigger market cap name. you'll get a big play, but if y look at glax owe, it looks terrible, but i'd rather be funded with a quick market cap. >> can you move the needle? >> i think it can because if you look at it, if they do global vaccines, i think these are the guys that are more apt to get a federal subsidy. where the other guys won't be able to do it alone. >> we have a market fwlash here. spirit airlines following in the after hours session. >> so here's what we have here. the stock down about 2.5% on very light trade. but spirit airlines came out with their traffic report for the month of september, a lot of numbers thrown out. they basically said that in september 2014, traffic in terms of revenue passenger miles, rpus, up about 13.5%. it also said that available seat miles were up 18%.

but more than anything else, this is probably what is moving the stock. they're saying the company believes that in its third quarter adjusted operating margins will be on the lower half of its previous guidance. the company plans to provide investor update on october 15th which will include more detailed guidance for the entire third quarter, but the bottom line for will this stock right now is that they're saying that operating margins for this third quarter will be on the lower half of its prior guidance and that's likely what is moving those shares down by 2.5% in the after market on very light trading. back to you. and we're talking about stocks priced for perfection. and this is one of these airline stocks that has ben extremely well. and on a day where we saw transports lead the declines loeter. is in the kind of stock you want to be in? >> kron. huge move. this stock has sold off from 75. basically the start of september. wonder what the down side is. with all the headlines, transports have some headline risk clearly on top of the things that we talked about

before, ebola and what have you. thousand we're talking about margin arriving. so to me it looks like 55 bucks is in the cross layers. coming up, if the u.s. does not lift its oil export ban, just how much lower might the price of domestic oil go? that's ahead. plus the one sector that held steady. a look at your best investment opportunities within the reads later on. (receptionist) gunderman group.

gunderman group is growing. getting in a groove. growth is gratifying. goal is to grow. gotta get greater growth. i just talked to ups. they got expert advise, special discounts, new technologies. like smart pick ups. they'll only show up when you print a label and it's automatic. we save time and money. time? money? time and money. awesome. awesome! awesome! awesome! awesome! (all) awesome! i love logistics.

welcome back to "fast money". big selloff today across the board. here's what's coming up. oil lower today. we have someone who says oil could fall another 30 bucks a barrel. find out why. plus one sector of the market that held up pretty strong, part of our special a-game series. an as transports lead the way lower, some traders are making bullish bets on jetblue. but first let's start off with the selloff. a deeper dive into three reports investors are watching.

>> markets are a little unsettled. earnings season again will be a catalyst. three stocks that you'll want to keep a close eye on for possible hints on the broader economy are koths compa costco. they report earnings in the wechwee hours. investors focusing on whether they can maintain membership growth rates, customers who want to buy in bulk. shares just about okay. alcoa reports after the close tomorrow. it may not be in the dow tomorrow, but investors were rely rewarded for hanging with the stock. you did it, shares up a whooping 50% just in 2014 alone. some look to the am alcoa for durable goods.

and on thursday, before the bell, pepsico.m alcoa for durable goods. and on thursday, before the bell, pepsico. alcoa for durable goods. and on thursday, before the bell, pepsico.alcoa for durable goods. and on thursday, before the bell, pepsico. another stock that has been an outperformer this year. it's gained 12% so far. more than double that of rival co coca-cola. back to you. >> and of course currency could be something to watch for this earnings season. particularly for pepsico. >> i pulled up costco last couple earnings reports that they had, even though they didn't beat, the stock actually traded higher after last two earnings reports. but to guy's point, if these ebola he had will li headlines s you'll see demand on that side and oil will continue to go lower. so the whole spectrum will trade lower. >> to put it in perspective on earning, every 5% move on the dollar equals about a dollar on s&p earnings. so a major draw we get on it.

i think a company like pepsi will be very important tell. this is a company that has been giving you you the margin expansion, but current city hit people don't know what to handicap. i think weakness is an opportunity to buy. >> a new report says a shale boom will be even bigger than expected by 2030 and price of oil could drop by 30 bucks a barrel. let's bring in harold joryork. will we reach the point where we'll see a decline in wti prices by $30 or whether there be some point at which the producers, whether it be in the shale or elsewhere, about pull back production? >> i think if you're looking at sort of near term events, you're more likely to see some reduction in producer activity. as oil prices fall closer to their break-in economics, some will dial back their drilling

programs which would then pull in supply and it tightens up the market. puts a floor on the price. >> given where we are on wti crude, what is that break even price in your view? >> well, it kind of did depeepe where you are in tight oil formations. but it's around $70 a barrel for a lot of the big oil -- bigger plays such as bakken or eagleford where you would start to see reaction on drilling activity. >> so quite a ways away from that. in terms of the companies most poised, because if we believe the shale boom will be larger than expected, who will benefit? >> well, i think the producers that you would see benefit from some sort of step out in technology would be somebody like a continental resources or eog and pie they're. they' ar pioneer. they're looking for how to tease more oil out of the ground.

