my son actually refused to go to a yankees game with my husband and he's 6. >> i love. we're out of time. much more information on the web. thank you for joining us. really appreciate it here on "closing bell." kate kelly, dan greenhaus. that does it for us. what a week it has been. let's get you straight over to "fast money" with melissa lee and the gang. >> thank you, kelly. "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square i'm melissa lee. your traders on the decemberric steve grasso, david seaburg, brian kelly and guy adami. tonight on "fast" one activist investor taking a big stake in american express, sending that stock soaring. we'll tell you what it is about his record that's got traders so excited. plus there's something going on in the market and it could be signaling a major rally ahead. one of wall street's most bullish and correct strategists is here to explain. but first to the markets this week. the dow seeing its longest losing streak since 2011, falling seven straight sessions. transports leading the way lower. oil lower again. when will be safe to buy?

guy adami, you pointed this out earlier. the tlt. massive move there as well. >> b.k.'s been on this energy move. crude with a three handle. it's pretty close now. the things i took away from this week, the move in crude was decisive and very interesting. the move in the bond market, you just talked about it, now you have ten-year yields well below 2 1/4%. we've talked about that and the pivot. and the russell. the iwm. we've talked about 121 being critical support. well, guess what. closed below there today. then we have tom lee coming on to say exactly the opposite of what i believe is going to happen but everything is lining up. we've lost the transports months ago. we're losing the russell. at a certain point it his to filter its way into the s&p. >> i think the other thing is we talked about it last night is the volatility that we've seen in commodities, that bewe've se in oil and quurnsies throughout the last couple months has finally to the u.s. stock market. some of these stocks are getting absolutely killed. a name like disney to be down as much as it was this week is crazy. you're starting to see that volatility come in. the big takeaway from today for me was actually in europe. if you look at what happened in

germany their economy is weakening as a knockon effect of what's going on in china. so as we go into the next couple weeks look for that. look for perhaps europe to weaken and that trade to come off as well. >> you mentioned disney. we're seeing other leadership stocks like apple down 5%. tesla down, what, almost 10% on the week. biotechs had a rough week as well. >> you're seeing a lot of the stocks that really did well get sold and you're also seeing a lot of the stocks that didn't really underperform get bought. zmaz because it's been a massive risk off scenario this week. you see the guys selling the ones that work but they're covering the shorts. driving the prices up. of the stock. so we're really underperformers. i've got to tell you, i think we're at the point right now where the tape should be bought. i'm very confident here. i look at the russell and i say the russell, the fact it actually was underperforming today probably indicates the fact that people are getting comfortable with the timeline of the fed. and i do believe the dollar, near all-time highs is basically at the point where it's not going to go much higher in the short term. people are comfortable with that. the russell's been a dollar trade for a while and i think people are taking it off. >> do you agree?

>> i'm going to take the other side of that. first of all i think the fact the russell has not been below the 200-day moving average the entire year and finally broke i think that's really troublesome for the marketplace. i think the fact the s&p is battling the 200-day moving average troublesome for the marketplace. no lag between the ten-year and fed funds rate. that pushes us into an inverted yield curve sooner rather than later. i think it's problematic for the entire market. >> what is the catalyst here? what kind of catalyst are we looking for? >> lift-off. i think it's lift-off. i think september -- >> what's lift-off? >> for them to raise rates. think about it this way. we've had, and i've spoken about this a number of times, right? if we've had a normally 350 basis point difference between the fed funds rate and the ten-year yield, and guy spoke about it in the beginning of the show, the ten-year yield is coming in now. every other time we had a major rate raising cycle we've had a bigger gap between the two. >> right. >> we've also had inflation. so you've had those yields actually rising, not coming in.

