what. >> does it say to you, dennis? >> about nike? >> ath leisure. >> ath leisure is a powerful trend not to be diminished. lululemon was a good buy in 2016. >> thank you for joining us here on the show. that does it for us on "closing bell." "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. pete najarian, guy adami. nike blowing out earnings expectations but the stock sinking after hours. we'll tell why investors are running scared. and we've got dom chu at the new york stock markets monitoring. donald trump taking on not just hillary clinton, but janet yellen and in the process heighting a risk we have taken on right here on this desk. we'll explain. and later, one biotech stock could be on the verge of a major blockbuster deal.

meg tirrell will tell us who the suitors are. the dow, nas sack dak many perceive to be a strong showing for hillary clinton. so the fed at rest through december and the first debate out of the way, are we getting now the all-clear to buy stocks? guy, what do you say? >> i don't think you get the all-clear at all. i think there are so many risks out there, ex politics a tremendous amount of risks. but look how the market -- look how the s&p has held the level we have talked about for quite some time. that 2135 level, give or take. yes, it's traded below it, but effectively, it's held it, bounced each time. the transports continue to trade well. the russell iwm it continues to trade well. i am by no stretch crazy bullish at all. the risks are huge, despite the fact it closed unchanged today, still under tremendous pressure. you can't discount the fact that the s&p for whatever reason doesn't want to go down. >> seems like two of the largest factors, the unknowns, sort of a

little at bay until december. it looks like -- if hillary clinton is able to keep this going, she could be perceived as the winner, at least for now, and so therefore, two of the biggest unknowns could be put on the side. and so here's the main issue we were talking about last night on the desk. hillary is status quo, and there is really no reason to think that anything is going to get derailed. and i think the job she did last night was just enough. i know david last night was saying, well, a lot of people were expecting if trump just doesn't screw up. here's the thing. he just didn't give a whole lot of detail on policy and she did. so if you know for a fact that the november meeting, despite that consumer confidence number that was pretty good, is not live, they said it's live, the fed. it's not live. they're not going to december. if hillary continues to grab some steam here, then i think it is okay for stocks. i'm not telling you we're going to 2300 in the s&p 500 any time soon. like guy just said, the russell 2000 off the all-time highs. the nasdaq going ballistic probably going to break out. a lot of the growth stocks.

so to me, i think we're okay until we get to the election and then you probably have a sell. >> i don't think he necessarily came in and kept his head down. i think he actually lost the election. that's -- >> he lost it last night? >> look, i think he did. i don't think he contained himself as well as he could have and actually could have hit her on some pretty good points. at the end of the day, i think the street recognizes as a victory for hillary's camp. that's why we see a little bit of a relief rally. deutsche bank helping out. it's the same old narrative. the fed is basically going to be in this period where they're going to -- you know, it's going to be a long-term sort of structure as far as raising rates. the time line to normalization. and people can sit back and basically continue to own stocks here. >> yeah, i think, you know what, this is the grind. and what i mean by that, we have been sitting in this range for quite some time. whether you want to look at oil and oil down, market up. oil has been in this range. you look at where the range is for the s&p 500. guy talking about 2135 or somewhere in that range for a base.

and you look across -- the one thing i would say you guys are talking about how well hillary did last night. why is the ibb up $3 today? >> it wasn't mentioned. health care was not mentioned in the debate. >> right. but i'm not so sure we can suddenly -- i'm not on the camp where you are where you said, well, it looks like donald might have lost. i'm not so sure. i think it's early. >> i'm saying street consensus, he lost the debate. any research put out by wall street is saying. they came out still 70/30, hillary going to win the election. and it's because she came out winning last night. >> you could also look at the currency markets, the move in the mexican pesos, one of the most liquid markets in the world and what did it basically tell us? i mean, conventional thinking? that hillary clinton won that debate. >> yeah, i mean, to pete's point about the ibb, i think it's off their radar screen for now. ? why? because wells fargo and other place versus taken over. it doesn't mean it won't come back. but in the meantime, i think the ibb specifically will continue

to go higher. 22 is the line we talked about and continues to sort of levitate. and by no means do i think this election is a done deal. it's interesting, steve grasso said the winner of last night's debate will eventually win the election. it interesting to see what he has to say in the aftermath. >> it is october 9th, the next presidential debate and then we're in the heart of earnings season and i think that is going to be the focus. those combinations -- if hillary just does what she did last night and trump doesn't do what he did last night, the combination probably works well. >> speaking of earnings, we haven't brought up earnings until five minutes into the show, that's going to be the next big thing that stocks have to contend with. take a look at all of the after hours movers here. they just reported they're all sinking in the after hours session. this is -- is this a precursor to what to expect from earnings season, and does it say anything about the consumer? >> i think it says something about the consumer. the one thing we all have to recognize on the desk is this rotation we're seeing in the marketplace right now.

