you're living to hang out with the angora rabbits, i have to see this. >> maybe 10th century technology. >> thanks for joining us this afternoon, much appreciate it. that does it for "closing bell." "fast money" begins right now. "fast money" starts right now. live from the nasdaq markets overlooking new york city's times square, i'm melissa lee. tonight on "fast," despite today's reversal, top technicians say the s&p is, quote unquote, broken and you need to take profits right now. plus u.s. representative gregory meeks called john stumpf a criminal on capitol hill. tim sloan will be here to explain. dan niles says there's one stock every investor needs to own now. he'll tell us what that is. first, we start off with the market come back.

the s&p and dow end the day near session highs. it started with two names that reported earnings this morning, delta missing on revenue, that stock rallying 2% after a tough open. then take a look at marriott, down sharply, recovering all of its losses and ending the day higher. is the message to the market to buy stocks into earnings? guy? >> the message to the market is this 2134 level is critical. you mentioned two stocks. for me, i thought the stock that really turned everything was, look at the way deutsche bank opened on lows and racheted back. if you overlaid the s&p chart with deutsche bank, you see what's going on. deutsche bank still to me is a concern. the fact that the s&p still bounces off this level is i think good. the other thing that concerns me as well is the weakness in the russell is starting to get noticeable. we've failed seemingly again at the 128 level. if iwm gets into the mid-teens,

then i think you really have to be concerned that this s&p, which has been holding out for a while could break down. >> you have to watch the banks, right? yes, they all came back, deutsche bank came back. but they were still down significantly, one of the worst performing sectors of the day. now we have earnings coming tomorrow morning for multiple of these. that to me is the key sector to watch. it could break down here. a lot of the so-called feds going to be raising rates in this rate hiking cycle, probably the wind got taken out of it today, because of the china data. to me, i think the banks are a sell here. >> i don't think you're doing anything differently tomorrow or the next three weeks than you'll do tomorrow or the next three months. what we got from delta today is a company whose expectations in terms of their discipline and capacity is expected to come back. they are not well-run companies. that's not true. they're priced for recession.

if you look at the autos, they're priced for auto sales to be down 2 or 3,000 next year. you have to find the stocks that made the most sense. the market these guys are talking about is the same market with the same dynamics, whether it's china, or the dollar, the fed, whether rates are up and down. i think tomorrow's banks, i disagree with brian, i think yes, today is a regulatory target on their backs. i look at pristine balance sheets, all relative, of course, and earnings power that i think is getting better at a time when these banks have made money in a bad environment. >> on the airlines, i thought the delta call, what they put out today, it was showing some discipline in the industry, which is good for all of them, why they all traded up, and improvement over the course of the quarter, which was very good. they had that very specific issue of severe outages. that was a drag for them, no pun intended. >> we had to wait on that one.

>> i was flying today, it was great. >> awful. >> getting worse and worse. the banks, i think, god, this is one day, it's one day. tomorrow we'll have so much more data about the banks. so many of them, actually, jpmorgan, wells fargo, which will be a messy quarter for a lot of reasons. citibank also tomorrow. i think that the underwriting business started to pick up, it's definitely a good thing for them. they got a little lucky at the end of last year with the trading debt so high from brexit for the last few days of the quarter. that will probably reverse somewhat. i like the valuation of the banks here. >> it's important, delta did have a really interesting today, opened lower, traded higher. the call was pretty good. i thought what happened here is, here is a stock that sold off pretty significantly since the beginning of the year. here is a quarter that came in okay. then people said, wait a second, delta is trading 7 1/2 times