we have just the opposite right now. it's deflationary and there's no gap. >> the way the dollar traded today had a big reversal versus the euro. and to me if you could walk in on monday morning and see oil up 3% just because the dollar could get weaker at this point, so for me i actually covered a lot of my oil shorts today. it's gone down pretty darn close to where i thought it would go. i still think it goes lower but in the short term the catalyst you're asking, you see oil go up the stock market will go up. >> despite all the doom and gloom one strategist says we're gearing up for a year-end rally. and since our next guest is usually bullish and often right we decided to introduce him with an appropriate song. "sunny days." you might know it from "sesame street." tom lee the managing director of research at global advisers. always great to see you. what do you see in the markets that makes you think we're poised for a rally year-end? >> i think at this point people are mostly half empty, right? because the markets have been weak and energy's been terrible. but we saw a couple things this week that gave us some optimism.

one is short interest on the sp spidr. up 58% year to date. it's skyrocketed in the last month. it's 20% higher than 2014 when the market made its v move into the end of the year. the other thing is the aai, the retail investor has gotten extremely bearish. it's minus 20%. it's only happened 22 times since 1987. by the way, 2/3 of those rallies six months later are v-shaped. 7% or above. >> i'm going to ask this question which i asked here on the desk and that is what would that positive catalyst be because in your notes is when the positive catalyst emerges then we'll see buyers come into the market. what would that catalyst be in your view? >> it's always tough to know what will change the half empty to half full. i think it could be a large transaction. it could be insider buying. it could be -- i mean, it could be something as simple as the view on the fed might change and

it's hard to tell whether it would be good tore bad for investors to bush september into december. there's numerous catalysts. maybe it's something you mentioned earlier, could just be the dollar changing or energy as oil rallying or the commodities rallying. >> tell me why i'm wrong. crude oil was a $110 commodity last fall. $43 now. yields if you ask any person 99 out of 100 people in the last year would say given the run we've seen in the s&p, ten-year yields would have been closer to 4% than 2 1/4%. i think those things are foreboding. why am i wrong? >> well, you know, where oil and equities really have never been in sync for very long. so we're a consumer of oil. so the fact that oil's down, it should ultimately benefit the s&p. where the ten-year is clearly one of these tension points. i think half of the investors we speak to think we're still in a deflationary world and others think we're starting to see inflation or reflationary

conditions start to take place. and i think that's what the resolution's going to be in the next 12 months what we're going to see. i actually think the market is paying for reflation and that's why the capex growers are growing this year. >> was your highest conviction contrarian idea of the 15? >> it really depends on the time frame. but if you look at that list something jumped out at me. looking at groups that have done well since may but looking at a contrarian name. a laggard within that. and i think it would be a name like toll brothers. i think the housing complex has been a pretty reliable, high sharp ratio trade to make. and toll brothers, you've seen housing's actually had some pretty good momentum and positive revision. >> tom, going to leave it there. thanks for your time. tom leif fundstrat. some of the other ones. e bay -- >> i'm in itb which is housing construction and that's a play again on lower rates that while i do think things are

certainly -- the wheels are coming off the cart the housing market with lower rates should be okay for that. so i tb i think is the way you trade than. >> when he says contrarian, toll brothers is up 9%, 10% year to date. if you go contrarian in the housing space you've got to go to the names that haven't recovered already, which is kb homes, which is down 8% or a pulte, which is down a like amount. it's basically 8%. i own kb homes. i think the household formation is where you want to be and i would buy the underperformer there. >> you like this underlying thesis though about a year-end rally. you agree with that. >> i totally agree with that i think we're going to see the year-end rally i like the contrarian view i look at the outflows in mutual funds and just the fact there's not a lot of protection with a lot of these hedge funds and traders. i think that's a perfect example that there could be a melt-up essentially in the later half of the year. again i think we're rangebound until lift-off and then i think the market trends a lot higher. >> coming up next don't leave home without it. american express rallying after one well-known activist took a brand new stake. we'll tell what you it is about his track record that's got traders so excited.

plus think earnings are over? think again. a slew of big name reports on deck next week. so we're covering all the sectors. and the most important stocks in each. in a special take your position sector edition. later, move over "fantastic four." tonight we're giving you four fantastic trades, ready to send your portfolio into the next universe. all that and much more ahead on "fast." what do you got to offer us today? ♪balance transfer that's my game♪ bank you never heard of, that's my name♪ haa! thank you. uh, next.

