plus, there is always the chance you will pick up more when you actually get to the store. >> i know, you got to go, still there are online items you pick up in the store. it's a little, i don't want to say confusing. >> reporter: it will show up. i know we have to go, it will show up if it's eligible for you. they can't stock all of them in the store. if you want it, they are trying to get it to you as cheapest and they save you money. >> "fast money" starts right now. >> breaking news, two big stories out of washington, d.c., moving the markets today, president trump just arriwrappip a press conference hours after rex tillerson's meeting with russian president vladimir putin. plus trump making surprising comments about the strong dollar, interest rates and jan etc. yellen, who he says is not toast. we have full team coverage, cnbc kayla tocci. kayla, we kick it off with you.

>> reporter: melissa, today when the president held a joint press conference with the secretary general of nato, he began walking back some controversial comments he made on the campaign trail criticizing the institution as outdated, irrelevant and obsolete. here's what the president said. >> the secretary general and i had a productive discussion about what more nato can do in the fight against terrorism. i complained about that a long time ago and they made a change. and now they do fight terrorism. i said it was obsolete. it's no longer obsolete. >> reporter: the secretary general though said something had changed. he said the institution turned a corner financially with member states pledging more money, more cash commitments towards the alliance. of course, there is a ten-year window for them to reach 2% of gdp in terms of defense spending. some are taking their time. he cited some da they we brought from you earlier from nato's annual report that showed in

2016, nato members excluding the u.s. actually increased their defense spending by 3.8%. >> that reversed years of declining defense spending. but the secretary general said part of that is because tensions around the world are rising. when tensions fall, these countries devoteless money for defense spending when tensions rise, it's organic that that spending will rise, that goes against some of the comments in the trump administration that there are conflicts that are fewer around the world and that's why some of the budget outlays for the state department, for instance, are falling. i also want to tell you what they said about relations with russia, because the drama around secretary tillerson's meetings with vladimir putin and his russian counterpart sergei lavrov today are what the markets are focused on. the two leaders, secretary tillerson and mr. lavrov were even kieled in a press conference, but they disagreed on substance of what to do in syria t. president and secretary general are both committed to

working with russia, through having a dialogue. secretary general said that he does not want another cold war but they have to be united in the front against russia. the president said he praised secretary tillerson's performance. he believed the meetings maybe went better than anticipated. but in conclusion, he said, we'll just have to see. but in terms of the intervention in syria the u.s. airstrikes that happened last week, he said we absolutely, melissa, did the right thing. >> kayla, thank you. those meetings took place and the dollar moving on trump's comments with an interview with the wall street journal. steve leishman has those details. >> reporter: president trump made unusual remarks about both in a wall street interview. trump said the u.s. dollar is getting too strong, it's hard to compete when the dollar is strong. guess what it did? it immediately fell. you can see it right there on represent lows. the president said he will not label china a currency manipulator in a report due this week. that reverses a significant

campaign promise, we just got word, confirmed by the treasury spokesman, it will not be in the report coming out. president trump acknowledged china may not be manipulating currency. he says labeling a currency manipulator would be a setback to confront north korea. senate minority leader chuck schumer responded immediately say the president has a lock of real tough action on trade with china. finally the president said he's undecided on renominating fed chair janet yellen. trump said he quote likes and respects yellen and it is too early to decide. the president said now back in september you remember he's a low interest rate guy. the yield fell three basis points. it's moving now in response to the lower levels since after the november election. just a note, guys, we have been talking wall streetedly abo rep trump hasn't said anything about yellen, that was done in the margin or offer or a

re-appointment could potentially be out there. so as you said if your intro, yellen not toast. >> yeah. >> in other words the journal said is she toast? he says, no, she's not toast. so i'm dying to know what janet yellen is thinking right now. >> reporter: you might imagine, melissa. >> exactly, thank you, steve leastm li liesman. some interinvestigation in syria seems more likely plus on the u.s. side, sofrening on janet yellen -- softening on janet yellen. he is talking down the strong dollar. all of this as the trump trade continues to unwind, financials all down around 1% as investors seem to be second guessing what action the trump administration will take next. is this the end of the trump trade as we know it, guy? >> i am starting to question what the trump trade is in the first place. >> it's back pedaling on a lot of the major things he's