forward earnings and people caught on to the fact that, you know, maybe if delta has their act together, the stock has sold off enough where we could take a shot here. a lot of that had to do with the rally we saw throughout the day. >> are there any stocks or sectors you would be looking to possibly buy into earnings? >> i would look at stuff like the agriculture sector, you have a nice risk/reward there. i still like the dollar, that's not a sector but i think that is going to do fairly well. i would stay away from gold at this point in time. i would rather just see this earnings season play out. i don't think you have to kill yourself. we're now 16 months of the s&p going nowhere. we're up about a third of a percent for the last 16 months. there's no hurry to buy anything. frankly there's no hurry to sell anything. breaking news out of washington. >> treasury secretary jack lew

has issued new rules. interestingly, on a conference call with reporters just a little bit while ago, treasury secretary lew highlighted the fact there are three areas where you can consider these rules a little bit looser than what they had proposed initially. i'll read you those three. one is, treasury is providing a broad exemption for cash pools and loans that are short term in both form and substance. two is they say treasury is providing certain exceptions for foreign subsidiaries of u.s. multi-national corporations, pass through businesses and regulated financial institutions. the third one, they say they've relaxed the timing on documentation requirements and extended the deadline by one year to give companies additional time to develop processes to comply. behind the scene you can imagine there was a big fight between corporate america and treasury over just how these regulations would be rolled out. treasury saying now it's been responsive to the comments from the business community. we'll wait and see how the

business community reacts to these new rules. but you should know that they've been opposed to them. they wanted treasury to roll this thing back entirely. treasury said no, we need to go after these tax inversions because of techniques that allow companies to take advantage of their tax inversions. >> amon, thank you, with breaking news from the treasury department. does this really change anything? i would think most companies at this point are probably pulling back on thoughts of inverting. even just for the optics of it. >> the optics, and the regulatory. all the issues facing them right now. no clarity yet. we'll have more clarity very shortly on the election. >> right. >> look, we've already -- since we unwound a couple on the back of this, especially when there are heavy breakup fees involved, i think they're doing a good job of keeping people on hold. let's get back to the markets. our next guest says the s&p 500 is broken. let's check in with carter to

find out why. >> it sure seems broken, not only in terms of having no results for many months, but just the day-to-day action. here is a chart. it's a one-year chart. you can see a lot of things. my eye sees this. put 'em on, take 'em back. put 'em on, take 'em back. meaning we have a well-defined trend. that's your treasury low. that's your brexit low to the penny. we have violated this trend line. does this mean a crash? no. everyone was playing for this, breaking out. it's not breaking out. it's breaking down. take the lines away, put them back. not a great setup. let's pull it back even further. now, this is the thing that's cited, this so-called breakout. if you're going to break out, here's the line. you're supposed to break out. you can revisit once and then do it. but now we've revisited a second time. we're underneath the breakout point, meaning the breakout is

looking an awful lot like a failed breakout, a head fake. okay. just talking about the risk of the consult of equity. this is going back to the prior high. 18 months. if you had a choice, checking off boxes, if you were a pedestrian adviser and saying i'm not recommend stocks, bond, gold oreg real estate, the sing worst thing you could have done is picked the stock box. that's just on an absolute basis. what if we adjust for risk, reward for volatility? drawdown of 10%, 12%. yet still with that, underperforming bonds, gold, real estate. bad bet. okay. let's talk about long term chart, blue is your market, orange is your earnings. that's your dot-com bubble. we gave it all back. stocks maybe get a little bit ahead of themselves. seven, then we give it back. then we undershoot. they were cheap in '09. here we are again, the

relationship between earnings per share and price per share, blue line too far above the arran orange line. all this smells to me like, why buy? which means sell. >> shall we bring carter over? >> i would love to have carter. there's all kinds of crazy news. bring him over. >> welcome. >> i come over to the bull corner. >> in terms of which sectors look the most vulnerable within that? >> that's part of the problem here. they're almost all vulnerable. we've lost our leadership, started to see rolling in staples and telco and utilities, which were holding it up as consumers were flagging. >> the uptick in technology isn't stalling that? >> to some extent. we are so dependent on a few big names, amazon and facebook and