when i say the rotation, for a little while now, last month and a half or so since earnings season started. look at the fang stocks, how they have done over the last quarter. the chip stocks, how they have done, as well. the performance in certain areas, they're rotating out of some areas that had been performing extremely well and into other areas. now the consumer -- i'm not so sure we know exactly the temperature right now, because the competition is so much there. when we get to nike, the one thing we're going to talk about is, are they starting to lose a little bit of what they once had as the king of the street to under armor, to adidas, to some of the competition out there. not that they're getting beat, but they're losing a little bit of the market share. >> remember last quarter, nike blew up the stock, broke 50 bucks. i said buy adidas. it's up, about 30% since then. and you look at where nike is traded, right back down to the level. here's the deal. nike is an old trade. you have got to focus on adidas is taking north american market share, coming after it fast. a name you want to own. nike, i stay away from.

>> you own adidas. >> last week, we had jeffrey gundlach. there was one message he said when you were asking about stocks, what sectors. he said consumer discretionary. he kind of sees them out of gas here. >> restaurants. >> when you think about some of the stuff we saw tonight, sonic, nike consumer discretionary and pete you have a lot of beds. sealy -- >> you bring a visa mastercard. they're doing really well. obviously, they cater more to the higher-end consumer, if you will. but the spending patterns aren't dictating there is any sort of -- why are those stocks doing well? >> amazon, visa or mastercard. >> anything online. >> i don't think that's a great tell for the consumer. >> i'm not saying it's a great tell for the consumer, at all. the data suggests it's not solid for the consumer. >> we have actually said that for a long time now. it's -- just the way the consumer is spending, doesn't speak to the health of the consumer. with that said, pete -- what are you, pete? what do you call that thing?

>> twitter? >> when you go to shop on every tuesday and wednesday. pete is a maxamista. >> a maxamista he says. >> i like that pronunciation. >> i do both. >> pete is going to talk about that. i still think mastercard and visa. it doesn't speak to the health of the consumer, the changing patterns a consumer is spending. >> right. >> tj maxx are in the sweet spot. not just when things are going rough to discounters flourish. i look at these companies that they have built -- they're building, at least, the online experience, as well. so getting that world a little bit more. still very, very small. but the traffic levels it continue to be very strong across the entire sector, including burlington, ross and the rest. >> coming up, deutsche bank shares rebounded today, but one group of traders is predicting doom for the bank. we will explain. plus, shares of nike taking

a hit after hours despite blowout earnings. what gives? the conference call under way right now. and hillary clinton wasn't the only one being attacked by donald trump last night. he also gave it to fed chair jan janet yellen and may have highlighted a major risk to the market. we'll tell you what that is when "fast money" returns. yep.

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welcome back to "fast money." more bad news for the euro banks. deutsche bank shares rebounding a bit from yesterday's all-time lows. but another huge warning sign is lurking behind the stock. check out its credit default swap, cvs, bets against the company's debt. on the rise as a threat of default grows. pete, why does nobody believe deutsche bank or angela merkel? >> the problem is everybody is starting to look into this thing and wondering, how far does this stretch out and is this global? guy was talking about this earlier today, as well. whether it's deutsche bank or credit suisse, how much of the tentacles are sticking out somewhere else you're going to pull this down? the issue is, europe, we already know the different headaches going on, brexit, whatever everybody wants to pile on top. they continue to pile on top. i still think these are pretty much no touches. but if you want to touch, which

i did the other day, i bought some credit suisse calls, just on the anticipation, because there was huge call buying in there and if there is any lift from here, i think that was the only way i could play. >> credit suisse talking about the third quarter. >> third quarter challenges. it doesn't get too much worse, but it might still have a little further to go before these things can turn around. >> why is it everybody thinks there is still systemic risk to this. so many people quote, unquote, experts on the banking system. to follow this area. say there is no systemic risk. it is contained. there seems to be a disconnect on the street. >> i think the equities act that way when you're looking at the chart you have right there, still below the levels we had during the european sovereign debt crisis. i'll make one other point. if you want to go back to our playbook from 2008, 2009, what's going to come next? merkel may talk tough but maybe there is sovereign wealth fund. these are the sorts of things. this went on for months and months in '08. they were all perceived to be positives, they all made lower