campaigning on. >> i don't want to get too much in the weeds here, i don't think the u.s. president should be making a question on the u.s. dollar, this is the second time he's done it. i'm not sure if he wants a weaker or a stronger dollar. he talked about china being a currency manipulator. last year they have done everything they can to keep their currency strong, if anything, they're the currency manipulator out there. with that said, is the trump trade over? i don't think so, i got to tell you, some of the things lead me to believe we're close. transports had a miserable day, led by fedex down 3%. it holds in my opinion 160. russell gave back all of its gains. pete will speak to this. the vix nine-day monday was up 6 or 7%. up again today. we haven't seen a move in quite some time. >> the volatility in the markets, it's not the markets itself is so volatile. it's come in. the in fact that it got over 16 today, but that's a pretty substantial move when you consider he was having a hard

time closing above 13. we have one close above 13 until monday. so volatility is back in the market. i think part of that is the trump trade, the concern, i don't think it's necessarily over. but the problem is, it is getting pushed out and pushed out and i think that's part of the frustration. >> it is being pushed out? >> one day it's health care, health care doesn't work, suddenly we will look more towards tax reform and everything else, now we hear maybe it's another part of this thing again. >> i would make it the market has taken the trump trade away from the sectors supposedly most in line for the benefit months ago, certainly weeks ago. to me it's been nasdaq and even certain parts of industrial space that don't have a pattern of that coming from the government that have done very well. back to the mark, i agree with guy, think about this the breakdown in the industrials, in the transports the small cap, all below significant levels t. breakdown in the s&p, it makes that 2,300 look almost a guarantee and that 2280, which are levels which are fine, which

are fine for a market that really is struggling. the good news is actually earnings start. i think they will give us a breath of fresh air, quickly on russia and nato, because there is a lot to talk about. it's laughable to me how we have swung this pendulum between putin suddenly was a great guy and now relationships with russia have never been lower. ultimately, we're at a place, where the approach towards russia, it has been bungled by the last administrations, rex tillerson gives me more confidence on this relationship than anybody we have seen in a long time. >> i agree 100%. the banks will shine, i think will you see commentary out of management, commentary will be very positive, in my opinion. i'm looking to stay trump run initiatives right now, the market is not necessarily given a lot of credit. they're given the nominal growth. they're looking at growth. the treasury yields is an indicator of that right now. it's showing you growth may be swelling, therefore, people may

be getting the concern. where yields are, it's scaring the heck out of people. are the banks going to come out with big numbers? will guidance be good? i think so, will that be enough for investors to continue to buy the store. i think long term they're a great investment. can you continue to own them. i don't think we will see that big yield term pop coming out of management tomorrow. >> when trump has elected concerns out there, they were the point labeling china a currency manipulator, he will remove janet yellen from the fed arc strong dollar policy was a strong dollar policy. here we are. we have reversed on those things, granted the political risks are higher. plus he's still the president in favor of regulation, in favor of tax reform him some might say this is an improvement from 24 hours ago. >> i just think it's again, it's concerning. i think it's somewhat comical that the couple places where i think the trump administration can help are places falling out of bed.

