under armou ar, adidas going to consumer direct through their website. >> the dollar, again, another senior sov soft -- >> we always watch the dollar. >> 120, the euro. >> highest level since 2015. we'll leave it there that does for us on "closing bell." "fast money" begins now. >> "fast money" starts now, live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. traders, tim seymour, david seaburg, steve grasso, guy adami. the destruction of hurricane harvey continues to unravel. texas deals with massive flooding and more rainfall expected in the next couple days we just heard the president addressing the nationwide effort of are rescue and relief in the state of texas brian sullivan on the ground in galveston, texas, monitoring the impact of the emergency ecosystem. let's go to him. brian? >> reporter: hey, melissa, thank you very much. the winds are picking up in galveston. largely spared, although we've been driving as far north as we

can. tomorrow galveston is supposed to get whacked inforecasts are wong that could impact the refining industry, which is already hurt. most of the refineries are about three, four miles that way a bunch of them are shut down. an estimated, let's call it 15% of refining capacity offline we don't know exactly for sure, marathon petroleum, for example, was cagy, said we don't give updates. we drove by the refinery today there wasn't many cars around. that's why we're seeing oil drop because if you're not refining, you're not putting into oil. there's another angle for you and the traders which i would talk about which is onshore. houston is a humanitarian issue. that's a whole bigger different issue. let's focus just on the narrow issue of refining. we talked about oil here don't forget about the eagle ford shale and inland. it's not getting headlines now because of what's happening in hust houston however, seaport security are

hearing there are slowdowns in production or disruptions in production because of flooding, rain, road issues, labor problems a lot of the big eagle ford shale players, eog, chesapeake, sanchez energy, apache the storm circling through that region now it's going to come back around through the gulf and whack us, guys, but, you know, in addition to everything else going long, don't forget about the onshore aspects to this story. certainly. as we get prepared, i guess, for round two. although based on what we've seen the last two days, i pray there is no round two. >> everybody does. brian, thank you so much, brian sullivan in galveston, texas energy saw the biggest impact in the markets today. gas prices surging oil settled down about 3% on demand concerns. energy stocks one of the worst performing sectors in today's session adding to an already rough year just how big of a fallout in energy are we likely to see from hurricane harvey and i guess, guy, a lot of it will depend on how much more rainfall is going to fall on

texas and louisiana. for that matter. >> welcome back, mel great to have you back so the short answer is, it's, first of all, you don't want to be glib with this, don't want to make it about profits and los s losses you want to look at stocks, go back to katrina in '05, sandy in october of 2012. the moves that we saw, especially for katrina and energy, were relatively short lived if you go back, insurers as well. selloffs you saw were short lived and the stocks built upon themselves in the ensuing months so to the extent that you've seen selloffs in names like apache, there's going to be an opportunity hoere. i caution you folks, apache has been going longer long before this set of circumstances over the weekend. this stock made a 52-week low today, so they had their own problems going in. but you in terms of the stock mite get one of these capitulation events over the next couple days that getsapach.

the low in 2016. >> you could see a whiplash, in fact, here, but i think we characterize this as a demand story, refined product squeeze i think that has a couple more days, at least that refined product, valero, that's not coming back online. that's a huge cut you're going to see and with the oil, with the overarching macro commodity still under pressure, that's going to be a tailwind for the refiners. >> one of the thingses that interesting about what brian just said, again, this is a devastating moeme ining moment,t there could be a boomerang effect for these folks is really sad. the fact that the inland production might be getting affected is a little bit of a solace for the oil community where we just talk about the demand impact. c katrina, four to five months' demand impact. an industry, they're getting comfort from the fact it's actually becoming more imbalanced, this may knock that balance out to 2018. i'm one of those people that said i already thought we were

imbalanced so the bigger impact for the oil industry, that bounce that was keeping wti, brent, whatever you follow, in a sideways pattern for nine months, thib could be an issue, folks. you add that, we're getting to end of a driving season and other issues. >> and have an spr sale also. >> guy's point of apache selling off ahead of this, very defensive play to own the refiners people are making their belts on the commodity wa in the process of moving lower the refibenrefiners, continue t them the are refst of the energy pac, stay away from. >> i bought some xle on friday maybe i was a little early a. although, again, down 20% of these names. a lot of bad news has has been priced in. the impact, exaggeration effect of this event, i think on some level was already priced into energy some of those blue chip names

like eog, those, to me -- >> if we have wti to test 42, let's say, that's the level that lima of rbc gave me continue power lunch. do we see an xle that moves higher can we see the integrated move higher with $42 a barrel oil the >> there are a lot of factors at work the authority answer is no i'm not pretending to have any insight into what's going to happen in crude, the commodity exxonmobil now for the last 18 months has not been trading particularly well. on an overall tape that's been outstanding and crude oil market until recently fwo gone higher to basically side y sideways in my world, exxonmobil bottoms out, i don't think you touch it. in terms of valero, there's upside left in the stock if you go back to 2015, vlo topped out around $72. given the fact that oil could move lower, i mean, the stars do line up for these guys, probably in terms of the stock prices.

