equity market. >> again, ten-year interest rate. still here all time lows. guys, thank you so much for joining me. and for the month of july. mike and evan. that does it for us on closing bell. "fast money" begins now. >> kelly evans was spot on. fast money begins now. i'm brian sullivan. melissa lee is back next week. tonight, major headlines from the european bank stress test. they are moving stocks at this hour. it's not just amazon surging to record highs. a number of actual brick and mortar retailers also busting out ch we're going to give you the names and tell you what it means for the economy and your money. later, traders are betting one big oil stock may be close to cutting its dividend, the name, what it might mean for the energy space. big show on a steamy friday in new york, but start with the overall markets.

stocks closing the month as they began. hire. s&p 500 closing up 3.5% for july. it's fifth consecutive month of gains. the nasdaq though was the big winner mock among the major indexes. up 6.5% in july. guys, here are some stats. 37 of the nasdaq 100 up more than 10% 11 of those up more than 15%. august tends to be a difficult month for the markets. a lot of good stuff happen, but dave, are you concerned? >> i'm concerned the names that have mooifed on the sectors. dividend plays, what have you. technology is extended for a trade. i think the consumer staples name, again, dividend plays, overextended and energy as well. look at energy. we talked about it last night. i'm telling you, you look at the correlation, energy and the actual commodity. the equity and the commodity. there is not that correlation. it's been split, so i'm looking at the energy names as pulling back a little bit. >> utilities, telecom, all led

today. which tells me the play not over yet. yield is going no place but back into the marketplace. yellen has told us, lower, longer. doesn't really matter what she tells us u quite frankly. rates are staying where they are. you have to search for yield and you're only getting that in the equity market. >> stay on energy for a second. on "power lunch," we showed a chart of the energy etf to the s&p 500 for six months. they tend to track together. lately they have di vernverged. if they resume, the markets are going to go down. >> you believe that will happen, yes or no. >> listen, i do believe that will happen, yes, to answer your question, but what i will say is i thought a number of correlations would take the broader market lower over the last six months and it hasn't happened, so, should it catch up to xl, yes.

>> it's the xle versus the s&p 500. and you can see, they're not perfect. but the peaks and valleys tend to correlate. oil has rolled over on the far right side. the write line coming down. >> bring it up. >> i don't think it is. we know why stocks -- >> there's a one-year. zpl is that correlation? >> you don't think that's correlation? >> i don't. i think i see the s&p doing what it was doing. it brought oil down. and as oil rallied, obviously, the s&p responded. >> dave disagrees. >> that is correlation. >> the oil market was supposedly a canary for a much bigger credit problem in january, february. meanwhile, the oil market's plobs were the oil market's problems. people were trying to look at commodity and resource exposure. which banks had the most exposure to some of the big companies and they were implied to be credit problems. what we have here in an august that's different than last year,

is we have china that's not going to come in. and try to devalue. if anything, what happened with the bank of japan last night, they didn't flood their market, means that japan has left, sorry, china has less pressure from a strengthening yen and dollar is weaker and the fed is out of the picture. look at this gdp print today. i don't think this is august 2015. >> that will give you an independe indication of the way the economy's going to be. say why did we rally so much? for reasons that were not related to supply mode. supply. it wasn't demand. demand's still not there. we've got a supply rut that's going last for a period of time. demand significantly needs to pick up to really. >> need the global growth. you have anemic growth here as we found out today. >> absolutely. the longer it stays at 40 bucks, i'm telling you, you're going to watch these equities come in, they're going to come in hard. >> what about the s&p down? let me tell you something. >> sector down. that's what we're talking about. >> it's still heavily

weighteded. >> we're having the conversation that the s&p is coming down in oil. >> what i asked guy was if oil continues to roll over, is the weight of energy stocks in is s&p 500 enough if they fall, it's going to pull the market down? >> no, it's not. it's everyone worried about banks, how much exposure. so that's the difference, but i don't think -- >> by the way, steve, $40, by the way, that fear has not gone away. >> no, it has not. >> balance sheets have improved because oil was at $50. >> they weren't going to sell. >> when oil was 40 or 50, okay, but i believe it breaks below 40 and you're looking at people eyeballing this sub 30 print. >> the knock on a lot of these energy names in my opinion is valuation. i think the lot of these companies are rich. i understand people going to balance sheets, but look at exxon's earnings today, they weren't great. exxon is a fraction in terms of revenue the company they were five or ten years ago, but still