you look at the steel sector, you had two events, one was ppi, which shows that china is dumping a ton of steel, which means that steel production went up. u.s. steam, nucor, aks, all these companies getting a huge pat on the back are not getting it. we raised tax on octg products, which is basically in the steel space, the company that drops pipes and things in our country t. koreans didn't do enough to raise the tariffs, look what happened. i think it's a big deal. >> your point is well taken. if you look at what happened last summer. i was talking to somebody at our desk, hrc in china versus the uz. >> hrc, hot rolls. >> right. you look at price of steel in the u.s. versus china right now, the spread is incredibly wide. what's going to happen? have you buyers basically on strike saying we will wait. there is no reason to pay these prices the buyers ultimately win. will you see prices correct, or

at least that spread can track to a point where it's much lower. >> the interesting thing, we didn't talk about it yet. sooner or later, the gold the buying for a long period of time, and that trade sort of had gone away and now suddenly it seems like every day we are seeing another move, another move, another move. >> does that make you look less confident? >> it makes me look nervous. i own gld as a hedge. i am not a gold bug, over, everything is terrible we have to move towards gold. >> the opportunity -- >> you got to move, though. >> if you look at the correlation of gold versus the movement of the dollar, look at the gold rally. >> for more on the markets, chief u.s. equity strategist says the trump rally could be in trouble. lori, what do you see? >> so look, beyond trump, we think that markets are prime for a little pullback anyway, given an extended valuation. our comments are the same with we may have a soft patch on the second quarter as well.

trump just asked for that. >> you are also seeing that his approval ratings are highly correlated, correct, to the s&p 500. they are at lows right now? >> if you look at the favorably rating, we talk about trade, the way i define it is what is moving, it's the risk of trades, s&p, looking at small pop, value versus growth. financials versus the banks market. >> when you talk about valuation, can you get granular? prices, multiple, book value? >> my favorite indicator is looking at the unweighted medium s&p 500 pe on earnings, that's at 18.6 right before the brexit sell-off. in mid-march it's at the exact same level. >> we get bank earnings tomorrow. can you make an architect j.p. morgan three times booked f. you look at where they have been over the last 18 years, not so pricey, yet still a good dynamic there. >> i have been fighting onen advisors all year. they were deeply under valued last year around the election.

so every time we get a little of a dip, you get that valuation story re-emerging. i think this trump trade is in a little of a pause, it's much tougher sweth than the pause. you look at the dip here. >> we didn't rally because valuations are too low. i look say will we sell off? because valuations are too high or are we going to pause until have you earnings catch up with expectations? >> see i disagree with you a little bit. >> "fast money." >> if you look at the xpee was friday before the election, we were at 16.9 times. if you go all the way back to the tech bubble. when we got out of after after math in 'o4. it's been about the low point, aside from the financial crisis. if are you not having a fixed price on the mark, that's pretty much been the low, we seen it 2015, 2016. i think everything that trump said from a fundamental perspective that sparked this trump trade happened at a time

when valuations were at a natural low point. i think that's why it works. not because of the promise, we were primed. >> the rally was beginning even before the election. i mean, stocks were starting to get that signal, things were picking up, we were seeing better data, things were going to improve. therefore you saw people take that positions, that accelerated it, no question. i believe we were at that point where we were feeling growth. the numbers picking up, things improving in general. >> you saw the yields. that's what got the banks started. we upgraded it around labor day. we lost on brexit. by the time you got back to labor day, you could tell the economy was cooperating. trump piled on to that. >> in an environment where the trump trade stalls, you want to be in the non-trump trade, you had nothing to do with trump? >> i don't know what happens with trump, to be honest. >> technology for one. >> yeah, i'm actually neutral on technology, but i think semis,

for example, are over valued, but my favorite trade on the short term if markets have a little of a pullback is biotech. if you look at the different correlations between the different industry groups, it's one of the most inversely related groups, it's the exact option of banks. i don't know why, it could be because they're interest rates and he is pushing yields down. we like the valuations there, they had a nice move to date. expectations are low heading into reporting. >> lori, thank you. steve najerian, what trades you? >> i think lori with respect to the tech, the reason i like the tech still is when you got growth and valuations and you look at yields and the balance sheets and the fundamental am stories, if they continue this next quarter and continue to deliver like they did last quarter, i think the tech trade, i think there is plenty of upside. i think the same things on the financials, it seems she is much more bullish or neutral right now in the financials, so i think those are the trades coming out of this. i think the most interesting