lows until -- i mean, almost until 2010. >> does anyone believe she's not going to help them out if they need it? >> what i'm saying, this other thing -- >> i'm agreeing. >> it doesn't seem to pose some sort of systemic situation right now. >> i'm not suggesting -- listen, i have no idea what deutsche bank is. i'm not saying it's lehman brothers, i'm not saying it's bear it stearns. to discount it entirely, i think is -- i think it's being complacent and glib. i think there is huge systemic risk and the people you said are saying there is none, the same people, by the way, eight years ago, that said the same thing. respectfully. so i think there's -- they have a $34 trillion notional derivative book nobody has their arms around. scary. >> and their debt to equity, $161 billion in debt and $16 billion -- $16 billion in equities. this is according to larry mcdonald. >> pete nailed it. >> how about u.s. banks? >> i think there is systemic risk and i think the u.s. banks are being held back. we saw it yesterday.

i think the u.s. banks are being held back on this alone. there's uncertainty, whenever there is uncertainty in the marketplace, obviously -- >> so you're long u.s. banks and you're talking about the -- i mean -- >> some of the problems. who actually could potentially have some of the tentacles? >> so -- >> i'll tell you, the other day i actually added. i own bank of the america, the stock, bank of america calls and a huge buyer stepped in today. i bought more. so i think this is one of the names. i think the u.s. banks pretty much are out of the water. but i'm not so positive they're completely out. there still might be some issues there. i do think there is more up side coming for them, rather than down. >> next up, shares of carnival jumping 4% after the company says that zika has been a nonfactor for the cruise line. just no material impact. bookings for the first quarter in 2017 look good. >> you know what i do generally from 1:00 to 3:00 each day? >> you watch "power lunch" on cnbc. >> what else would you be doing? >> and i recall a few weeks ago, if not a month ago, the time sort of slips away.

great interview with richard fain, royal caribbean. that night on this show, we talked about, hey, folks, this stock got really cheap, really quickly on valuation, it's extraordinarily cheap, looking at a double bottom around 64 bucks. nice dividend for a play. all the bad news might be out. royal caribbean looks good. look where it is today. look at the type of day it had today. what does it mean? it means carnival cruise might have given them more air cover for the stock to continue higher. i'm not saying it's getting to 85, but could you see the levels we last saw march to april. in rcl. >> you know what happens this time of year? >> what happens. >> the temperature gets cooler. >> do you want to go on a cruise? if i said zika -- >> yeah, that was the -- the weather. >> going on a cruise. >> but anyway. is that a hypothetical question? >> what is that? >> if i were to say -- >> if i were say -- no? >> no. i just want to finish that

little conversation. >> shot. >> airlines is -- >> a competitor out there talking about the airline bookings the past six weeks being up and i said i don't know about you but i'm not flying to florida if there is a potential for zika. >> despite an earnings beat, we will hear from the ceo and traders tell you what it means for your portfolio. i'm melissa lee, you're watching "fast money" on cnbc, first in business worldwide. in the meantime, here's what else is coming up on "fast." >> let's make a deal! >> that's what many traders think gillian will do. one top analyst says stay away. the man behind that call is here. and we'll explain why. plus -- >> we are in a big, fat, ugly bubble. and we better be awfully careful. and we have a fed that's doing political things. >> ah. ♪ ♪ blowing bubbles

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welcome back to "fast money." of oil prices in the post market after a data shows a dropped in inventories last week. energy one of the worst performing sectors. dan made it over to the smart board with more. dan. >> i was in the energy select etf, 40% of the etf is exxon, chevron and schlumberger, and today 3% on the morning, a seller of january 75 calls in the xle.

