>> thank you. >> of game stop. >> now and then. >> comps were down 10%. >> they fight a quarterly bat. the trend is against them and try to make it work three months at a time. >> a couple of names to keep an eye on, jackson hole tomorrow. mike and stephanie, thank you. that does it for us. "fast money" begins now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. traders are steve grasso, karen finerm finerman, david sieberg and brian kelly. tonight we're all over the story captivating the nation, and mylan firing back over its epi-pen price hike and a serious cause for the concern. the one chart that may be signaling the rally in stocks could soon be coming to a screeching halt. later, one firm is betting the house on a rally in netflix. we'll take you behind the call that says netflix is set to surge another 50% higher from here. first we start off with the fed chair janet yellen hours away

from taking center stage in jackson hole, and investors will be hanging on every single word she says. cnbc's senior economics reporter steve liesman is on the ground with what is sure to be a very big day for the fed and for the market. steve? >> reporter: yeah. melissa, good to put it in context. for the past several years the fed meeting in jackson hole has taken place amidst a crisis, the financial crisis and the fear that the european union would break up. >> labor slack is coming out of the labor market. we're making frustratingly slow progress and the some progress on inflation, and i think that gdp growth in the second half of the year will be stronger because the consumer is strong, and even the second quarter gdp number was disappointing, because of a inventory number and final demand was strong and i think the case is strengthening. i'm not going to speculate on

which meeting. >> reporter: so there's still plenty that the fed is worried b.u.s. and global growth. been sluggish. inflation below the 2% target and the fed's framework for deciding on rates, that's the topic of the meeting. it's the subject of some pointed criticism, including a report in the "wall street journal." they will frame a meeting more about controversy about what the fed should be doing longer term rather than crisis and some of the topics, st. louis fed president 7:30 and loretta messer is on at 8:30 eastern and then we have the big speech by fed chair janet yellen. full coverage at 10:00, melissa. >> we've certainly got a lot of fed speak in recent weeks and all eyes will be on yellen. what's interesting is if show comes across as even slightly more hawkish than expected, that wouldy essentially catch the markets offsides, wouldn't it, since most people don't believe a fed hike will happen in september. >> reporter: i think that's right, melissa, and we could be back to that game where the fed just wants to claw back flexibility.

we were here this time last year when bill dudley said the case was less compelling. i interviewed stan fisher who said it was more compelling. who was right in that? they didn't end up raising in september. they did raise in december. it may be that the fed chair wants to have that option to be able to hike, and right now you're right, the market is priced for no hike, maybe one by december seems to be plausible or possible in the market pricing right now, but you're right, that would be a big issue and market is going to be very sensitive to that language tomorrow. >> steve, thanks so much. steve liesman in jackson hole wyoming. >> pleasure. >> brian kelly, what's your take on what we can expect tomorrow? >> well, listen, i think you're right in asking the question about if janet yellen is more hawkish than expected. that could shock the market because that's really the risk that we have here. a lot of people, even though there's been some talk, fisher was a little bit hawkish earlier this week so there has been some talk. the ground has been prepared that maybe there might be a hike but the markets aren't pricing

that in yet so if you get a hawkish janet yellen that could be a problem. >> a hawkish janet yellen, won't she talk hawkish? that's what she's done. >> i think she is runs the risk of losing credibility by doing that though so that's the other side. >> however she is tests -- i guess she gets to test the waters. >> where the market is near all-time highs. >> does she care to test the water. >> i think she does care to test the water, really think she does. i look at it and say we're going to walk in. i think the trade will be she will be more hawkishing. she can't be more dovish or they can't be more dovish, if you will. >> if she doesn't say anything that's aggressive at all i think the market rips. >> three of us feel she will be hawkish, and we feel she's genuinely been hawkish and acts dovish and is the layup trade to buy xlf ahead -- >> that's the trade tomorrow. you buy the banks. >> i agree with this sort of hawkishness, and i think we're going to see another increase.