google and so forth. if there's any faltering there, what are we going to hang our hat on? >> if in fact this does happen, where do you see the next level of support? >> what used to be normal, right, is corrections, dips, givebacks, pullback. it's 6%, it's 8%, it's 10. we haven't had one of those in quite some time. we're due. >> what's quite some time? january, february? >> yeah, that counts. that was pretty aggressive. >> the problem with what you're saying is the same i think problem with the conversation we might have had six months ago, which is the time horizon on this call is challenging. so there's no disputing that there are -- first of all, you're talking more technicals. i'll chime in and say the fundamentals are challenging. we're receive these for six to nine months. what's the catalyst to take the s&p below 200 when we've had multiple chances to test that?

maybe we haven't broken out, but we're still 50 points above the old s&p highs. >> i think that's the heart and soul of it. you're not being compensated for the risk of owning equities as an asset class. you keep getting these drawdowns, only to climb back to where you were, only to get pushed down again. no one has successfully caught these. i bought in february, i sold. we're running right now at the worst trailing three-month results on record. it's untradable. no one caught the february low. they did it if they got 50 bucks in their pocket. no one with any real money did that. it's academic. equities are not a good bet. >> carter worth, thank you. coming up, john simptumpf i officially out at wells fargo. one of the bank's biggest critics will be here to tell us if congress will go after the new ceo. disney releasing a new trailer for "star wars rogue 1."

will it be enough to help the stock? later, dan niles says there's one stock investors must own now. more "fast money" after this. experience the thrill of the lexus is f sport. because the ultimate expression of power, is control. this is the pursuit of perfection.

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welcome back to "fast money." disney releasing a trailer for "rogue one," a "star wars" film. it's the first standalone film of the franchise. with disney shares down more than 13% this year and trading now at an eight-month low, could this be enough to save the struggling stock? guy, what do you say? >> i don't think so. we've been pretty steadfast in that belief for quite some time. a lot of people who love disney will tell you what a great franchise it is. i agree with all that. the problem is the entire space is getting racheted down and disney is getting caught up in that. they clearly have problems, we find out last summer when espn stock was trading 120. now we're at a 90 handle. we made 86 and change a couple of months ago. >> i'll say about disney, though, the valuation is cheap to the s&p. to me, this is a premium company

that pays you a dividend, that's seen exceptional growth in a difficult environment on the media side. the parks are going gangbusters. there's a nice offset. can i own disney? yeah. do i need to? probably not. bob iger could have something to say that's going to manage expectations in a way that's probably not terrible but is not going to help the stock price. >> a sector issue or a disney issue? >> i agree with tim. "star wars" cannot be one's reason to own disney. we've seen it so many times, stocks run up, it's buy the rumor, sell the news, almost every time. >> sector or disney issue? >> a little bit of both. until disney particularly addresses what's going on with espn, it's a tough buy. dave cotte sat down with jim cramer. what did he tell him? jim cramer will be here to

explain. here's what else is coming up on "fast." >> you, ceo, chairman, on top of what's basically been a criminal enterprise. don't come telling me you're sorry. >> announcer: that was u.s. representative gregg meeks calling out former wells fargo ceo john stumpf. what does the congressman say the bank needs to do now? he'll be here to explain. plus dan niles says there's only one stock you need to own. and he'll tell us what it is, when "fast money" returns. those, you know. he ran that company. i geit. but you know i tnk you own too much. gotta manage your risk. an honest opinion is how edward jones makes sense of investing.