thing is, why is confidence levels so high right now with all of what we're all talking about on this desk and whenever we get those reports on consumer confidence of any kind, it seems like they're at either record numbers or extremely high levels, it's amazing. >> the bull bear readings this morning, we are told the divergent, they were almost in the highs. >> still ahead the drama is going with united airlines as the passenger removed from one of its planes looks like he's preparing to put up a legal fight. president trump weighs in on the drama. plus is karmageddon comeing? one top economist believes so, she is here to say what got her worried about the auto industry. and the big banks financials negative ahead of three big earnings reports tomorrow morning t. charts are pointing to trouble ahead. much more "fast money" right after this. see things your way. ♪ ♪

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>> welcome back to "fast money". we start with a dropping story on united airlines as president trump just weighed in on circumstances that led to a passenger being forcibly removed from a recent flight. phil lebeau is standing by with

all the details. hi, phil. >> reporter: melissa, everybody has an opinion about this, including president trump in an interview with the "wall street journal" late this afternoon. two pieces of news regarding donald trump's opinion of what happened. first of all, he says airlines should not be prevented from overselling seats on a particular flight. also that airlines should have the caps removed when it comes to bumped passengers. we will talk about that at the end when we hear froms a core munoz, what about the passenger forcically removed from that united airlines flight? we haven't we heard from him. we have we heard from his attorney. he is seeking information regarding everything involved with what happened on sunday. >> that means preserving video, documents, cockpit voice recording, everything involving this incident, passenger manifests, the motion essentially is targeting united airlines as well as the city of chicago. they basically want to preserve all the information regarding

what happened on that flight as dr. dao was dragged off the plane. as for oscar munoz, he gave his first interview this morning talking about the situation. here's his take on what went wrong sunday night. >> it was a system failure. we had not provided our front line supervisors and managers and individuals with the proper tools, policies, procedures that allowed them to use their common sense. they all have an incredible amount of common sense and this issue could have been solved by that. that's on me. i have to fix that. and i think that's something that we can do. >> reporter: oscar munoz says he made the decision or united made the decision it will no longer be using law enforcement to remove passengers who have been bumped from a flight, actually getting them off the plane if they are already sitting down on a particular plane and united will be compensating all of the

passengers on that flight, the cost of their ticket. in other words, people on that flight, even if they weren't involved in this. they're getting their money back. so united trying to make amends here and finally, melissa, tomorrow there will be a press conference being held by the attorney for dr. david dao. >> that will be in chicago. we'll be there, mem lisa, i mention to you, we'll have more about donald trump saying, hey, remove the cap on how much airlines can compensate passengers and he said airlines should remove it. it's the dot that sets that cap. it's his transportation secretary that can easily move in that direction. it's not the airlines, that is a federal guideline there. so i wouldn't be surprised if we see action by the department of transportation. >> and the federal glean now is what 1,300 on 1350, something like that? >> yep, 1350. that's the upper limit in terms of what the airlines are obligated to offer. it doesn't say they can't go above that. what he is saying is get rid of it altogether. phil, thank you, phil lebeau on

this developing story. has united done enough at this point? what do you think? >> yes, i do. i do. and i think we will hear more about this from somebody who should, frankly. i said this yesterday, i would froefr focus on the earningser, which are coming up. you had great earnings out today, everybody is watching how efficient these guys will be. i argued with dana yesterday. i think sentiment in earnings is terrible for companies that to me continue to show demand. they talk about dead manned. it's very good. >> a couple things. that was a great interview number one, number two, have they done enough? the new cycle next wednesday this will be probably long forgottenful something else will happen. pepsi happened. next thing, you are right. things go away quickly in our world. his original instinct, the first message was so tone deaf and so wrong in my opinion it doesn't matter how great he was today, his instinct was to such basically blame a belligerent passenger and say we filed all

procedures. in my opinion, once after that he was lost to me. >> one analyst said we will see if somebody like delta picks up share. there could be share belief because of this incident. >> delta talked about the idea, everybody talked about it. we talked about expanding the seat tops and so forth. it looks like delta will at least hold that down for now. they are expanding on one thing, which is margins going forward, that looks good for delta right now. i tell you what, hawaii is an interesting airline. this is a stock trading at $60 a share, it's been getting dragged down with the rest of the airline industry, if are you looking for opportunities, i already own dell that. i am looking at one right now. >> pepsi is soaring to an all time high, one an lest says the stock is right for a takeover. they play match maker later this hour. i'm melissa lee, you are watching "fast money" on cnbc first in business world wide, here's what else is coming up on