i wonder though. what -- if i need for certain that she were going to raise once and that's it this year, i don't know how i would trade, that down the first day of the market? yeah, maybe it. could it recover very shortly after that? >> i think it would recover. >> and would the financials gain on it? or would they sell off? >> i think they would gain. >> set up to gain. >> okay. >> the easy trade -- you always want to say that very non-frequently, if you will. easy trade. >> but a no-brainer, yeah, yeah. >> but i think xlf, if we're all talking about the same thing, i think you've got to buy it. >> agreed. >> that's the easiest thing in a non-easy trading world. >> talks hawkish and not raise rates. >> it's not about that. it's not about raising rates. >> it's a two-day trade. >> about sentiment on rates. >> 25 basis point move won't impact the bottom line of the earnings of bank of america or

any of the banks. it's a sentiment trade. >> more importantly i'm actually long the banks now. >> what. >> >> i've been long the banks. >> brian kelly is long the u.s. bank? >> in the last five minutes. >> so why? >> while were you taking vacation i was actually working and i bought the banks and the reason why is libor, remember that old thing libor, that's been spiking up at a huge percentage. banks' loans are based off of libor so banks are going to make more money in this environment. so she comes out hawkish, i agree with all of guys. i think the banks could rally and you stay long them. >> the assumption is she's going to come out hawkish. >> i think she always does. >> really? >> she always talks hawk and acts dove. >> make the assumption -- >> i think i agree with that. >> but she has forced to preserve credibility. >> constantly. >> and come out hawkish? >> constantly to all double talk and sound hawkish and act

dovish. >> how do you trade tomorrow if she doesn't? >> if she doesn't what? >> if she doesn't come out hawkish and comes out sort of neutral. >> i think utilities, gold, gdx, both broke through their 50 days and now sitting on 100 days. she acts dovish or talks dovish, gdx, utilities and staples. >> let me ask this. gold is at a one-month low s.gold telling us that she will be hawkish? >> well, it's indicating, and gold has had a tremendous ride. grasso has mentioned it and has been on the gdx the whole time. mentioned it had a huge run. bought some gdx yesterday on yesterday's selloff. my final trade on monday which looked awful, but i think that's already priced. in the hawkishness is priced into the gold market. gold appears to be in a long run gold market. >> you can make the argument that she will be hawkish. i'm not making the you a sumgs

that gold is telling us that story or the meltaled and mines names will tell us that story and if she comes out in that tone you jump in. >> it was an exhaul. ed trade. gdx was 122% year to date. now still up 96% and people are saying why am i looking a gift horse in the mouth and let's take some off the table. the only risk is to the downside if she does sound hawkish which she usually does. >> all four of you guys on this desk tonight is saying she is going to come out hawk strategic defense initiative. >> you know what that means. >> and, therefore, the trade is banks, and if she comes out dovish then the trade to stick with what has been working. >> correct. >> by bonds, by gold, utilities, dividend yielders, but you guys are in the hawkish camp, right? >> semi-hawkish. >> what happens to the broader markets if she's hawkish, as you say? if you're right. >> they sell off, but not

drastically. >> so financials will rise, but the overall market -- >> overall market sideways to lower. >> but if you look at things like retail where people are employed and the economy is humming along which would be consistent with a hawkish bent. >> right. >> i don't think that's a big deal for them at all. >> all right. up next, it's a story that's got all of main street and wall street talking. mylan under fire for its massive epi-pen price hike. the ceo takes to the airwaves to defend. and from hot to not, retail getting slammed on a weak earnings report. is it the winning trade from the first half finally falling out of favor? and a chart that shows that the rally may be running out of steam. we've got it for you when "fast money" returns. >> think you're smarter than the fast tradeers? do you ever yell at them during the show and think you could do a better job? well, now's your chance.