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call now to request your free decision guide. welcome back to "fast money." a news alert on honeywell, the company releasing its 8-k in the

last 20 minutes. jim cramer just spoke to the company's ceo. jim, what was the big headline for this interview? >> melissa, frankly it's a bit of a do over versus the analysts meeting at the beginning of the month that knocked the stock down $10. take a look at what dan cotte said to me. >> i was wrong. i could have done a significantly better job of communicating this story. and we tried to do it in the context of 2017 is going to be good. it seemed to get totally lost. >> i got to tell you, basically if he had to do it over again, he would have put it what was said tonight. it's dramatic, longer term view that does clarify a lot of what people felt was genuine weakness on the part of honeywell. that does not seem to be the case. >> so the notion that short order cycles were challenged, there is a weakness in aerospace and defense, all of that is in question now, so the results will be much stronger? >> i think that what -- the

organic growth decline is still very much with the company. that's not changed. but the 2017 outlook is far more bullish than what happened at the beginning of october. also there was a lot more about how the company may be undervalued versus its peers given the fact that 2017 is looking pretty good because of some portfolio shufflinshufflin. there was not much description about what looked good in 2017 in that first analyst presentation. including the idea that perhaps aerospace was in a longer term down trend. that is exactly i would say contradicted by the presentation that was put out tonight, which is why i think the stock will have a big move again tomorrow. >> jim, i've been a huge honeywell fan for a while. juxtapose that with what we heard out of dover, united technologies, ppg, some of these other huge industrials that have made similar comments to what honeywell made prior to the comments tonight. >> that's a great point. you could add alcoa too to the

mix. what david cotte is doing is switching more to a software model, less of a hardware model. what he's add to go aerospace in 2017 should make it so it will not be as bad as the company that makes the fans for an engine, not bad as the company that makes the fasteners for an airplane. what's really important is that he talked up the turbo story, the auto story, which is very, very strong. i think he was very much lumped in by his own comments with the dover situation, with the ppg, with alcoa. but when you go through what was filed tonight, the documents filed tonight, you say, wait a second, they reshuffled this portfolio where they have a clear path to up numbers in 2017. i don't feel that way about a lot of the other companies that are mired in aerospace. >> this is a real shocker, jim, considering the market reaction to the initial presentation. what was your reaction when you first heard it? it almost sounds like the company is trying to save the stock a little bit.

>> well, i think that what i would say is that the company blindsided people with negativity and did not present any of the -- it presented very slim analysis of the positives about what they're doing and how it paid off in 2017. there was a lot of pain taken in the stock and some pain that was meant to be taken in this quarter. but no gain in the stock. but gain in 2017 earnings. and i feel better about honeywell, after thinking, wow, these guys are really been challenged just like everybody else. it is dave cotte's last year as ceo. i think he felt like the presentation didn't represent what he wanted to represent. is he talking up the stock? the last page of the presentation is basically that the stock is too cheap. so you could certainly say that was his goal, to get the stock up. i think what he really was trying to do is say, you know what, i should have talked about the positives, i was wrong. it's very rare that you see a ceo come on the air and say i was wrong. and that's what he said. and i believe him. >> all right. so jim feels more positive about

the stock, and the stock in the afterhours session is reflect that go. jim, thank you for joining us, jim cramer with his market moving interview with the ceo of honeywell. what do you make of this, kind of unusual. >> very unusual. so unusual because you think, just leave those loan numbers out there, you've lowered the bar for yourself, either it doesn't happen and that's okay, or it does and then that's good, the street feels positive again. so he must feel -- i think, it wouldn't make sense for him to do it unless he did really feel that he was too pessimistic on the call. >> but this is a company with restructuring, great track record for conservativism. i think if they can't make numbers that they recently gave you, that would be more concerning to me. if it was miscommunicated, which is what he's come out and said, i think that's very important. by the way, the stock is cheap, at 15 times 2017, it's cheap.

>> how does this change our view of the earnings pastiche that we've developed? >> pastiche? >> when we talk about the companies that have reported results and have warned in some capacity, alcoa, dover, ppg, and people say, and honeywell, where so usual for honeywell. when you take that out of the equation, how does it change the view? >> i don't think it does for the macro space. honeywell has figured out a way to operate in this environment. i want to see more of that video because there were interesting insights in that. i don't think it's saying, hey, things are going gangbusters. >> you saw a small snippet of the interview. the full interview will be next, top of the hour on "mad money." that stock, again, up by 1.8% on the back of that interview in the afterhours session. still ahead, john stumpf

officially stepping down as ceo of wells fargo. what happens next to the big bank? will congress go after incoming ceo tim sloan? we'll talk to one of the company's biggest critics, congressman dan meeks. much more "fast money" right after this.