traded a premium valuation. not that i think exxon is going anywhere, but then you look at halliburton trading at in my opinion, extraordinarily expensive valuations and if oil continues to move to the downside, i think those stocks will catch up. >> let pe ask you a different way. is oil the single most important thing for the equity markets now and if not, what is? >> i thought that for a while. i think that single most, the thing that tim discounted maybe correctly, i don't know, but i still think the potentially most important thing could be the chinese doing something none of us anticipated. brian, you wrote about that within the last month about the potential for the walk in one day with a big chinese devalue. >> that's the worry. >> let's ask it different. what is the most important, thing that's affecting the overall market to go to higher highs. that's not a black swan. it's the banks. financials. it used to be energy. energy's important, but the financials as a positive. >> as a positive bias.

i think the market again we're looking at how do you -- >> that's my point. so, the market is capped in my opinion. 2200ish is around the range that we're going to get to. >> you threw everything at this marketplace. brexit, the kitchen sink. it rallied back. i know everyone -- also tonight -- couple of trillion in global stimulus didn't hurt either. only made the only game in town, but still at the end of the day, it's funds that have to either cover or get longer and the hedge funds have not participated. the market rally, 9% and the henl funds. >> this is the most vexing market to me in a long time as an observer. go to this. we've got stocks up. we've got bonds up. we've got gold up, many commodities up. so i keep hearing about money on the sidelines. well, a lot of money has been put to work seemingly everywhere. >> all right, but if you look at participation rate, tlas lot of

money left. >> bonds stocks and gold going higher. we've seen it many, many times in history. 5.6, major amount of crash and back to banks, a flat yield curve at 75 to 80, if you look back over the last 20 year, guess what, banks have made a lot of money and been bid up when the curve has been this flat. >> because of the yield curve, this is not the call on banks. >> let's get a call. trades, tarting with you. >> i actually look at the energy sector right now. exxon's numbers were not good. i think that's part of the self-correcting mechanism. i think the refiners are now ready for a trade. again, you're getting through this maintenance season. you're going to get back to a trade. if refiners were defensive when oil was pulling back, you're going to see the same trade. again, valuations in tsoro and vaa lehr o look interesting. >> not a fan of energy.

i think you're going to see a bounce in commodity. a short lived bounce and then it's going to sell off again. seller of energy. i'm a serl of the consumer staples. a seller baselically of text message here at least for the short-term. the only thing is bio tech. i know there's head winds, but i think there's value there. most of the big cap names have reported. you can see the sector continue to trade. >> everybody wrote off the retail space. i'm long j.c. penny. >> great trade. stock's up 48% this year. >> it's really poppeded again in the last couple of weeks, so i'm maying this for a lot of fundamental reasons, but also playing it because retail was thrown out. >> guy. >> refiners, i think they reverse earlier this month. i also think tlt stopped. if you look at yields, stopped where tim said it was going to stop a couple of weeks ago. 1.6%. i think that's headed back down to one and a quarter and the gold market, regardless of what you think b about gold, it still

works. >> a news alefrt on the result of stress tests on european banks. wilfred. >> thanks so much. european banks have survived stress test, but troubles remain. the chairman of the european banking association said while we still recognize the extensive capital raising, this is not a clean bill of health. there remains work to do. the standout loser was bm p ps who saw its capital completely wiped out in the test's adverse scenario, however, the embattled italian lender, the plan today, thus averting staser. fizen in austria and uni credit if italy also disappointed. uk banks rbs and barclays saw significant falls in their capital position from the base case to adverse case. which is a concern to address medium term. while deutsche bank shares were rising in trade as their result