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welcome back to "fast money." let's get right to the developing story on mylan, the stock weighing heavily on the health care space which is becoming the worst performing sector this year as mylan's ceo fights back after the uproar on the epi-pen price hike hand now managers are coming out swinging with very strong words of their own. cnbc's meg tirrell is here. >> reporter: the ceo trying to turn the focus from drug-makers and mylan to the middle man, the point of attention that hasn't been getting a lot of focus. take a listen to what she told our brian sullivan today. >> the system incentivizes higher prices on the brand, and if you don't play in the system, if you don't -- in the system that's broken today your products won't get to patients because of the lives covered by all the middle men you just talked about. >> reporter: some of the middle men include pharmacy benefits

managers clyke cvs health and the pharmaceutical trade management association responded saying mylan is simply the latest drug-maker trying to reframe a pricing problem into a coverage problem blaming payers they say for the massive price increases is a red herring and doesn't pass the laugh test with policy-makers. however, even though they are coming back swinging and we even talked with ceo steve miller the stocks of the pbms took a hit with express scripts falling 6% and you saw drug distributors including cardinal health and mckesson paul in the red. the ibb, the drug index getting hit hard as hillary clinton tweeted about this, finished 1.2% down. mel? >> thanks so much, meg tirrell. reaction on this story from texas congressman lloyd doggett. mr. representative, thanks so

much for joining us. >> thank you. >> there's a lot of fingerpointing going on in this. heather bresch is saying it's the system and the pbms is saying blaming us is a red herring. where do you place the blame? >> "fast money" is certainly the place to talk about it because mylan has gotten to the people in moy constituency who face a life and death system. it's price gouging across the pharmaceutical industry and we really do need to get at the government-approved monopolies charging monopoly price gouging prices. >> you think that there's not a deeper issue here? i'm asking you this because it's not just this drug and it seems that congress shines a bright light whenever there is an egregious example.

for example, martin shkreli comes out and valeant services shortly after that and then the epi-pen controversial, and in between there are lulls. there's not a real effort it seems to get at a root of the problem, so are you just saying that it's bad actors in the pharmaceuticals industry that are price gouging on this, or is there something systemic involved? >> i'm saying there's serious bad actors, industry practices with government-approved monopolies where competition is not working to bring about reasonable prices. this is a problem that has been going on for years. you're right. congress only takes note when some crisis like this develops. we need to overcome the tremendous number of campaign contributions and lobbying expenditures of big pharma. we need to look at all aspects of the system including the pbms but the problem is centered on pharmaceutical manufacturers that don't have effective

competition. it's not limited to mylan. it's spread all across the industry. we just saw within the last week pfizer and its acquisition of a company now pending largely over a drug that cost over $100,000 a year to treat prostate cancer. competition is not working there. the administration has not done enough and congress has sat on its hands as big pharma has kept this issue entirely off the agenda. >> sure. as you point out, it's not just mylan that's doing this. there are many. how far do you go, congressman? do you go down the list of products at various pharmaceutical companies and say this price was increased by "x" percent over this time frame, and, therefore, that warrants an investigation? mylan is not alone, so to be fair, i mean how far are you guys going to go? >> well, our prescription drug task force is trying to get this issue back on the agenda, and just as there's not one company

that's a problem but many -- there are many answers that node to be provided. i think we need, and i agreed with the mylan executive whose interview i saw on your program earlier today. i think we need more transparency. we need to have a good indication of whether these prices are related at all to research and development. frankly i find the argument that we're going to still innovation if we do something about prices, to have little merit because companies like mylan and phizers are devoting far more to advertising and promotion than they are to research and development. i think some of our larger pharmaceutical companies are really lagging in helping us get innovation and cures to diseases and responses that we need right now in our health care system, but they are charging outrageous prices. another good point that the mylan executive made that i agree with is that we're subsidizing the rest of the

world. i disagree with her that i think there's any merit in american consumers and taxpayers and premium payers having to finance the research for all of the rest of the world and pay the world's highest prices for prescription drugs. this epi-pen problem is a real one. i've talked personally with folks here in our area who are facing a crisis of whether they used an expired epi-pen, whether they can hey ford a second one for the grandparents and the like. we've got to get ahold of that problem, and i think the justice department real needs to be look at epi-pen and mylan and the agreements they negotiate with some of these schools to keep out the competition. there is a competitive product out there that people should be asking their physicians about. >> congressman, thanks so much for joining us. we appreciate it. >> thank you. >> congressman doggett joining us from texas, calling for essentially a doj investigation now of mylan. >> right. this is a special -- mylan is a