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welcome back to "fast money." coming up in the second half of the show, there's one stock that hedge fund manager dan niles says every investor should own, he'll be here to tell us what it is. plus facebook is losing its cool factor among teens and one company is a big beneficiary, we'll explain. can wells fargo regain trust of consumers? aditi roy is standing by with the latest in san francisco. >> reporter: hi, melissa. that's the big question one day

after john stumpf's resignation. today the stock closed at nearly $45 a share. successor tim sloan spoke to cnbc's will frost and said stumpf's departure is just the first step in putting the scandal behind them. >> we all have to work together to restore the reputation of the company, to continue to focus on moving the company forward. so one person, whether it's john stumpf or, candidly, me, is not going to make the difference. >> reporter: sloan also said other changes include shuffling management in the retail bank business, changes to their incentive program, and customer fees. reaction was mixed, with goldman sachs saying investor concerns about political and regulatory overhangs will likely persist. with the bank's q3 earnings coming out tomorrow, deutsche bank said, we really lowered our 2017 earnings by 4% to reflect

higher regulatory legal costs and revenue give-up as well as $2 billion less buyback. we talked to some wells fargo customers themselves who said windowing back their trust could be an uphill battle. >> i'm the kind of person who doesn't monitor my bank accounts. i was grieved to hear that bankers were being opportunistic. >> i was disappointed. i've been an account holder since i think 1969, so a long, long time. i've been pretty disappointed in it. >> i'm considering options. but, you know, i'm pretty loyal in that regard. i'm definitely considering some other options currently. >> reporter: and in another effort to get back that trust, wells fargo took out a full page ad in newspapers across the country. et cete its title, "moving forward to make things right." >> thank you, aditi roy in san

francisco. with stumpf gone, we talk to new york congressman gregory meeks who serves as a member of the house financial services committee. great to have you with us. your questioning of mr. stumpf was memorable, to say the least, on capitol hill. you've put out a statement saying the selection of tim sloan raises questions. why? >> because tim sloan was part of the executive offices when this was going on. he's been there for some 29 years. and he didn't do anything in his executive position previously, so why is he in any different position than the outgoing ceo? i like the fact that they're separating the ceo from the chairman of the board, that's a good first step. but there's a lot to do. because the whole climate at wells fargo, we're not just talking about a small division that was regional. you're talking about something that was widespread. how can someone who was part of it now be the one that's going to fix it?

>> people who would defend tim sloan would point out he was mostly on the other side of the bank doing commercial lending. on the wholesale side he was only president and coo since november of 2015. his oversight capacity was limited to just the past year or so, when most of the wrongdoing happened prior to that. i mean, would you have rather somebody come in who was completely separate from the bank? >> i think -- >> how much are you going to blame him for what happened? >> what i'm saying is we have to look into what he knew, what his capacity was while he was there, who he managed, and what his connections were. but also i think that we've got to look at, in my estimation, and i like what i saw listed there when you talk about compensation incentives, that's got to be revamped. when you talk about how the company is doing business completely, that this was only the first step. i think you've got to also look

at the board of directors who is on there, who is supposed to be overseeing this. those in the executive staff offices at the time. the last thing that i think there has to be to get the trust back, there has to be a clawback to some of those executives who are leaving with hundreds of millions of dollars in golden parachutes. >> with stumpf out now, does that mean that what you do on the house financial services committee, that you guys will let up on the bank? >> no, not at all. not at all. >> are you calling tim sloan to capitol hill? >> we will call tim sloan and others. i would like to call some of the members of the board to capitol hill. what did they know? when did they know it? because one of the other big problems here is that when they realized the fraud was taking place, how it was handled thereafter. it's been years. this wasn't just something that found out about and then they went immediately to do something about it. "the l.a. times" discovered it, the executives knew about it,