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berkshire hathaway out with earnings. jackie deangelis has the details at headquarters. jack. >> hi there, melissa. it pears americashire has missed according to what we were really expecting here. let me go through the numbers for you. operating earnings down 10% for the quarter compared to the same quarter last year. operating earnings per class a equivalent share $2,367. we were looking to be a little bit over 3,000. that was also down 10% year on year. what appears to be the issue here was the insurance underwriting segment of the business he. it went to a loss year on year. at the same time it seems like they got a little boost from their non-insurance businesses as well. we are watching the shares in after-hours trading. the a shares unchanged, very low volume and of course the b shares slightly lower as well on unusually light volume as well. back to you, melissa.

>> thank you, jackie deangelis. a lot of people look at this as a conglomerate. jackie said insurance was the problem. do you see insurance having problems? >> well, i'll tell you what, some of the life insurance actually did very well earlier this year when we had the higher rates. in terms of the stock. the problem with berkshire hathaway is you're actually really -- you are buying fundamentals here as with when you buy a life insurer like a pru or something like that you're buying the expectation sningz things are going to get different. it's very hard to trade this. if you want to trade a negative sentiment on insurance look at something like a pru. >> look at the financials here. take a look at american express. what a chart soaring after activist flifrt value act took a $1 billion stake in the name. do we believe this activist investor can do anything to grow revenue? that's the problem with american express. it hasn't hit those revenue growth targets for years now. >> it's been a lot of bad -- besieged by bad news. >> good word. >> thank you. besieged. i've got to think of that for haiku. no, costco was the worst of it

this year. it's also going downhill from there. it's not an expensive stock in terms of valuation but it seems to be a declining business. can they stop the stock from going down? they did it today. but i caution, and i'm not comparing the companies. but recall coca-cola made an investment in gmcr that was much bigger than this and look what's happened to the stock since. so yes, you can slow it down but i think it's a declining business. >> this particular was also involved in microsoft and was instrumental in getting a new ceo which had been a major catalyst in the stock. maybe there's a different comparison. glass half full. >> perhaps. >> i'm with guy 100% on this. it will stop the selling but it's not going to necessarily change anything. what kind of value are they going to extract all of this? already a significant buyback in place. tell me what is going to change or what will change to bring this stock to higher levels. >> if you look at visa and mastercard, both of those names are roughly up 13%. they're definitely the favorites in the space. and everywhere you go with higher fees with american express it seems as though

people are stopping accepting american express at places just boots on the ground where i go i'd rather be a buyer of the names that have outperformed. >> we still have quite a few companies reporting earnings next week from several fast casual stocks to big name tech stocks. perfect time to die little sector style take your position ahead of next week's big reports. kick it off with two big names in the fast casual space, shake shack and el pollo loco. guy. >> shake shack was up 11% today. that is a difficult stock to get your arms around. dan nathan, who will appear on "options action" minutes from now -- >> waiting in the wings dp. >> -- has done an excellent job handicapping this name. i can't play in that arena. what i will say is this. look what happened to jack in the bongs you're starting to see qdoba comps start to disappoint which is why the valuation went from 98 to 90. i still think jack's a great name. i think el pollo loco, let's see what happens -- >> speaking of waiting in the wings. >> pollo. >> put a feather in your cap for that one. for me shake shack's the one you