specialty pharma company. the price hikes were egregious. >> mostly a generic drug company. >> this one is really taking the wind out of the sails with, you know, for the biotechs in general but here's the problem. the root is d.c. it's washington's policy and when you look at d.c. and say all these lobbyists -- the lobbyists are the deepest pockets in d.c. are the pharma guys and big pharma lobbyists. they are the ones pushing the buttons of d.c. and getting them not to make -- essentially not allowing them or forcing not to make change. >> when you say to make it changeable, when you say it's a mylan problem? >> he said there's many bad actors out there. >> and the bad actors -- >> sounds to me like the ibb is going lower and the pfizer that i've been long forever is going lower, that united health care is going lower. it sounds to me that gilad is going over. >> senator grassley, by the way, said he would not take off the

table looking at the pbms as well. >> everything is going lower. >> so easy to say. for a politician to get up there and -- and jump on that soapbox and scream we're going to change drug pricing. >> here's the thing -- >> it doesn't matter if they actually change it! it's the rhetoric. >> correct. >> and i've been saying that all along the. the sentiment trade. how are people set up? look at hillary clinton's tweets and valuations when show tweeted out drug sghosts. >> and how long did it take to recover. >> look at just the fundamentals of the business. doesn't matter if it's a drug company or not. they sell a product that they will no longer be able to increase the price on. that's the top. their costs are staying the same. the price is staying the same and probably going lower. there is no way in this environment that any drug company is going to be able to raise prices at any significant amount. therefore, i agree with steve, they are all going lower. there's no way.

a few drug ceos are going to raise prices. >> let me ask you this one question. the hillary -- let me ask -- let me ask this one question. >> go ahead. >> after the hillary tweet, it wasn't a one-day phenomenon. the drop went one day, over time and how long did the recovery take? my question is how long did the recovery -- >> a while. >> do you want to stay in that trade right now? >> with the valuation. >> with the election around the corner. >> we saw today look -- did you see any weakness in the space today? no. >> down 2%. ibb was down 2%. >> two days ago battling over 285, 300. it's 280 today. >> the whole business plan has changed. look what happened to -- >> your trade after the election might have some bite to it, but who would want to sit in the trade for that long? >> the primary shareholders of these stocks, the guys at the big mutual fund companies, the generalists, they are out if they don't understand the story by now. they are out and gone. the guys that understand the

story, the generalists, i'm sorry, the specialists that dig deep into these stories, have their harms around this drug pricing which is exactly what it is. >> your assumption that part of the recovery we've seen in ibb has been driven by sentiment and not the generalists? >> that's what would ignite the trade to the higher levels. >> karen? >> i think about it as more a monumental change. in other industries where there's a lack of transparency and then it shifts and transparency becomes part of the equation, that normally isn't a good thing, and you have all the -- all the sentiment and that surrounding this. this seems like one of those times. they won't be able to make the margins that they have been making which seem egregious from the outside. a ridiculously good example and i can't imagine what they were thinking when they put the price

increase through hand and you know never what the catalyst is going to be. the spotlight is on the industry and i can't believe they will go back to business as sglushl when the "today" show has in its first hour a spot on epi-pen for days on end, that means it's not going away. it's in the public mindset >> exactly. >> this was an egregious price raise on the epi-pen, 100% agree. that doesn't taint all these companies. >> yes, it does. >> from raising companies. >> it has. >> and it will continue to occur. >> their business model changed. still ahead in the battle between pharma and the benefit managers is in particular to get hit harder. a trade that was lighting up the options pit today. we'll bring it to you later on. i'm melissa lee. you're watching "fast money" on cnbc, first in business wrldwide. here what else is coming up on "fast." >> no, god, no! >> a top strategist says he's

looking at one chart that shows the rally is running out of steam. we'll show you what that is. >> plus, could apple be working on its own version of a snatchchat killer? >> no way. >> hand what might it mean for the likes of facebook's instagram? julia boorstin has a special report. that's ahead on "fast." where self-proclaimed financial superstars pitch you investment opportunities. i've got a fantastic deal for you- gold! with the right pool of investors, there's a lot of money to be made. but first, investors must ask the right questions and use the smartcheck challenge to make the right decisions. you're not even registered; i'm done with you! i can...i can... savvy investors check their financial pro's background by visiting smartcheck.gov