came in better than expected. the eba's test included 7% drop in gdp which under crisis has been averted. the test did not include brexit. reminder that the outlook remains bleak for european banks. brian. >> thank you very much. tim, let's talk about this. coming into show, i took a look at a returns. deutsche bank down 45%. royal bank of scotland down 42%. bank of italy, i know it's not a household name is down 75%. one of f the biggest banks in one of the biggest economies in the world has lost three-fourths of its value in six months. first of all, for folks in tv land, i didn't hear anything wilfred said. >> deutsche bank is up a couple of percent. >> your point is that look, a lot f these banks need capital ch if i look at the italian

banks, would i want to own that? no. the simming risk around the world with largely backstopped by central banks, so what's the call here? it's we're trying to look at where banks have stressed in the ambulance sheets. u.s. banks have better balance sheets than they've had if ever, certain ly in decades. i'm not sure, this is anticlimactic to me. nothing to traden here. i wonlt buy european banks. i think there will be equity. >> even though there's 50, 75% decline, tim is not buying these bank stocks. zpl gl the quarter i think on july 27th wus a disaster. unmitigated disaster is the word i would use. did they pass the stress test? yes, with flying colors. i don't know enough about it. to tim's point about the equity going down, i agree. i think every rally in deutsche bank for the last 18 months have been a selling opportunity. in my opinion, nothing's changed. >> tim, you can talk to this. this wround of stress tests was

not pass fail type of thing. it was more or less request can they go back to making money. it's not any real benchmarks they're put in. to tim's point, i don't know if there's a real trade around this. been there, done that. they've had the losses and we move on. >> lost half their value and still no be sure to catch wilfred's interview with jamie dimon monday, 1:00 p.m. eastern time. right at the top of a fine program called "power lunch." up next, two retailers maybe signalling the sweet spot for the american economy. they're hitting new highs today. names and how you can get in on the action. plus, have you been to a bunch of movies this summer? you're not alone, tim. it is a bummer of a summer at the box office. the studios most at risk and july was good to the dow, but awful to oil. could this spell big trouble for one stock's sizable dividend in the name and why some of us are worry when "fast money" returns. with the xfinity tv app,

now you can watch nbc's coverage of the rio olympic games live at home or on the go. it seems to be that the trade that keeps on working is the american consumer. two retailers in fact mitting all time highs today.

home depot and tj maxx. take a look at performance of some consumer names. coach near the top of the list. dollar general has done well. dollar tree has done well. j.c. penny, dick's sporting goods. many of the stocks at 30, 40%. >> pete talks about tj maxx all the time. i will say this. i think as a show collectively, we've been talking about home depot now for years. $145 price target. people will say it's too expensive. i say with about 14% eps growth, into earnings, i think the climate still works for them. it has for years. they have their inventories under control. you want to stay long on retailer, i think home depot's the best in the space. >> i agree i think you have to stay long home depot. i think my len yals are going to shift, move out of the cities and be shopping home depot.

i love tj maxx and i love the dollar stores. >> okay, there you go. the names we mentioned. next up it is official. federal health workers announcing today the first locally spread case of the zika virus. meg has the details. >> that's right. we've been expegting these cases to start spreading in the united states and today, we got confirmation from the cdc and florida department of health that there have been four cases of locally transmitted cases of zika in florida. these have been detected around the miami area and that is really all we've seen so far. although the cdc says we could see more. we have this mosquito mostly in the southern warmer ta eer stat. as for the work going into zika, there are a lot of companies working on this. gilead is working on a potential drug to treat it. of course intrexon is working on a way of controlling the

mosquitos that transit zika. people say that's the nearest term way to make headway here. of course, the company probably seeing one o f the biggest impacts is sc johnson, it makes off. we took a look at the cruise companies because these have a lot of business where zika is spreading. i checked out the latest tenqs. quarterly filings. no mention of zi kai in them. whether we'll see those in the future is another question. >> thank you very much. steve grasso, you're concerned. the story should have everybody concerned, but from a "fast money" angle, you're concerned about travel. >> they just nailed it on the cruise line. rcl, both down on the year. this is huge for them. caribbean, latin american, but if you look at jet blue already warned about the impact of the virus. hilton warned about it last week. marriott.