30,000 of them were sold to close at 43 cents. 45,000 ended up trading on the day, like mel said, likely a prior bull, closing out of that position. with crude oil kind of getting left behind here a little bit. i just want to make a point. exxon is a massive component of the xle, really underperformed, down from just above 95 -- about 13%, just in the last couple months alone here. but look at the xle. it's actually been in this consolidation between 65 and 70. it's got some really good support at 65 here, so it's showing good relative strength to the moving crew, to the move in one of its biggest components. but 65 is kind of a big level here for some of you guys looking at the bottom. but this is a chart going back to 2008. i just want to make one point. look how oil bottomed. it took a long time. at least the stocks in the energy patch there. we had the v-bottom this time. had this consolidation i just showed you on the bigger chart here. and obviously, there's a big air pocket here, or we can have a

move to the up side. but the trend continues to be down. for some of you guys, pete involved in the xle. maybe it's worth taking a shot in the xle down toward 65, maybe to find your risk, use some calls or call spreads to the up shot option prices and call volatility cheap there. this person closing out, possibly looking into something closer to the money. >> today we also had goldman sachs slashing its fourth quarter oil forecast to $43, basically where we are right now. what's -- i mean, would you -- >> what sticks out to me. i do think -- i do think oil is in the midst of this next leg lower. and pete can speak to the ovx. that has been elevated for quite some time. it did go lower today, but it's still, i think, around 44, which historically is very rich, which to me indicates oil goes down real quick. schlumberger. look at the chart. that made an all-time high in the middle of 2014. it's had a remarkable year this year. but i think on valuation and the

environment we're in, schlumberger is way too rich. >> i agree. i think we trade the range. oh 40/50 is the range. yesterday we saw a lot of short covering. we talked about it. hes, one of the biggest names in the space was covered. you know, today we saw it come back a little bit, give back a little more. i think that stock is going to go a lot lower. >> where do you go on oil, pete? >> one thing we have seen and dan has been watching the same stuff i'm watching. we looked at implied volatilities all of the time and the 11 to 13 range and when we get higher, 15, 18, sellers come in. what happened in the last couple days when we were a little bit higher? they came in and started selling. whenever they can get any kind of volatility, they sell it. it's still high in certain areas. yes, the xle is a little bit pulled back now but seems to me there are sellers just trying to collect premium. so i don't know necessarily that i would consider that to be is something right now where it's a negative. i think they're just trying to take advantage of volatilities,

implied volatilities. >> for more "options action," 5:30 eastern time on friday. still ahead, presidential nominee donald trump calling out the fed and janet yellen. do the traders agree with what he said? and shares of gilead down 20% this year. one analyst giving up on the stock. he'll tell us what has got him turning bearish later this hour. much more "fast money" still ahead. 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.

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welcome back to "fast money." a two-day losing streak. technology, the biggest gainer as the sector closed higher by more than 1%. here's what's coming up. check out shares of nike moving off the after hours session low right now. the conference call under way. plus, facebook ceo passing a milestone.

she sits down with julia boorstin. first, republican presidential nominee, donald trump, calling out the fed for doing, quote, political things. have a listen. >> believe me, we're in a bubble right now. and the only thing that looks good is the stock market, but if you raise interest rates even a little bit, that's going to come crashing down. we are in a big fat ugly bubble. and we better be awfully careful. and we have a fed that's doing political things. when they raise interest rates, you're going to see some very bad things happen. because the fed is not doing their job. the fed is being more political than secretary clinton. >> a lot to unpack there. is what the fed is doing being driven by politics? >> personally, i don't think so, no. i might be the only person that doesn't think so. but i don't think it's driven by politics. i think it's driven by the fear that they have pated themselves into this considrner. and i think that's a problem. and the fact that other central banks around the world are

acting in kind just makes it that much more difficult on them. is it for politics? no, i don't think it is. is it because they're frightened of what they don't know? the fear of the unknown is what's keeping it from raising. >> so show of hands. is the fed being political in how they decide the course of interest rates? okay so nobody thinks that. is the fed doing a good job? in what they're doing with interest rates? raise your hands. >> yeah -- >> all right, okay. well, that's -- two separate issues. >> i actually think the fed is being very political by not raising in september. and by not raising in november. i don't think that there's anybody within the fed that wants to be on the hook for giving donald trump an assist into the white house. and if they had raised in september and had surprise or did it six days before the election, and had surprise. and the stock market that he says is a bubble declined quickly, 5, 6, 7% or something like that, that would certainly help donald trump. >> so we are basically saying that he is right in his assessment of when the fed raises rates and the impact on the stock market.