"fast." you see that? >> yeah, we see it. and so does bank of america's chief economist. and this time bruce willis can save us. she'll explain why karmageddon could be right around the corner. plus ♪ i'm so excited ♪ i'm so scared >> that's exactly how inhavers are feeling ahead of bank earnings tomorrow. we break down the winners and losers when "fast money" returns. [vo] quickbooks introduces jeanette

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>> all right. welcome back to fast money. we are live at the nasdaq market site. geopolitical concerns took center stage below 50-day moving day since election week.

here's what's coming up, call it a car crash, ford and general motors, auto sales take a hit. that's one economist ringing the alarm on the industry. she'll be here to tell us why she is so nervous. pepsi shares an all time high after pulling this controversial commercial. what is behind this big move? we'll explain. we start off are financials, they turn negative for 2017, this comes as jp morgan, citi take off bank earnings tomorrow morning. what should investors expect? dom chu is in the newsroom with a little preview. >> reporter: melissa, no doubt, it's pedal to the medal, if you are an investor, the three big banks set the tone for the rest of the season, so here is your earnings quid card, citi and wells fargo, analysts are on average looking for earnings at $1.52 a share on revenues of 24.8 billion.

look at the capital market activities there, like trading. the options market could be a plus or minus 1.8% move in the stock after the report. citigroup analysts are looking for earnings of $1.23 a share. same kind of steer here as j.p. morgan, options traders here looking for a plus or minus 2.1% move a. more traditional lender wells fargo, look for 97 cents per share revenues and, of course any commentary on the ongoing fallout from that big account scandal as well as what profit margins are affected by the interest rate mark. options traders plus or minus 1.7% move on the heels of the report. according to thom thompson "son ibis expect eps goat and

mellissa, we will see how that whole thing looks and the projections look after the big three report tomorrow before the opening bell. back to you guys. >> thank you very much, dom chu back at headquarters. the banks could hit it out of the park in terms of eps and revenues. the big question is guidance. what will they say whether or not they are seeing a stand still in for instance lendsing or people planning to go public. >> i think we need to hear about revenue momentum. it's there. you got year over year revenue comps are fantastic. despite we look at the 2% spread. two rate hikes mean net interest margins are better. they have grown, they are bettert. they have a record equity and high yield issuance in march. i think people will be surprised by these numbers. >> that's the thing. like, for instance, when i pitched it last week with j.p. morgan. i look at the diversity of their business, the fundamental story, we are already there, if the earnings growth the revenue

growth are there, the loans are a little weaker, that's kind of cooked in, that's why we have been easing back. i think that's the opportunity. i own that stock for that reason. >> i agree i love j.p. morgan. i think expectations are low. i think management teams will be optimistic. obviously, low growth is super super important. i think earnings guidance is going to be very solid given the fact there is a ton of cost cutting coming down the pike they will be able to forecast. >> january seems gold man sax created a great fourth quarter, eps beat it by more than that. tangible book value they said was about $172 per share. it went from 235 to 250. it's round-trip. it's not traded well now for the better part of a month arc month-and-a-half. so they report i think on tuesday. to me it's critical that stock holds 220. i think tangible will be a tad higher. it all comes down to how the stock trades in the after math. you want to trade goodm golgdma