so something to watch hotel after hotel, airline after airline. start warning about this, it's a much bigger story. >> haven't we seen this over and over again? >> every time we have a health care around the world. >> over the transmission capability of zika. and we know nothing really about this. so i do believe -- in the long run, i think you'll be right but i think this has the ability to be a much more prolonged event because it's a mosquito. >> i just think of all the things that we've gone through on the health front over the last couple of years and last decade and every time, you've wanted to buy. >> here's the difference with this. pregnant women. are affected by it. if you're a young woman and thinking about traveling or having a baby, you're not going to get in an airplane and fly off to the caribbean, so it's going to deter you from doing that. people are wearing masks in airports. >> affecting potentially baby.

>> we'i think you guys are both speaking the same thing. >> i think he's more of a short-term thing. watch out. you're more in the long run. everybody's going to be okay. >> all right, still ahead. it was a month to forget for oil and many of the big oil stocks. crude crashing 17% this month. some major oil stocks with double digit percentages in just 30 days. coming up, we're going to find out which oil names could be in danger of cutting their dividends. here's what else is coming up on fast. >> here's what drug stocks are doing. and we'll tell you which name traders see breaking out next week. plus, hollywood has a dirty little secret to share. it's movies stink this summer. ♪ yeah. worse even than -- and we'll tell you which stocks could be vulnerable. when "fast money" returns. medicare options until you're sixty-five, but now is a good time to get the ball rolling.

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welcome back. from hollywood bread and butter, except this summer, they're earning less bread. >> welcome to -- >> summer ticket revenues are fizzling faster than a bad sorority party. according to box office mojo, ticket sales are down 31% from 2015. >> we need somebody who can relate to stumd young people. >> whether it's universal's neighbors, two, which is earning a third of the original or alice through the looking glass, which has done worse, teenage mutant ninja turtles sequel cost more than the first, but has made less than half. and $165 million to make and so far, dmomestic box office is around 100 million. a lot is riding on paramount's

remake of ben hur. budget unknown. the 1959 mgm original earned a record 11 oscars and was the most expensive movie made that the a point. summer aside, box office total year to date is up slightly and a lot of these movies make a lot of oversee seas. brian. >> all right. quick comment. movies. not a good year. >> it's interesting. proves the point about original content. netflix investing heavily. amazon doubling spending. >> it might not be a good summer, but it was a good year. star war, dory, all the captain america. all the superheroes. they're trying to hit the ball out of the park. still dressing up? >> only on saturdays. >> star wars movie was over rated. i thought it was very average. >> i think this makes lion king interesting. what are we doing?

>> lion's gate. interesting thing. we're talking about things have a chance to really rally down the stretch. i think refiners are overdown on the downside. >> i like, celgene. a lot of these big cap farmers report reported. pipeline, super strong. >> first of all, i believe the three-day rule. eastman chemical was battered up today. down 7%. the headlines were fell the most in two years as lowers basically. adjusted eps view. this was day one of the three-day rule. i would wait for it to hold $64. this one to me feels like it has 7 to 10% upside shortly. >> guy. >> it was an honor to have you on board. mel's back next week, but hopefully, you enjoyed your time on the desk here of "fast money." >> deserves a hug for that. >> fire alarm did not go off. no hugs. >> you know the rule. >> you think melissa's going to

abide by this rule? >> i think it's going to hold 30 bucks 19 times. as cheap as it's been in a while. big shortage. >> thank you, all, i did enjoy my time. you're done, i'm not you can catch more "fast money" here 5:00 p.m. with melissa next week, but options action begins after this break. we're drownin.

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zblmpblt welcome back. i am brian sullivan, the tome prepping behind us here. while they are doing that, here's what's coming up on the show. >> the stock traders think will be the first to get cut. plus -- ♪ >> pretty much sums up what rates are are doing and you won't believe how much lower the charts say they can go. and talk about a drug deal.