>> i disagree. >> what he said was, he said very clearly that even if the fed raises rates just a little bit, the market is going to come crashing down. i completely disagree with. a 25-basis move isn't going to crash this market, people. the fact that we get to a more nourmlized path -- >> what's your definition of crash? >> a crash would be 20% or more. we're not going to crash off a 25 point basis move in interest rates. >> i think it does come down to fear. i don't think it's necessarily political but i agree with you. as you get closer and closer to the election, we have to recognize, they don't want to have to influence it positively or negatively. i think they feel this is a time to be on the sidelines. the problem with the fed has been for all the years that they have been pausing, and we have had data, we have had things that they have been -- they have had the excuse to raise in the past, and they haven't done it. and that's the problem. >> two things. this is really important. why i disagree. if donald trump were to win on november 8th and then the fed did go on december 14th and raise, then i think we would have a lot of volatility, because then all of a sudden

then every meeting is live and we have all of this uncertainty. so i think that could be a very dicey owe. >> what makes a difference if donald trump wins and november and the fed raises rates in december. you think if donald trump does not win and the market raises race -- >> when you think about it, we're going -- an entire new treasury, he's going to be building this transition. that is uncertainty in and of it itself. every day, i guarantee you guys in december or january, we're going to be -- there's going to be headlines about this person is going to be -- that stuff is going to move markets, you know. elizabeth warren's name popped up there. you think that would be something people would freak out about? i think it's going to be volatile in december no matter who wins. >> true or not, if he were to win and they were to raise in december, he will go to town on the fact that look at what the fed -- look at what the politically motivated fed did, i was just elected president, they're raising rates and effectively my first few months in office and he'll have a field

day with that. in that aspect -- i've got to give him the benefit of the doubt and say politics doesn't factor into this. >> for more on the fireworks from last night's debate, let's bring in morgan stanley, managing director, former u.s. representative, howard ford jr. great to see you. >> thanks for having me. good evening. >> so do you agree with mr. trump's assessment in terms of when the fed does raise rates, the markets will come crashing down? >> look, i'm a hillary clinton supporter. i thought last night, a couple things happened. first, i thought she did better. two, i'm not convinced that enough people whom were supporters of secretary clinton or mr. trump were moved. she was to drive upturnout by outlining for independents and other voters, young voters and even african-american and latino voters. why this election is so important, when mr. trump was asked about race relations and he immediately switched to law and order and stop and frisk. when he was asked to release his

taxes and he joked about how he didn't pay taxes. i was even hoping secretary clinton might is ask him more. we have people every day, be it accountants, dishwashers, if they chose not to pay taxes, they would invite irs scrutiny. evidently mr. trump is under an audit as we speak. as the debate wore on, i thought she did much better. i think early on in the debate, the first 20, 25 minutes, i thought mr. trump served himself well. but the remaining hours, they got into more substance, he took more bait. and i think he opened himself up for many of the criticisms, rightfully so, that she is levelled at him throughout the campaign. >> i'm going to ask the question again, harold. what do you think the fed's easy money policy has been, what the impact has been on the stock market, are we at a point where there is or can be perceived a bubble in the stock market so that when the fed does raise rates, it will have a negative impact on stocks. >> i think the fed follows data. so i listened to your earlier conversation and i think some

fair points were made. i think ultimately the fed is going to make a decision based on the data. >> all right. given secretary clinton's stance on banks, i'm wondering from your perspective, working at morgan stanley, is there a concern there will be increased regulation, particularly when it comes to financials? >> i don't speak for morgan stanley's position. on these issues. i think that my broader concerns are really her positions on taxes, her position on infrastructure, her position on foreign policy. and i think for a lot of americans, including myself, one of the things that's most unsettling and unnerving about mr. trump is really his all over the place positions on national security and foreign policy and the coziness that he doesn't seem to run away from when we talk about vladimir putin. now when we talk about the economy and his positions, i think there has been a complete absence of specifics around the kind of things he would do. things will get great, i will be tough with people, i will take on people, i will undo trade deals, i will renegotiate trade

deals. i think all of that is interesting language and fun language and i listened to him last night. we hear politicians say what secretary clinton is saying over and over again. when people like mr. trump make the cases he tried to do last night, one of the reasons he found himself coming up on the losing end last night, he didn't provide the kind of specifics and it didn't provide the kind of preparation i think he needed to have for a serious debate last night. >> in your view, harold, is it a slam dunk that clinton wins? or the road is too long still to november? >> we've got two more debates. we've got, you know, several weeks left. a lot of things can transpire in this race. a lot of outside events can occur. as the clinton supporter and other clinton supporters, certainly we're relieved last night and encouraged by the candidates' performance. for anyone, i would caution people in the campaign. i heard this morning secretary clinton's trip to north carolina today was viewed as a victory lap. there is no such thing as a victory lap before the race is over.