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brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. welcome back to "fast money." the after hours downward share movement for alta does not mean the second quarter wasn't good, actually been so good for so long. the stock has gotten pretty prices. shares up 65% in six months. alta in fact continues to benefit from the need to look good at all times because of ourselfers, smartphones, media culture. sales grew more than 14% bettering expectations.

margins improved. transactions and average ticket both up. online sales grew 55%, and salon sales were up 14%. remember, those are services consumers actually have to experience in person by physically walking into the stores. their third quarter guidance is a little late but the guidance is stronger than consense just and they are raising their earnings and comp sales guidance so all in all a pretty good report and look forward from ulta. >> grasso, you were just talking about having to look good at all times. >> i mean, isn't it obvious? >> no comment. >> so go on. >> needing product to look good. >> that's fine. >> you were talking about ulta the other day. >> specialty pharma. specialty cosmetics or retail where you've seen the bullish activity going on. if you look at the department stores, when they tell you what their results were in every case cosmetics always was good, right, so this one had a gap up from about 210, gapped up to

like 224. i'm not saying rush in and buy something 64% year to date but on dips i think you're still okay. what do you think, karen? >> there's nothing wrong with what they reported except that it was priced for perfection. they came in with close to perfect for the quarter. perfect wasn't good enough, so, i mean, it's a great company. they have done an extraordinary job so the risk owe reward here doesn't seem compelling. >> dollar general and dollar tree getting absolutely crushed today after reporting disappointing same-store sales numbers. dollar general seeing its first one day drop since it went back in 2009 and dollar tree down 10%. both names weighing heavily on the broader retail trade. food deflation was a huge factor in the dollar stores. >> huge factor. that definitely took a clip on them. i was shocked to see the numbers. ultimately i think you'll see a shift. the winners in the first half maybe the losers in the second half on a relative basis and the losers in the first half, winners in the second half, dollar tree coming off. the dollar stores in general.

look at tiffany. they put up a number. all it was was about the guidance. their guidance was fine and actually better than expected and the stock ripped on earnings that were lower than expected so i look at it and say the setups in a lot of these trades are i think the ones that did really well. a lot of staples priced to perfection, people will see money come out and the dollar generals coming out, can go a little bit lower after reading the record and the ones that underperforms can win. >> i'll take it to the bigger picture because dollar general talked about the consumer in general and said they are not doing well. no trade up or down and just not doing well at all. maybe what we're starting to see is some of the rise in gas and oil prices coming into the consumer cushioning the slowdown in the first half of the year and maybe we're starting to see that now in these names. retail in general has been very lump toe dave's points. have to trade the long/short and one is doing well and the one is doing the other. wouldn't get too bearish on detail until you see amazon crack. still ahead, one firm says

now is the time to buy netflix and it's betting big on millenials to help send that stock higher. our call of the day later on. plus, bull market troubles, one firm that's keeping top strategists up at night and why he says the rally may finally be running out of steam. much more "fast money" right after this.

welcome back to "fast money." health care was the worst performing sector falling nearly 1%. the nasdaq posting its first back-to-back losses in two months. here's what's coming up in the second half of "fast money." netflix suffering after a bold call from an analyst and how high one analyst thinks the stock could go. that's later and apple could be launching its own version of snapchat next year. too little too late? a special report this hour. for those betting this bull run has legs think again. markets continue to hover around historic highs our next guest says he's looking at things that could cap stocks. julian emanuel for ubs joins us

here at the nasdaq. always good to see you. >> and you. >> what is that one chart that has you worried? >> so basically the -- the backdrop is we're at 18.3 times earnings. we -- you know which we've essentially had a tremendous one and four big volatility spikes in the last year and the vix is sitting at 13, and. expectation is that with interest rates hovering near 1.5% on the ten-year that you're going to get this move out of bonds, out of cash and into stocks. it's happened before. it certainly happened in 2000. the problem is that when we look at this chart it's actually already happened. the rotation has already occurred. the fed cause the the rotation to occurred. basically eight years of near zero interest rates gave the markets the response they were looking for. money market bounces are now at 20-year lows and allocations to stocks are at 20-year highs, so