trade. it's because of the momentum. and i think what you're getting is a fomo momo. fear of missing out on the momo. >> that might be a trade school if you put it up. >> macy and is nordstrom out next week. seaburg, what do you say? >> the bar's been reset in this retail space. i think macy's is the one to own in this short term but long term i caution you i think they're going to have some real struggles. it's a great brand. i get it. but i think their online business is going to compete head to head with amazon. amazon's going to displace them by 2017. i think right now it's time to buy it for a trade. the stock's been beaten up there's no expectations they're going to make numbers i think you get a trade to the up side but i caution long term i'd stay away from the stock. >> where in retail would b.k. go? >> you know, b.k. doesn't like the retail space at this point in time because even though you've had this decline in oil it has not shown up in consumer spending. sow look at something like a macy's down quite a bit, probably shouldn't be. i might, i might pick -- pick at that but it's not really a long-term type of investment for

me. it's more of a trade. >> yeah. grasso. >> target. target's been an outperformer and i think it's up roughly 4% or 5% year to date. i think if you have to play in that retail space you go there. also when you want to look at a different name deckers. i own that one. >> you love that one. >> i love that one. and you you know what i always say, it's time to buy in august. people don't think about it. you don't think about uggs in august but they do have the sandal line, right? i'm buying it. you're never supposed to buy for this but i am buying because i think it makes an excellent takeout target. >> a takeout target. i thought you were going to say it's a seasonal trade. >> it's a seasonal trade too. but you have to wait till october to buy it then. >> you think it's a takeout target between now sxokt then? >> it could be between now and monday but i'm not saying anything and i don't know anything. don't buy it off that. i own it around these levels. i own it az astand-alone but do i think it would make an excellent takeout target. >> tech. alibaba and cisco next week. grasso back, to you. >> alibaba if you look at earnings, if you look at the

chart it's been beat k on earnings but it's caved about 30% going back to november of 2014. so beating on earnings doesn't mean anything for this stock and it's been a mess on the charts. so if you look at cisco on the other side of it, yield's about 3%. the chart looks much more intact to me. if you had to buy anything in tech, i think you're okay in cisco. >> seaburg. >> i agree with him 100%. i think the money's going to gravitate at least in the short term to some of the old school legacy namds. i think for a short-term trade i'd own cisco over baba. >> where do you go, guy? >> is this a would you rather game or -- >> i'm saying would you rather trade am baba or cisco between two? >> cisco. alibaba that's a tough one for me. i think cisco's been intact for a while. you've had up side surprises the last couple quarters for cisco. leads to you believe it might happen again. wichb given the choice between the two which is how you started this -- >> because they're going into earnings next week -- >> don't bark at me. zplienl ba

zplie >> i'm not barking. >> that was a bark. >> seemed barky to me. >> you're watching cnbc, first in business worldwide. in the meantime here's what's coming up on fast. >> woof. >> what's better than the new "fantastic four" movie? "fast money's" edition of our four fantastic trades. from stocks that are on fire to rock solid trades, we've got you covered on fantastic picks ready to transport your portfolio to new heights. plus, twitter, back to square one. closing in on its ipo price. but is the move so bad it's actually good? all that and more ahead this hour.

the new "fantastic four" movie premieres tonight. in honor of the big day we thought our traders give you four fantastic trades. each trade echoing the superpower of one of the main characters. let's start out with mr. fantastic, whose superpower is to stretch. b.k., what's a trade that might be a bit of a stretch? >> well, it's actually becoming more of a stretch the lower it goes. but it's a name i've been in for a long time, and that's blackberry. and it is a stretch because the longer you go without somebody taking them out the more problems you have in this particular case. however, i do believe that john

chen is turning this company around. he's execute on his plan so far. they are cash flow positive. there is a lot of value to this company. it's just not recognized yet by the street. so for me the stretch trade is blackberry still. >> what's going to make the street recognize the value in blackberry when they've sold off apple 5% in one week? >> for me the value here is their qnx, which is in every single one of the connected cars. so apple car and google car, they both run on qnx. to me when that starts to come into play that's when people are going to want to own it. >> who can back b.k. up on this one? >> i can't. i'm not a blackberry fan at all. i said twitter is the social blackberry. i wouldn't touch it. i'd leave it alone. >> i'm the same way. sorry, b.k. >> that's okay with b.k. you know what? >> no, i'm not -- see, don't go there.