i would hope there should be some excitement about last night and deserved excitement. but the reality is, there is a long way to go here. and last night was a critical step in getting closer to winning. >> harold, thanks for your time. good to see you. >> thanks for having me. >> harold ford jr. >> he should run! he should run! >> oh, well -- >> he would be great. >> he should do it again. >> could be. >> throw your hat in the ring. i don't know what that means, but throw it right in there. >> to answer your question about the fed, he did say it's a data-dependent fed. they keep telling us that. >> and apolitical. >> correct. and i just want to make one point. the economic data has been kind of dicey, right? it's been two ways over the last couple months and that's the reasons why they gave for not going in september. obviously, they didn't say anything about the election. but they don't want to raise into a weakening economy. and that's some of the data we got after the august jobs data and stuff like that. so to me, it did make sense to be prudent with the uncertainty in the next two months. >> i think you're right. the uncertainty that could be caused, you're suggesting could cause volatility.

and in general, that is the question. so what's the -- what is going to happen if trump gets elected? you're going to see rates move. what's going to happen if clinton gets elected? rates are going to move. the question is, what's going to happen to the rhetoric in the garbage that comes out of trump's mouth during that scenario that scarce and spooks the market. >> you know, pete is in agreement with me on this. accept that the day they are dependent upon -- >> changes! >> changes! every time it reaches their milestone, they change is. so they're not data-dependent. >> and we're sitting there thinking about -- >> yeah. >> but it is interesting. because every time we think we have a handle on -- you know what, they're going to go for this reason. whether it goes to march, he starts pushing to june, then september. the data that they said always seems to change and we never really get the answers. so back to your point about the political side of it, now it does become political, because you're getting closer and closer to the election. >> all right. up next, gilead shares falling 2% today after one of the most bullish analysts on wall street downgraded the stock.

what has him jumping ship. plus, nike shares getting volatility in the after hours. headlines moving the stock. much more "fast money" right after this. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses.

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one of the most bullish analysts on the street downgraded the stock and said the phrma company is facing big trouble in the help c case. meg terrill is here. this is what happens when you create a drug that cures a disease, the revenues start to fall off. >> yes, it's kind of an interesting paradox, getting punished for curing people. we talked about this last week. gilead under pressure. if you look at the way it's performed this year. underperforming not just the broader market but also the ibb, which obviously has had a really tough year. gilead down more than 20%. a tough year and a lot being attributed to the sort of leveling off or even the decline in hepatitis c revenue. if you look here at the last few years of, they're just gigantic hepatitis c franchise. 2014, more than $1 billion. 2015, $19 billion. you can see it has started to come down. in addition to that, competition in the space is heating up. you have not just abv who we know has been on the scene. merck with new combinations and

johnson & johnson. so just making it harder for gilead to maintain that market share. on the flip side of this, though, they have gigantic hoards of cash, up to $30 billion. so people speculating what are they going to buy, are they going to buy something and is it too late. that's what you're hearing about with this downgrade today, was going to happen with gilead, can they buy anything that will change the deal. >> stick around, meg. we want to bring in the analysts. jeffy borges, the man behind this call. joins us now. great to have you with us. >> thanks for having me. >> we knew about the cliff that gilead would see, because of help c revenues. but there is one stat in your report that is shocking. from the 2015 peaks, revenues down 90%. is that worse than originally forecast? did that downward trajectory steepen in the past few months or weeks? >> yeah, look. we've been following this very closely. we've been following the hepatitis c category for the

better part of a decade. and in the past few months, we have seen an acceleration in some negative trends. first, patient volume is slowing. that means that the number of people who are infected with hepatitis c who are presenting for treatment is slowing down, and, of course, this is a cure market so you have to replace that population virtually every month. the second thing is prices coming down in the face of competition, we're already at a gross to net greater than 50% and that will increase on a quarter by quarter and year by year basis going forward with more combination. third, duration going down. when they first introduced their products, treating patients on a 12, sometimes even 24-week basis. now the duration of therapy is coming down 8 to 10 weeks, could go gown to 6 weeks. and lastly, losing share. with merck on the market and better regiments coming from them, that share slide is going to continue. so it's very hard for hem them to even maintain revenue, let