and nobody seemed to do anything about it other than fire some of the low level employees. that is a basic problem. they allowed the fraud to continue, they didn't get back to their customers immediately to say we're going to fix this thing and give your money back or fix your credit ratings. they allowed all that to continue to exist. we can't just say that because one man or one person left, that's going to fix the scenario. there is a lot of work that has to be done so the public can get the trust back of wells fargo. >> so mr. sloan should be expecting an invitation from you to go and testify? >> absolutely. >> all right. in terms of funds, we have looked up some of the funds that your colleagues have accepted. some colleagues have accepted money from wells fargo. do you think that your colleagues should give back that money, seeing that that money is coming from what you deem to be a criminal enterprise? >> well, i know what i did, because i had -- i told my individuals, give the money

back, because i didn't want to be part of a criminal enterprise, once i saw what was going on. and to me, the biggest concern that i have here, as was talked about during the hearing, because we've got to fix this. financial services industry is too important for all of us. and what this does is gives the whole industry a black eye. so people start wondering what's happening here or there. and it's too often main street against wall street. it shouldn't be that way. i understand the significance and the impact of our financial services industry. it is what makes america america. so when folks talk about get ready of wall street, getting everyone with one brush, that's one thing. so that's why this has to be done, investigated, and done very aggressively so that we can get the confidence back in wells fargo, but then it also helps get confidence back in the

overall markets so it's never a conversation like we're having right now in political debate. wall street against main street. wall street and main street are tremendously important. many people or many streets, money are invested in wall street so they can have the retirement they need when they get orlanlder. we have to fix this so we can have confidence in these institutions. >> congressman, thanks for joining us. congressman gregory meeks who serves on the house financial services committee. he's locall. >> grew up in new york. >> as local as you can get. >> everything he said is absolutely true. i mean, is it a criminal enterprise? that might be a little much. i think that might be just pushing it a little bit. but should somebody face criminal charges for this? probably, 100% yes, sir.

>> what does this tell us about the pressure on the bank, the overhang on the stock, if there are still going to be invitations sent out to wells fargo? >> he's got some leeway to say, look, i'm the new guy in town, he's got a new quarter coming out tomorrow. >> the woman who is the head of the unit reported to him during the last year. >> he was there from november. >> november 2015. >> hold on a second. there's going to be an sec review, in as he did of sarbanes/oxley. there are tentacles to this, criminality. >> we need to hear from warren buffett. he did it when some ow soloman . snapchat preps for an ipo,

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welcome back to "fast money." teenagers may be spending more time than ever on social media but their tastes are changing. courtney reagan has the results of a new survey. court? >> hi there. piper jeffries has been tracking teen consumption habits for 16 years. they survey 10,000 american teenagers from across the country and just published the latest iteration of the data. snapchat surpassed inst eed ins. now snapchat is the top social platform among teens. instagram comes in second. facebook and twitter are tied for a distant third at 13%. snapchat is also the social platform with the highest engagement. four out of five teens use snapchat at least once a month. just over half are signing into facebook at least once a month. it's the younger teens pulling

down facebook's popularity. 14-year-olds are using it half as much as the 18-year-olds. most teens are accessing social media platforms on their iphones, three-quarters own iphones, the highest in history, and even more than that plan on buying an iphone for their next phone purchase. snapchat is on fire. i know that the ipo is right around the corner and you guys are going to talk about it. teens will be on board. >> thank you very much, courtney reagan, fascinating results from that survey. i know you snap, guy, very active snapper over there. but in terms of an ipo of a unicorn of this size would indicate to me that perhaps money will be pulled out from other areas of the market in order to fund a snapchat purchase. >> i think that's right. and just on the other side, i don't think that's a halo effect that comes from this ipo. the ones in the private market,