if they find those break through, i think they would benefit. >> do you think the market really has this priced in terms of the mar beggin up side or ifs not eog or some of the other nam names? because i think liquid is where they have the up side. >> i think margins probably are fairly well priced. i think what the market is probably looking for is what happens, what is the market response to those tstep outs in technology. if you oversupply the market and put downward pressure on prices that's where i'm not sure the market has priced in the next technological move. but i think the market does recognize that the companies like the continental resources, eog, pioneer, they have been aggressive since the beginning and i think the market understands that they want to be the front leaders. >> harold, thank you for your time. where do you go in oil? >> i've been in pxd and it had a

hell of a run the last couple years. but i think it's come to an end. i'd probably stay with an eog where it's up 10%. i think people are hiding in that name. and if you think that boom is coming, these are the ones to play. >> it has sold off enough where it's probably worth a look. i think apc can hold the 1904 level, looks interesting. >> time to pops and drops. we got a pop from mobile eye up 2%. >> so a day where you you saw the sell side coming in hard and this up, this is in and it is pace of the announcement there tesla, so i think you get another day.it is pace of the announcement there tesla, so i think you get another day. but you could see people sell off that. i'm still long. >> and allergen. considering strategic alternatives to a hostile takeover. >> there was a story they were

looking for a bid above 200. it seems very much in play. meanwhile they're trying to get them to not vote his shares. something will work out at the end of the day. but don't know what with whom. >> general motors down 6% after morgan stanley cut the price target. this is a dramatic note. death of an auto analyst. >> i tell you what, one of the things that is being pointed out is that the things we've heard out of ford will be just as devastating globally. so whether the death of i don't know, but certainly stock closed below the ipo price. i would have said 32.50 was a place to hold. i still think the stock is interesting at these levels on valuation. you cannot necessarily impute ford's performance on gm. they have big issues in europe. to the extent they can start to slow the loss down that's a positive. >> drop if u.p.s.. >> it's imperative that it holds 94 which was basically the low

we saw in february. i think it will trade there. the report at the end of the month, i think you buy when it gets there at the 94 level. >> reits falling in the last month, but it seems to be the one group holding up today. we dig in next. i take prilosec otc each morning for my frequent heartburn. because it gives me... zero heartburn! prilosec otc. the number 1 doctor-recommended frequent heartburn medicine for 9 straight years. one pill each morning. 24 hours. zero heartburn.

♪ (train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities.

open port twenty-two-oh-one-seven on the firewall for customer db access. install version two-point-three of db connector and ensure verbose flag is set in case of problems. (clapping sound) isn't the cloud supposed to make business easier? get the one that can connect to the systems that you already have. today there's a new way to work. and it's made with ibm.

welcome back. we're keeping our eyes on shares of allergen and valiant. $192 a share on 58,000 shares of volume. dow jones has a report out citing sources familiar saying valiant and pershing square plan to boost their bid for allergen by around $15 a share. again, that's according to sources familiar with the plan there over at valiant and pershing square. that would put that bid right around about $195 a share. now, you may recall that earlier today, reuters had a report citing sources that it was maybe possible that activists could

come in with its own bid of around whatever it is, but that they would be open to selling the company at over $200ed a share. so you can see the stock moving ever so slightly back up toward that $190 to $200 per share range. again headlines today with regard to valiant and allerg ee again pushing shares higher. >> and the spread traded much tighter. positive actually expecting either. so if it's a similar ratio, the spread will not move much tomorrow, but a big move today. >> time for today's a-game. one sector holding up in today's says was the reits. over the past month, real estate investment trusts have had a rockier road dropping around 7% on concerns of rising rating. let's bring in jonathan lipp.

always good to see you. reits pays high dividends. so when rates are rising, they will do theirblerribly. what is the reality? >> reits proves to be a great entry point. we're still young in the did duration, but we think we'll get to a point where it will be an excellent entry point. they're not bonds. they have growing cash flow, growing dividends and that should continue. >> numbers back it up x number of months after rates start to rise. they actually outperform. >> they materially outperform. up 7% 30 days after they bottom. meaningful outperformance. >> with that said, you have two top picks here. first pennsylvania real estate investment trust which specializes in malls? >> yes, that's correct.