alone avoid erosion. >> so certainly a lot of cash they could deploy. what sort of acquisition would you like it to make, what could really solve this pipeline issue? >> yes, we have been waiting for about 18 months for gilead to bite the bullet and do a substantial acquisition. we have written pieces suggesting large companies that might be suitable merger partners. we have talked to the company repeatedly about it, as have many investors. and the frustration that the investor community feels is that they seem more inclined to do the small tuck-in acquisitions they have done historically. this company has done 17 acquisitio acquisitions. the average size 1 to $2 billion. the largest $10 billion. unfortunately, when you're $100 billion company, a $10 billion transaction doesn't move the needle. we think they need to be looking at 30 to $40 billion investments to offset this erosion that we have talked about. >> jeff, at the same time -- this is meg tirrell, by the way. the acquisitions that gilead has

done that made it so successful. getting the hcv franchise, what is the third thing they need to get an anchor acquisition in to create a whole new franchise? where do you see them going next? >> yeah, you're exactly right, meg. there are two acquisitions have been the foundation of this company's success. and we keep hoping that there will be another magic solution. in all probability, there isn't another cornerstone acquisition. they'll have to invest in a whole franchise. now, whether they do something like, for example, vortex, invest in cystic my fibrosis, get involved in rare diseases or something like insight. but those are the magnificent we think they need to be contemplating. and frankly, my fear is they're going to do much smaller lest they have in the past. >> his downgrade of gilead today. you follow this very closely. >> this has become a value stock

right now. $78 a share. all they need to do is a few tuck-in acquisitions. >> he said it's not going to move the needle. >> they bought one more company. they do it properly -- >> why is pfizer different from gilead? >> sentiment, as well. once they go out and start to make a tring, it's going to change sentiment in the stock and you'll see it move. >> megan. >> i would push back and ask, what do you make of the amgen data, very similar to pfizer. you're buying one major drug. but sometimes these things really don't work out and you end up paying $9 billion for them. >> i get -- i look at it as a sentiment sort of structure where you look at people have been super frustrated. the stock is down $78 a share. i mean, it's gotten to a point where a value investor should step in and buy the stock. they breathe acquisition. it's $100, in my opinion. it's going to -- >> i've got one for you. sorry to jump in. what about valuiant? this is a $9 billion market cap. >> gilead bought valiant, would

go higher? you think it would reverse the 20% decline? >> it is $100 billion company with $30 billion expected sales in a $9 billion market cap. i was going to get there. what i'm saying is, you know -- >> laughing at you. >> i'm laughing with him. but i'm laughing. >> so diplomatic. that meg terrill. >> somebody is going to buy valiant. >> somebody. >> but it's going to cost more than what you're projecting it to be right now, just based upon the debt, right? it's not the number you're saying -- >> i said market cap. >> thank you, meg. meg tirrell. still ahead, facebook surging after the company surpassed 4 million advertisers and sand berg says that's the tip of the iceberg. what she told julia boorstin. and shares of nike, the company conference call just finishing up. we'll bring you all the details. you're watching "fast money" on cnbc. first in business worldwide.

welcome back to "fast money." what we've got right now is the earnings conference call for nike, just getting into the q & a period a few moments ago. the stock has recovered a little bit of its losses during the progression of the conference call. in it, ceo and chairman, mark parker, talked a little bit about the idea that there are

positives ahead for nike, and that he emphasized the growth picture there is strong. take a listen to what he said earlier on the call. >> it's a great time to be in the business of sports, and as the market leader, this is a great time to be nike. we are on the front end of all this growth. a driving force behind the expanding market. we not only see the up side across the landscape, we have both the scale and the skill to act on it. >> all right. they also talk a little bit about the profit margin picture for them. they did say that profit margins fell year over year in this past quarter, and it could continue a little bit weaker into the current quarter that we're in, driven primarily by a different scales, more off price items, even though they have an average selling price higher than last year. they're getting rid of the golf equipment business so a couple things structurally at play right now, melissa. but still, the stock we're watching heavier volume, but still well -- a little off its