we don't see the incremental buyer being the public like we do at other bull market peaks. >> what causes the rotation out of stocks? potentially a move higher in interest rates. >> a quarter percent increase is going to cause a rotation out of stocks that's going to end the bull market? >> we're not calling for the end of the bull market. >> okay. >> what we're calling for is a pullback kind what have we've seen on a number of occasions over the last year. this is a more uncertain environment. we've got political risk ahead in the u.s. we've got political risk in europe that people seemingly have forgotten about, that's going to come back at some point, and we're really at premium valuations, so, you know, we think something hey long the lines of a 6% to 10% pullback would actually be healthy for the markets long term >> you mentioned political risk, and i think a lot of people may be skeptical about what that risk could actually be. i'm just curious when you see what's going on with mylan and seeing the impact on the health care sector, now it's on track

to be the worst performing sector this year, do you think that people are underestimating the political risk to the markets overall? >> to the market overall, absolutely. there's no question about the fact that health care has been at the center of the storm. it's been almost a year since politicians started coming out against health care. we actually think for the intrepid and for the brave this may be a time to look at health care on the long side because you are at a valuation discount that basically already reflects a decent problemability of regulation next year. this is the kind of discount that we've only seen a couple of times in the last 25 years, but overall the market is not fully reflecting the risks out there. >> you and i need to get a cocktail. >> he should have been on that debate a little bit. >> or coffee. >> and then you would both be wrong. >> we're not wrong. >> like your commentary there. the question i have for you is you said a move in rates. i don't believe a move in rates, if we go higher in rates will actually derail the market.

i think that the banks actually perform beater and the market needs the banks to actually pull it ultimately higher. i think the question is really currency. i look at the dollar and say if japan, you know, gets devalues, which, again, that could happen at any time, that would be a hiccup that i don't think the market is prepared for. >> we like financials as well. we think they are underowned and underloved and certainly if the federal tilts hawkishly they will outperform and the issue here is the place where the money has piled into that overvalued is the defensives and you've seen in the weeks after the you can k referendum. we think there's more to go and when the momentum trade stops like that, it can be very, very violent and so you've been in this tight range in the ten-year. 150 to 160. you don't even need to break out to 2%. you need to move higher and that will unwind that train.

>> julian, thanks for coming by ubs. what do you think? >> just like he said before, it was front loaded for the negativity or positiveness going into the fed. i think that's the same thing. it's been front loaded with xlus and xlp and front loaded with gdx. i think it's already in those three spaces, and i think that no matter what happens now rates are never going to go high enough to compete with the dividends and the yield value of those three so i do think that you're going to seat market move up in those three in particular. >> karen, you've been fairly constructive on the overall markets. >> right. >> people believe the economy is doing better than what people are thinking. do you see political risk being a something that's being underpriced in the market? >> no more so than other times but i do think the markets have a huge run. volatility index which i look at a lot is not that high. i'm going to be probably looking to add protection. >> right. >> i always fall in love with things i have. >> and i always think they are priced right and other things

might be expensive and what i own is really good. in case that's not always right, good to own a little protection. >> all right. speaking of trouble for the markets. b.k. actually has a chart that he thinks could spell even bigger trouble for the market. >> well, right. this is something that dave sieberg pointed out the other day and it's the fact that you've seen a huge rally in stocks that have massive short interest, right, and what caught my eye today is there's a story talking about hedge fund redemptions, almost 56 billion. on track for 2016, the redemptions in hedge funds, to be larger than it was in 2009. that's right during the financial crisis. let's take a look at the chart here. this is a chart of the most shorted stocks in blue and the s&p 500 in orange. and you can see since july, that's when all those redemptions started, you've had this massive rally, but 14% compared to the s&p 500 which is up 7%. now why does this spell trouble? not right now but when the market sells off again, because

it's hedge fund redemption. they are out of the market. there won't be as many shorts out there to buy when the market drops down. so there will be less liquidity so if we do get a selloff like julien is talking about then you may not have the buy the dip mentality again. the money may not thereby. >> let me just push on that, b.k. >> have money coming out of the hedge funds and i accept that as a given. to the extent these are big pension fun that have a nut that they need to meet they will go into etfs or something else. that money is going back into the market. not going away. >> not necessarily. >> where is it going? >> i understand -- >> commercial real estate, could be going back into that. could be going into bonds. it could be going into several different areas. we get a minor uptick in interest rates it will go right back into bonds. big pension funds need more than what the market is giving right now and even if it's marj az-zohour nal, right, 10% or 20% that's not going back into the