so what we like to do is find really cheap real either state in the public markets. you look it at the hilton deal that traded for $2 billion, waldorf astoria, a rich valuation. we think pen is misunderstood, quality $450 a foot, and better for the majority of the assets. and we just saw a glimcher which sold to washington prime. this is trading at 9 plus cap rate and we've been working with management to try to recognize the value. and unlock the value with the company. and we're hopeful that they will start doing some of these things to address these issues. and that value will be unlocked. but with buyers like washington prime and starwood, buying these types of malls either they will fix it or they will be pursued by acquirers. >> associated apartments, you believe the rental market will

remain strong? >> it's a great space. we came in on bre two years ago. thought it was trading at 30% discount. we worked with management, ran control slated directors. that company traded 40% up side. this soot oanother one very sim. we believe there is 40% up side to underlying asset value. reits trade building a 10% discount. we like these types of trades. kkr has taken a 4% stake out of the real estate group. other folks interested this buying the company. and either management should unlock the value or sell the company. and so we'll continue to work with them to try to help realize that. we like the apartment space. rental market is very strong throughout the united states. it has been accelerating all year and i expect it will continue to given the job growth and lack of housing that is being built. >> jonathan, thank you for your time. the last one i think sounded interesting. something worth a look. i like there is an activist

there. >> and you wonder about there is headline risk with the mall reits specifically. you wonder if at a certain point it effects thing. i'm still in the camp rates are going lower. >> jetblue analyst bullish on the stock. find out how much higher they think the stock could go next. your customers, our financing. your aspirations, our analytics. your goals, our technology. introducing synchrony financial, bringing new meaning to the word partnership. banking. loyalty. analytics. synchrony financial.

enagage with us. so open an account with schwab. and when a market move affects, say, a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time comes to decide whether to scale in or scale out... you can make your move, wherever you are. and start working on your next big idea. ♪

jetblue has been one of the worst performing transport stocks. >> this is actually the second day where we've been seeing bullish activity. in the november 11 calls yesterday, this name traded about two times average daily call volume. today more than three times. they were spending about 63 cents for those things. so that is making a bullish bet that the stock will be up 7.5% by november expiration. a couple dates are coming between now and then. earnings which is on october 29 and then analyst day which is on the week of expiration on the 19th. and here is an interesting statistic about jetblue. over the course of the last two years, in the month leading up

to earnings, it's been up every single quarter. and the day after, it's been down. so maybe this is traders trying to take advantage of the fact it's performing a lot better coming into earnings than coming out. >> we have a new ceo. so what is the trade? >> i'm with mike. deutsche bank just added to their short term buy list. it's been a great performer obviously until recently with the rest of the space. but you have to play from the long side. >> what is your feeling on transports? >> i don't like them. look at what happened with the cruise lines. nobody really -- everyone is putting it on hold. is it a buying opportunity? i think you have to wait until we get through october quite frankly. >> more options action every friday. check out options action.cnbc.com. let's get to some tweets today. it was a very big market day. so i know you have a lot of questions. first one, karen, are you still

long cumulus. >> sadly the answer is yes. i hope i'm alone there. this ironically today, it didn't seem to go down any more on a relative basis. but it's really been a terrible trade. i am long, hothough. i think it will continue to generate cash, pay down debt. we'll see november 7. go ahead and put your bag right here.

have a nice flight! traveling can feel like one big mystery. you're never quite sure what is coming your way. but when you've got an entire company who knows that the most on-time flights are nothing

if we can't get your things there too. it's no wonder more people choose delta than any other airline. it's in this spirit that ingu u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement.

time for the final trade. let's go around the horn. >> i think you need to be looking athe hysteria in the auto sector. protect yourself where you need to. this is extreme value at these levels. >> mobile eye. i'm still long on the chance to play this going to thursday. >> karen. >> yum trades down, buy yum. >> and a lot happening tonight. >> big show. >> baseball playoffs. are you watching? >> sure. >> liar. so karen mentioned eaton. not the same world, but i

thinker ingersoll rand, they put a $67 price target on it. i think it's interesting right here. >> thanks so much for watching. see you back here tomorrow. "mad money" starts right now. meanwhile, "mad money with jim cramer" starts now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there is a bull market somewhere and i promise to help you find it. i'm cramer. welcome to "mad money." other people want to make friends, i'm just trying to make you money. my job is not just to entertain but teach and coach. call me at 1-800-743-cnbc. every time we thought there can't be any more scandal