sax, you have to trade it $20. let's go off the charts, trading announced, it's not looking goods for the banks what are you looking at, todd? >> yeah the first thing we will look at before we go into the earnings tomorrow is the ten-year yield on top of the financials. the xlf. the first thing you notice is yields go giving us a heads up. that's typical. bonds tend to interpret that a little quicker. if we look at the charts, financials are if blue. will you notice we have not broken recent lows, whereas the ten-year yield has broken it, especially with that push higher in bond yields today that divergence should pull financials down, heading into past earnings. so the stocks i'm looking at, particularly wells fargo, this is a technically damaged stock, obviously, there are stories going on there and the macro forces at play. there is a juicy 51.5 level. this has been the pivot for

wells fargo for a year. i think the markets will try to suck it down t. earnings markets are expected a dollar, 1.15 move. we may get a push down around 51.5 from wells fargo, i am short financials, reaction put the trading nation, another quality program here at cnbc. a fast one, the next one, guy, you mentioned is goldman. goldman has been a massive under performer here. the first thing it did, we broke $230 technical support right here. we are form ally using it as a resistance, you can lean to push it down. the other thing i'll notice is if you look at the volume on that break of 230, will you see, as my earpiece is falling off here, that the volume was increasing on that push and as the market bounces back the volume dissipated a little bit. so it seems to be that goldman is interested to move lower. >> goldman is looking the worst, guy. >> it has traded. it's 100% r50i9.

it has not traded well. i thought j.p. morgan was great. goldman's was almost as good. j.p. morgan has given some back as well. the movement, goldman sack surprises me. i think flash is right. in my opinion, 220, it's the bellwhether of the whole state. >> todd the regionals have been acting worse than the broader thing. that's why i'm wondering if they look weaker on the charts as well. >> it's amazing, the small caps have been a chronic under performer. it's a small regional banks that are driving. so again, that haidah that russell is again warn -- haidah that russell is again warning lower. mostly short to market. i don't think it's an all out collapse. i think you are absolutely right, melissa, we are going into a periods of voltivety here. >> thank you. >> what the banks after the election, obviously, there was one way trade built up in deregulation t. banking sector more than any saw the most

perverse movements, in other words, you saw names that should have been selling off on this news, higher rates, mortgage activity, et cetera, the one that was good. you get back to a place where you can do a lot of stock picking in the ranks. >> have you been adding by any chance? >> j.p. morgan, i talk about that a lot. j.p. morgan i'm looking at adding more stock t. interesting thing is on a sell-off, let's say the earnings are great, maybe the forecast isn't what everybody is expecting. who is going to be buying other than those of us on the desk that can and want to? j.p. morgan. because j.p. morgan, we already now from what jamie dimon talked about, look, i like the trading one times book. i like this all the way up to two times booked. if this thing gets sold off, i think -- >> but look at j.p. morgan's chart, of all the charts, that's the chart if it breaks down in this year level, it's going 76. and that's the most precarious chart. no disputing this. >> that's why hedging is so important. that's why hedging is so smart.

what we have seen a lot of recently is i don't think positioning towards the down shot. but buying hedges on stocks like j.p. morgan. yes. >> you mentioned the region also. i love the regional banks here. i would be a buyer for a long-term position. i own them, i will continue to own them. near term could be a little down term rick. there could b. ultimately, they will be the biggest beneficiary of reform. >> still ahead, shares hitting an all time high after susquehanna updated the stock and said it could be the next takeover target in the consumer space. so who should buy the beverage giant? our traders weigh in. plus sales continue to climb. >> that has bank of michel's michelle meyer calling for possibly carmageddon. she will be here to tell us how bad it could get when "fast money" returns. and markets continue to rise and fall... predictable is one thing you need in retirement

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>> welcome back to "fast money". calm it a check engine light, bank of america says carmageddon could be behind the corner. high vehicle and fallen sales could lead to major problems with the auto industry. bank of america is head of the u.s. economic michelle meyer wrote the note. she joins us here at the nasdaq.