market, that's still fewer buyers out there when the market sells off >> you think they want -- if you think they need more though they won't go into bonds. >> there's two different issues. do you put your equity exposure in a hedge fund or do you put it in something other than a hedge fund, an etf, for example? that's not a wholesale change of the mix to try to get to where they need to get to. >> but there is a wholesale change in the mix going on at pension funds. they are looking for larger returns, so they are looking towards commercial real estate? >> and b.k.'s point, correct me if i'm wrong, if the market does begin to sell off, the implied underlying bid to the tape, given the fact that there would be a higher short component of the hedge funds is not going to be there, and add on to that the options market, there is absolutely no protection. there's nobody really buying protection because it's been such an absolute drag on performance. therefore, it could even exacerbate lower and you can see it pull back in the market a lot deeper than people may be prepared for, and i think that's what his sbloint.

>> and what i would say about the equity allocation is if you pull it out and put it back into an etf or long only fund you've done that while they redemption has been going on. all the longs have been pushed up so perhaps that rotation also already occurred. >> thanks for that. >> yeah. one analyst making a bold call that netflix could jump 50%, but are the traders buying that? plus, apple could be making a big move to take on snap chat and instagram and can the tech giant make the switch to the social giant? much more "fast money" right after this. ah, no she's not. since when? since now. she's into tai chi. she found disc sports too stressful. hold on. let me ask you this... what's she gonna like six months from now? who do we have on aerial karate? steve. steve. steve. and alexis. uh, no. just steve. just steve. just steve. live business, powered by sap. when you run live, you run simple.

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welcome back to "fast." our call of the day on netflix. shares after william blair upped the stock to outperform putting the price target at 145 bucks, a roughly 50% jump from where it's trading at. its bear case is 1 a 10 and the bull case puts the price target at $185 a share, double where it is now. the firm says investors are underappreciating the shift that will happen with its millenial users as they age and are more likely to actually pay for the service hand not just borrow their parents or siblings' passwords here. what's interesting, too, is that the firm is very, very bullish on the net subscriber outlook

out through 2020. they are 17% above consensus right now. >> bold call. >> a bold call. >> why do you think the millenials will start? i don't understand why why that's the premise, number one. >> the same reason why you think the housing market is good. if household formation is picking up, those people moving how the of their parent's basement aren't use the parents netflix passwords. >> they don't have to be logistically in the same mouse. >> just because you do that doesn't mean everybody is. >> eventually they will have to move out of the house or kill their parents. >> or vice versa. >> the international growth story for them will be a lot tougher than i once thought it would be for them. p curate a lot of own content. >> you're skeptical? >> how about you? >> i like it. i think that's a bold call on their part. i like the story. i think the sentiment in the space or in this particular name has been beaten down a little bit so i think going into it, i don't think until november, but going into the quarter we could be surprised to the upside. last quarter they battled a lot

of things, and right now they are going through price increases, and they are not struggling with that. >> the other point cantor fitzgerald made going into the quarter is the olympics ratings were not as good as london olympics. they faced a headwind because people were watching and this time it was down and that may not hurt netflix as badly. >> my mom told me once, if you don't have anything nice to say don't say anything at all. if you believe in this call, i'm a little skeptical, if you believe in this call it's not a bad place to buy netflix. trading at $97. you know your stop out is just below 80 so you're talking about 20 bucks there. the upside is 1880, right? so you've got a 5-1 risk/reward ratio. >> if you believe the call. >> if you believe the call. >> nothing to say about your tie. >> go ahead. >> still ahead, apple could be making a move to keep up with millenials, but are they just too late to the game? a special report next and express scripts is thinking in

sympathy with mylan and why one thinks there could be more trouble ahead for the stock. we'll go into that trade coming up next on cnbc, first in business worldwide.