we can't really value. >> it doesn't make instagram more valuable? >> instagram is valuable in its own right and obviously is clearly one of the more relevant social networks out there. people have to be careful about assuming just because there's a lot of money being thrown at this valuation, every company is not snapchat. >> how do you think about it as an owner of facebook? >> i don't like to hear it, facebook not in first place anywhere. instagram obviously an extremely valuable property. i think if snapchat gets a huge valuation, which seems likely at this point, i do think that probably instagram gets a higher valuation. we don't know what its valuation is right now, it's embedded. i think people will embed something higher. >> facebook came in third or whatever, it's almost like they've actually grown into a commoditized intent. they don't really on the cool factor, they don't care. this is something that even for the people who are cool, they rely on it for commoditized. i think it's very bullish. another company that teens

love, apple, up more than 20% over the last three months. one hedge fund manager says its biggest days could still be ahead. dan niles joins us on the fast line, a founding partner . you covered your short, you're long now. what happened to make you change? >> it's pretty easy. when you talk about apple, if i talk to people that i know and ask them, what kind of market share do you think apple has, most people are sort of, 25, 30%. their market share is only about 12% of the entire smartphone market if you looked at it in terms of units. samsung has about 23% market share. for us, when samsung started to have the problems, we started covering our shorts. and then when we felt the problem could end up being a lot bigger, you know, we went in and bought -- and got long back i think september 12, the stock

was around 105, somewhere around there. and so if you think about that, they've got half the share samsung does. samsung stopped producing their flagship phone. there's a lot of share they can pick up. then a lot of people believe the product cycle next year is going to be a super cycle. i'm not sure i believe that, but i don't think you need that for a stock trading at 14 times trailing versus the s&p at 20 times. it's got a 2% dividend yield. i don't think you need a whole lot. the stock is down about 13% from its high off 2015. you talked a lot earlier in the segment about the s&p, i think it's down less than 3%. so there's multiple different ways i feel like you can win, whether it's the valuation dividend yield of 2%, and the one that only matters to me, the fundamentals, with 12% share, the number one competitor at 23, there's a lot they can pick up.

>> apple was attractive, the market share numbers versus samsung were probably approximately the same a couple of months ago. it sounds like the thing that changed in your view was samsung's woes seemed to push you over the edge. is that the right characterization? >> it's one of a couple of things. the carriers, at&t, verizon, they've been trying to get away from subsidizing phones for the last couple of years. that's not a great model for them. what happened with the launch of the new iphone, for whatever reason, these guys came back and said, hey, if you trade in the phone, and lock in a new two-year contract, we'll give you the phone for free. that's a big difference from a couple of years ago. now all of a sudden you're incentivized to do it. then you're seeing a lot of the numbers come out from the carriers, iphone sales were pretty darn good. you're looking at all of those pieces together. then the final one being, they burned a lot of inventory.

valuation dividend yield, i honestly don't care. the market can keep going down, right? the thing i care about is our fundamentals are getting better or worse. and with the carriers subsidizing, samsung shooting themselves in the head, that's the thing that makes the valuation and the dividend yield actually matter, because then you can say, huh, okay, that gives me a margin of safety, then maybe the stock can work. those things -- that's the only time that matters. i don't care about valuation or dividend yields really otherwise. >> dan, thanks so much for phoning in, always good to talk to you. dan niles with alphaone. do you agree with dan? >> it's an interesting catalyst, one of your largest competitors isn't producing product, you're going to pick up market share. it doesn't necessarily mean that market share has to go to apple. google just came you tell with their pixel phone, why can't it go to google? incrementally, could you pick up a little bit? i don't know if it's enough for

me to get into the stock. >> i think it rallies up to the 124 level, that was the previous high six or seven months ago. then you see what happens. the trajectory continues to be higher. you can say what you want about samsung, if it matters, it doesn't matter. the reality is the headlines are seemingly helping apple and they continue to help them for the next $7 or so. >> certainly it seems like wall street is getting more bullish. hardly anybody is going to cite samsung. >> it's amazing to me. >> nowhere did they mention the samsung galaxy note 7. >> that's good and bad. what i don't understand is why suddenly analysts have gotten bullish on the iphone 7 after it was essentially seen to be a nonevent. demand, is it better, were people wrong about the install rate, the refresh rates? the bottom line is the company is going into the best season of the year.