good to see you. so many ways to think of the impact of the slowing auto industry on the u.s. economy, one sensitivity you ran, we're assuming that the number of units sold per year is going to be lower from where it is now. >> yes. >> so let's say a 15 million units. >> that sort of caught my interest. the impact on gdp is actually tangible? >> it is, auto shares have been declining over the past several decades, now makes up just under 3% of the economy. >> that said, if you get a big enough move in auto production auto sales, and clearly lit move back into the economy. let's say a worse case scenario this year we average 15 million, which is below consensus expectations, that would be a direct hit of .4% on an annualized basis. have you the spillover, inventory build, what it does to production change more broadly, desperate states, et cetera. >> what are the concerns about the amount of subprime loans out

there and the ability of the people to pay their loans, especially if loans start to grow and the ability of lend earnings extending the loan to actually keep up? >> it all kind of feeds into one another t. fact that auto sales are weakening is is probably it's weakened. loan growth declines, which one came first is not clear. weak you are auto sales means low growth will be slower as well. you generally have adverse feedback. at this point it's not particularly alarming. you know, it's just very early stages of these dynamic, but i think it's something we are have to keep an eye on potential risks. especially when it provides a countert. >> i was speaking to bob nardelli, two former auto executives. they're saying the economy is about tax reform, et cetera, and different policy items of the

trump agenda could be causing people to delay their auto purchases. are you -- you look like you. i don't necessarily buy that either. >> i think the uncertainty already went to feed into the business investment source. if you are big company, you are thinking, are you going to invest or buy a new plot to build a new officer building. >> that matters. policy matters there. but if you are an individual thinking whether or not they will buy an auto or allocate their spending. i don't think they're waiting for those policies. if you look at consumer confidence measures, they're through the roof. people are seemingly feeling positive about the economy right now. >> michelle, for it to be carmageddon doesn't it have to be a credit to that? >> that's why that headline. >> i love it. >> it's a lot extreme. it's supposed to get your attention, it did what it's supposed to do. i think there is some systemic risks within the auto sector

that go beyond simply what is the directory for auto sales and production, that is there some weakness if there is an increase in delinquencys, does it lead to a broad based credit? that becomes problematic. we are not there by any means. >> what's the level, 15 million a year, is that your concern? is that where carmagiddon is? >> is there has to be significant credit. >> 15 over years, that's not. >> probably fine. it's probably a natural part of the cycle. >> michelle, good to see you, thank you. >> carmageddon, great title. look at that chart. everything is going up at the same time. that's a big carl icahn move. we can talk about ford, valuation is cheap. it is cheap, but that stock does not trade well. now it's pushing at the 11.10 level.

which proves to be a double bottom. it doesn't feel like it's going to hold. one has to wonder what happens to ford the stock at these levels. >> auto makers? >> no, look. a big migration for millennials in the city. jobs were focused. hopefully, we'll see jobs spread out more. you will see people live in the cities and work ingested areas and what have you. it's a spending habit in my opinion. there is a lot of people out there. there will be pent up demand at some point. we talk about stuffing the channel. a lot of the oems are forcing the dealerships to take on invent air they can't sell. that's becoming a problem. they look at the valuation perspective. i wouldn't touch it as an investment long term. >> i think you are a gm as well. the story i like is the international story for them. other than them, i'm not a huge fan of the auto makers, themselves, i keep an eye on good year tire. it spikes up really fast this past year. because of that you ought to wait. it's trading at 34 and change. i think you get towards 30, 31, goodyear tire is a scream in

buy. >> nothing's changed for me. we know the numbers, 5 million coming off of leases in 2018. have you fleet sales declining rapidly, even though that's ultimately good for these guys in terms of the margins. i'm staying here at valuation. >> all right. ahead, shares at an all time high after susquehanna calls it right for a takeover. the only question is, you should buy it? you are watching "fast money" on cnbc, first in business world wide. dear predictable, there's no other way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced, our senses awake, our hearts racing as one. i know this is sudden, but they say: if you love something... set it free. see you around, giulia ♪