lows for the after market session, guys. back over to you. >> thanks,dom. the latest on nike here. you said you don't like it. >> i would rather buy adidas here. you just mentioned off-price stock or inventory? i mean, you look at adidas last year. a year ago, talking about the highest-price sneakers having absolutely zero pricing impact. i mean, it's crazy. >> so the growth margin missed obviously because of the off-price stuff and the tax rate really, really low. that's where that big -- so this is one that to me i'm a little skeptical. >> so the quality of the beat -- wasn't good, plus the current quarter. >> so i would look at the it at 50 bucks. >> here, would you rather. >> i like this game. >> i know you do. that's why i'm not going to ask you. i'm going to ask pete. julia boorstin, by the way, waiting. under armour or nike. >> nike. >> really? >> under those circumstances. adidas or nike, i take adidas. foot locker or nike. >> now you're playing your own would you rather. >> a whole -- forensic asay.

>> you don't want to play, i'm going to move on. >> half a dozen and the other. they've got a nike product. 85% of their sales is in nike brand. so i -- adidas. >> just because you don't want to play doesn't mean i can't find someone. let's move on to facebook now. the stock recovering today in the wake of last week's video metric mishap. the aforementioned julia boorstin sat down with sheryl sandberg and joins us live and in person at the nasdaq market site. great to see you. >> so great to be here in person. great to see you guys. sheryl sandberg apologized for the overstatement of the duration of average video views, and she said that facebook is working with a range of independent companies to make sure it never happens again. >> we certainly do all we can to get all our metrics right. and really work on measurement. most important thing to our clients is that we measure all

the way through to sales. when you think about what advertisers have looked for and measured, what they have always looked for is who sees their ads, how are they spending their ad budgets and then is that moving products off shelves, is that driving cars off lots. >> up against more competition and tough comparisons, sandberg announced a advertiser mile style as they work with more businesses. >> we're announcing today that facebook hit 4 million advertisers up from 3 million advertisers in march. and i think that's because businesses know that consumers are spending time on mobile and they need to be there. so everything from our largest clients to the smallest mom and pop business are trying to reach people on mobile. >> though facebook isn't making any money yet from its big investment in live video, she says there is potential down the line. >> what's happening with live on facebook is really exciting. we're not yet focused on mondayization. we're doing some early tests with ad breaks. but we're really focused on the experience. so last night in the debates

alone, there were over 55 million facebook live shares of some kind or another, whether that was people watching part of the debate or journalists or just everyday citizens commenting on the debate. but doing it in a live format, which we think is an incredibly strong social experience. >> sandberg says they're also working on how to make money from facebook messenger, as well as what's app but they have no plans to spinoff those apps and, of course, you can find more from my interview with sandberg on cnbc.com. melissa? >> what's so striking, talking about facebook live, after two successful streaming events on twitter for the nfl and last night also or the debates, according to analysts, i'm curious, what's the perception of facebook live versus what twitter has under way in convenientlying. >> it's different in the fact that facebook doesn't have sports rights. facebook is working with different celebrities, media brands and really trying to encourage them to broadcast live. twitter is really more going after the mass yiive stuff like

the nfl and working with lesion. so i think they're taking a different approach. i asked her if she was interested in buying twitter, she said no comment. and it doesn't seem to be one of the leading contenders as a twitter buyer. but she also said that it didn't make any indication that she was interested in going after sports rights. >> so let me ask you this. the biggest issue for facebook, look at her, she's probably one of the smoothest operators in fact world. one of the largest companies in the world. is she going to get picked off as a ceo. she's got to go smarp sharper than 90%. >> i asked her that a million times. there is a lot of room to grow facebook, starting to make money, so i think there would be reason for her to stay. >> julia, thanks for coming by. all the way from l.a. jb in the house. next, "final trade." stay tuned. this man creates so, used by this bank, to protect this customer, who lives here and flies to hong kong, to visit this company that makes smart phones, used by this vice president,

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your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. final trade. pete. >> i know it's a tough time to do it, but i'm going to the banks. bank of america, the huge paper in there. this thing is going up. giddyup. >> david. >> i'm going to be a value invester tonight and buy gilead. 48 bucks a share. it's going higher. >> take that, jeffrey borges. dan? >> costco would not be a buyer until 140. >> guy adami. >> time captain stubing it.

on the way out. ♪ love, exciting and new >> i'm melissa lee. see you back here tomorrow for more fast. . my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a little work and i promise to help you find it. "mad money" start now. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. people want it make friend, i just want to make you money. so call me at 1-800-743-cnbc or tweet me @jimcramer. does faaa have a long way