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money." the chief operating officer of express scripts with his take on the mylan saga and making some very interesting comments. take a listen. >> the reality is that the epi-pen you have a monopoly. when companies have a monopoly for that temporary part of time, we actually can't have the free market work. we can't pit competition against each other and drive down the price, and she's capitalizing often this. >> shares of express scripts were down 6% today kick off a fleury of bearish bets in the options pits. mike is down at the board breaking it down. >> reporter: we saw ten times the average put volume and the one option seeing the most opening buying activity was the october 70 puts paying $12.40 for those, more than 3,500 traded. the stock was a little bit higher than where it closed and that's basically a bet that express scripts going to be below 38.40 or so, 38.50 by october expiration, down 5% from the already depressed levels where it closed today.

though i would point out, you know, express scripts doesn't mention epi-pen in their annual report. mylan mentions it 20 times. i'm not sure that this is about the epi-pen and they have other problems as well including their deal with anthem. >> too early to go fishing in this area? this is an area that you know. >> right. >> it's complicated and much easier to point finger at the pharmaceutical companies as opposed to pharmacy benefit managers. >> i like cvs as a company and can't own it anymore because i don't know. we were talking about this anymore. we don't know where all the money gets paid and where the rebates go and i suspect it might be there as well. how could it not be? >> thank you, mike, for that. for more "options action" check out the full show tomorrow at 5:30 eastern time. could apple next creation send snapchat scrambling? julia boorstin joins us with all the details. julia? >> reporter: apple is reportedly developing a video-sharing and

editing app which would allow user to record video and apply filters and drawings and send video to contacts like snapchat or other social media like twitter. they are also looking at features that would consolidate all communication between users, so you could see all your texts, calls and facebook interaction with one friend in one place. apple won't comment on these reports, but this kind of investment speaks to the fact that apple's core hardware sales are slowing and apple's slowdowns come as the devices have provided the platform for the explosion of video chairing apps which apple hasn't been able to cash in. what apple is reportedly working on could be direct competition for facebook which has 1 billion daily mobile users and snapchat with 1150 million daily users spending an average of 30 minutes per day and a third of snapchaters create stories or videos every day. now, apple has already said its

new operating sis them include an upgraded messaging a with animations to help it better compete with facebook messenger. apple likely has a range of products and development and only some will make it to launch and not all of their products have succeeded. its itune linked social network called ping, that one fell flat. >> almost forgot about that one. julia, thank you. julia boorstin joining us from los angeles. does this help apple? >> no. remember the car? remember the apple car, that was really hot. i don't know where that went, the apple tv, really hot. they are a device-maker. >> series of lower highs since april of 2015. the stock to me looks like it will be a serial underperformer indefinitely. >> we are karen swisher on talking about facebook's snapchat-like product not being able to do it. if they can't do it i don't believe apple will get it right. >> services. they have to try to get services at 25% of revenues. the only thing you need to be focused on, people, the only thing with apple over the next

three years is the iphone. that's it. that's all that matters. that's where they get their margin from, and that's all that matters for the next three years. >> are you bullish or bear strategic defense initiative. >> no, i trade the stock between 100 and 125. >> all right. up next, final trades. stay tuned. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands

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welcome back to "fast money." time for some fast but not receipt of. domino's pizza one step closer to delivering pizza by drone hoping to beat the likes of amazon and google to commerce in the sky by the end of the year. they are partnering with flirty and presented this in new zealand. unfortunately, guys, not available here in the united states. oh, wait a minute. what is that out there? it's not guy. it's a drone, and it's a pizza. >> wow. >> wow. >> flying pepperoni, growing up in a sicilian house. talk about special delivery for the "fast money" team. but whoever sent it really underestimates our appetite. small for all of us, come on. >> final trade, grasso? >> dollar general, three-day rule. make sure it defends the low from today around 75 bucks, dollar gen.

>> karen? >> i want to buy protection, s&p puts. >> hawkish fed, i like bank of america. >> b.k.? >> third time is a chart. gdx. i think it's priced in. >> i'm melissa lee. see you tomorrow right here 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 some money, my job, not just to entertain but to educate and teach you. so call me at 1-800-743-cnbc or tweet me at that time