i'm with b.k. here. and i will say this. if you go to the archives of "fast money" and look at b.k.'s calls over the years, the anales. >> annals. >> that's what i said. you'll notice he's been spot on in blackberry. >> human torch. grasso, what is on fire? >> netflix. it's up 153% year to date. 65 million subs. and if you look at where the estimates are going forward for global subs, they're anywhere from 140 million to 200 million. so you don't buy this one on valuation. you never did. you never can. up 153% i'm not really sure but i think they have a lot more room to climb higher maybe going forward. but obviously people are going to dip their toe in here and be a little afraid. >> super quick you want to short this one. >> no, i love netflix. i think the stock's going higher. it's going to go a lot higher. they're exiting this year in 80 markets. next year 200 markets. the international expansion's

going to drive this platform. >> next up, the thing. it's made of rock. so what's your rock solid trade? >> lockheed martin. 17 times forward earnings. look at the way the stock has behaved over the last five or six years. since obama took office in '08, everybody said the defense names are going to get crushed. the exact opposite has happened. they make really cool stuff, by the way. 3% dividend. lmt gets you done. rock solid. >> you look really good encased in rock, by the way. finally, the invisible woman. and for that we go to seaburg. the trade you think others are missing. >> i drew the short straw. there's no doubt. my pick's bristol-myers. bristol-myers is a stock that's going to benefit tremendously from oncology. we had our bus tour on health care. we visited the company, and this was the bright spot within the entire conference. the opportunity for them here is enormous. we're looking out to 2017. this stock's going to grow at 20% a clip per year. it's an amazing story. i mean, they're going to come down and actually -- you can hear about certain cancers actually being cured. it's a ridiculous program.

>> who likes this invisible woman? guy, do you like this invisible woman? >> excuse me? >> trade. >> i was involved in something else. jane wells and i on twitter together. i do like bristol-myers. this is a big jim cramer name. he says it all the time, bmy will get it done. if it's good enough for jim and mr. seaburg it's good enough for me. >> time to go around the horn. 386. >> fitbit. you know my three-day rule. monday is your three-day rule. you've got to make a series of a little bit higher lows. just see where it's going to trade, let it open, let it circulate a little bit around the trading floors. see where it's at at noon. >> seaburg. >> nvidia. the stock spiked massively today. i say sell this stock short for a trade. 50% exposed to the pc market. people are looking for the bottom in the pc market. i don't think we're there yet. i think you can take some off here and you can probably buy it back at cheaper levels. >> beakers. >> so we started the show talking about housing and i'll ebbed it talking about housing. itb. love this name. i think low rates are going to be good but also technically

it's resting on a very important trend line. risk hiech reward. great trade here. >> guy. >> love mr. seaburg. i'll take the other side. feels like nvidia, nvda breaking out to the up side. some analysts think -- this is going to be a good one. >> that does it here for us on "fast money." thanks so much for watching. see you back here 5:00 on monday for more "fast." but don't move, "options action" starts right after this break. stay tuned. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberyy apple scones smell about done.

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hey there, we are live from the nasdaq marketsite. and look who i found. our resident chartist, carter braxton worth. while these guys are getting ready for the show, here's what's coming up. >> people want leadership, mr. president. >> no, they don't, michael. because the winners have been taken to the woodshed. and we'll tell you which name could be next. plus -- ♪ one is the loneliest number that you'll ever do ♪ >> and that's just how far away twitter shares are from its ipo price. but there's one thing that could set it up for a surge and we'll tell you what it is. and -- >> we have a problem. >> that's what traders are saying about transports and small caps. and we'll tell you what it could mean for the rally. the action starts right now.