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zbrrnlgs. welcome back to "fast money". pepsi shares hitting all time high today, passing the tape of the stock rallying nearly 2% after susquehanna up to date the price to 132. potential mna activity with budweiser or craft heinz. they pulled this kendall jenner commercial. does pepsi have a target on its back in do you like it here? this is an all time high when it merged with frito lay in 1965? >> pepsi is the only one of the soft drink companies, coke, obviously, has any drug, because of the snap business, the global

business t. reason they're going higher is valuations. this is a circular trade going on. you can trade it 32 times, which is how do you get it snapped in the number? i get that things are in play. there is only so much blood you can squeeze out of stones, this is too big to be taken down. >> it's a very high valuation. >> when you look at the valuation levels, it seems it's in a nose bleed area. the idea of putting that price target as high as they did is absolutely shocking. it went from a hold to a positive rating. the snacks buy was magnificent. they will have to be careful up here. any mistake at all by pepsi, i think there is plenty of room on the down side. >> i think the delivery in the mid-teens growth story. i think they've performed. they put up and coke hasn't. i think pepsi in general is a story i would stay behind.

i don't believe they l. i think it's actually nonsense, that was where i read it, hoping it happens. >> let's play a little game. >> once again, what game? >> we will play match maker. who is the best match for pepsi? pete. >> all right. ly show you, i got the forest gump trade on. peas and carrots. >> mondeles. >> i like them. it's a little out of the box. everybody will say, i'm not sure they really match. i think they do. >> steve. >> you can't read my writing. i like mondelez as well. but look, my view on it is i don't believe that it's taken out. i want to make sure i'm clear on. that i think the best suitor is momdelez. >> that's extra white board. >> nestle, it's budweiser, the

same guy behind the guy, they will swallow up and find ways to make it work and spread. >> coca-cola trades around 22.5 times, pepsi around 20 currently. i think pepsi deserves a premium to coke. >> no, coke. >> mcdonald's guy, not a burger king guy? >> a whopper mcdonald's cheeseburgerers. you want to keep playing this game? >> no, i don't. >> you can't do this with the white, it can't do that. >> let's see that. >> exactly. >> this is what i got. $200 billion deal. it ain't happening there nothing can happen. [ music playing ] >> the merger, mna -- what price would that equate to in pepsi? >> $146.18.

>> the report is $132 price target on this stock. >> didn't play the game. >> anyway. >>'way. >> play the game. >> as the company hits new highs, one trader says there are more gains ahead. mike ko joins us to break down the action, hi, mike. >> reporter: likely on the heels of that report, we saw four times the average call volume, where they're going on the july call, we saw opening buyers there, paying only 30 cents, they're able to do that, because low volatility like pepsi has cheap options, if you are inclined, that's the way to make they're betting the stock can be as much as 10% highner three months time. >> mike, what do you think could buy pepsi or a match for pepsi? >> you know, the one thing they're going to have to do obviously is partner with somebody in a similar business because of valuation suggesting you need to find some synergy, but i do like the mondelez, that

is consistent with where they were before. >> giddy up. >> what do have you with that? >> why is it boring? >> i couldn't read the board. it's right next to me. >> the boards. the game is off on friday. have a good weekend. i know, play a rerun. meet us back here next friday at 5:30 p.m. for more "options action". don't make fun. up next, one restaurant site that's coming off its caffeine high, it's time to set. more "fast money" straight 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?

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welcome back to "fast money". a quick programing note before we get to our final trades, do not miss a cnbc rare interview, patriots head coach bill belichick. yes, on "power lunch" tomorrow between 1:00 and 3:00 nice. >> final trades, pete. >> we talked about it earlier in the show, hawaiian airs, it's been beaten bad, it's going higher. >> seller, expectations are higher. >> homes down trend, up trend

intact. 1980. pre buy. >> stocks tonight, mel. >> anchor hocking. >> thc. >> never ending season. i'm melissa lee, see you tomorrow at 5:00. "mad money" starts right now. 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. others want to make friends, i just want to educate and teach you. call me, tweet me @jimcramer. what exactly is ailing this market. on a day when