i don't think you get bad numbers from apple until you get into fiscal q2. ahead, one major defense stock could tank in the next month. you're watching "fast money" on cnbc, first in business worldwide. where, in all of this, is the stuff that matters? the stakes are so high, your finances, 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.

welcome back to fasting fast. do you ever feel like ads from amazon and verizon follow you across the web? you're not paranoid. julia boorstin has more on harnessing the power of artificial intelligence. julia, this will freak people out. >> melissa, those ads are following you around the web. brands are already deploying artificial intelligence for super targeted messaging and beyond. north face is using artificial intelligence from ibm's watson to recommend a jacket for travelers based on what trip they just booked through a conversational interface. an analyst says this is just the beginning of how ai and facial recognition can figure out what message is right for you. >> what we're going to see are ads and brands and even, you know, complete stadiums, if you will, identifying me and automatically tailored to me

proactively. >> stores could show shoppers digital displays in their windows based on facial recognition and what they know you already like, improving the chances that you'll go inside and make a purchase. a number of public companies are already cashing in on ai's advertising potential. facebook messenger, twitter, amazon with its alexa interface, google. if ads are too targeted, it risks creeping consumers out. madison avenue will have to watch it very carefully. it could prompt more ad blocking or people amping up privacy settings. >> thank you, julia boorstin. you were creeped out as soon as julia started talking about this. >> first of all, i don't like anything so it's lost on me. i mean nothing. >> they probably find you creepy

as well. >> i'm so nice. >> how powerful is this for retailers? >> i mean, yeah, it does make a difference, if an ad for something you kind of want shows up. >> if you look for brown vests and all of a sudden there are ads all over the place. the industrials, there's been some bearish activity. mike coe joins us from austin. mike? >> raytheon reporting the week after next, we saw about four times the average daily options volume. bearish bets going into the earnings. january, 135/130 puts, paid about 1.50 for that. that is a bed that this is going to be down about 5% on earnings. >> all right, thanks a lot, mike. for more "options action," tomorrow, 5:30 p.m. eastern time. up next, final trade. hey nicole. hey! i just wanted to thank your support team

for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade. whoa. what's going on here? oh hey allison. i'm val, the orange money retirement squirrel from voya. val from voya? yeah, val from voya. quick question, what are voya retirement squirrels doing in my house? we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? no, i'm more like a metaphor. okay, a spokes-metaphor. no, i'm... you're a spokes-metaphor. yeah. ok. see how voya can help you get ornized at voya.com. won't replace the full value of your totaled new car.

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the and modernized ourught i.t. orcclassroom experience.ool which is sick, unless you're the class clown. the cloud app ecosystem got everyone excited about learning again, instead of my hilarious pranks and shenanigans. [ frog croaking ] and the new wireless infrastructure lets miss smarty pants access her data from anywhere. i might have to actually learn something this year. modernized learning, thas to i.t. orchestration by cdw. time for the final trade. tim seymour. >> the valuation of delta, that's the call. >> with volatility up, i shorted some uso instead. >> if you think oil is going lower, that's going to hurt the banks. sell xlf. >> raise your hockey starts tonight, playing the islanders at madison square garden.

did you see the reversal of jetblue? in earnings on the 25th, jplu. i'm melissa lee. don't go anywhere. 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 money. my job is not just to entertain but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. this market revalues a company's worth on an hourly basis. that's still one more reason -- i've given you a basket of reasons, why it's been so