>> and the 3.9% dividend yield valero is paying out, people are absolutely gravitating for this is a name, the margins are going to improve for them. this is a stock, again, people want to own because it's a defensive play that's where the money is going to gravitate toward. guess what, they're going to continue to raise their dividen dividends. dividends going to continue do go higher. it's where the safety money is going to fly into. >> that's the key. safety remember, people need some place to go. not like people woke up on friday, today, said i want to own refiners totally outperforming. 2.8 million a day shut down. that's going to add a lot more oomph to refiner's stories. >> how deep will the energy industry feel the impact of hurricane harvey robert raymond, founder of rch energy, joins us on the fast line from dallas, with the swrout lo outlook following hurricane harvey's landfall. robert, great to have you with us when you're watching -- you know, i know you trade, i'm sure you're watching the weather and the patterns what are you watching for in

terms of the next hit to the energy patch >> well, i mean, i think, you know, this is really sort of a function i think of how long it takes the refining complex, which you guys were just talking about, to really come back online right? and so there's obviously a lot of shutdown capacity running from sort of corpus all the way toward lake charles. so at some point, we're already starting to see it, right, the throughput through pipelines out of the big producing areas like the eagleford and permion starts being affected as well it's really the entire supply chain, right, that slows down, if you will. it does back up all the way to the field level at some point. if the refineries aren't running and able to take in crude for feed stocks, ultimately you can't move as much through the peop pipeline systems if you don't have enough storage to hold those barrels, at some point you have to start doing li things like choking back or

shutting well. the energy industry has a history of responding to this stuff efficiently, right, sort of knock on wood, i don't think sort of the flooding we saw as a result of levees and other issues with katrina and rita, right, my suspicion, i don't know this, my guess would be a lot of the refinery complex along the houston ship channel didn't suffer anywhere near the damage you saw with katrina and rita. >> you think perhaps they could come back online sooner than what the market is anticipating right now? >> well, yeah, i guess without maybe completely understanding what the market is participating, i would characterize it as sort of a few days to maybe a couple weeks. >> sorry to sfwrupt. interrupt. we got breaking news robert raymond eamon javers with breaking news. >> reporter: hi, melissa, i don't have the breaks news you're talking about i understand there's news that's hitting the wires. i don't have it at my position where i'm standing happy to discuss once we clear

what zpaexactly is -- >> a report from nhk that north korea fired a missile. we'll get more on that in the meantime,while we chase that story down, let's continue to talk about the impact on oil. guy, sort of switching gears a little bit, you mentioned the snu e insurers all them trading lower in today's session. theoretically, they're in great shape. they could possibly jack up the ple proceed yums late er on. >> doesn't give me joy to say it that is effective what's going upon i encourage you to look again. katrina was august 2005. quite frankly, insurers didn't really miss a beat little bit of a hiccup didn't miss a beat sandy october 2012 obviously market structure a little bit different at the time saw a bit of a selloff they all recovered within a month, month and a half. i would suggest, probably the same now, it doesn't make people at home happy to hear it if you're looking at it from a business angle, they're probably set up very well to deal with these claims and move premiums

higher going forward. >> yeah. as far as what robert was talking about with the refiners, i mean, we're all watching the flooding, right? refineries can withstand the wind it's really the flooding that damages. >> they were very proactive. they weren't reactive. they were as ready for this as they could be. i think we took a lot of the stuff expectation is this could come back on faster as robert noted i'd just say, you have to ask yourself what's the multiple these things should be trading at that's where you get back to i think in the environment we have, these guys should be trading at a premium when, in fact, there are more people that need to own this sector. a 15% to 20% premium means valero, to me, has 20% to 30% upside to a fair value. >> which creates a league and more after a squeeze into more of those names because everyone wants to avoid large integrated names when you look at xle, it's top heavy with the large integrated names you really need a bounce to 50 or above for crude. for that morality. >> sorry, we got to go back to eamon javers

eamon, we want do go to you again? >> reporter: we have the news crossing from nhk, the japanese broadcaster, they're reporting the japanese government is warning that a north korean missile is heading toward northern japan you'll also see another wire flash crossing saying that the japanese government is warning people in northern japan to take precautions against possible north korean missile that's describing it as a possible north korean missile. again, that's nhk, the japanese broadcaster, largest broadcaster in japan we'll ask the white house for updates they have from here on what activity mail terreilitari be taking place in or near ja fa japan. we'll bring that as soon as we have it. >> eamon javers with this report from nhk that a missile is headed for northern japan. there's a warning out to japanese citizens to take precautions accordingly. but this certainly -- >> this, i tell you what, taking precautions is a lot different than failed and busted launches. i mean, just that headline -- >> much more serious. >> that headline to me is concerning

for a lot of different reasons obviously, you know, from a humanitarian perspective, i can't even begin to tell you, i will say from a markets perspective, what's been going on in washington has meant almost nothing to this market. what's been going on in north korea meant something different. i think we're in an environment here where not only does this bring in the whole course of global disruptions but brings in the course of the u.s./chinese report, also something very disrupt to disruptive to this market. low liquidity could equal higher volatility this is a headline nobody wanted to see. >> they did say possible >> absolutely. this would be very shocking to all of us and to everyone involved if this is actually the case, you see a missile launch in that direction. because a leader like a north korean leader wants to survive so this is something he wants to talk his game up, but never actually do anything this would be extremely shocking >> but if you were on the floor

and this headline crossed, what would happen >> this sounds to me a lot more real than a missile misfire or what have you. so to me, i'm sitting in a trading desk, i'm going to respond to this and get short s&p futures immediately. this is something that could be catastroph catastrophic you think about the market, tomorrow morning you wake up, if this is sfakt, tfact, the marke going to wake up, futures limited down - >> with underscore, if this is a fact, actually happens, if this report is true >> down 5% to 8%. >> scenario. it's a reach for treasuries? it's a reach for gold? it's a reach -- is it a reach for the dollar >> it's a reach for gold, for sure i mean, again, think about the reality that gold has had. it's not been because of politics it really hasn't and meanwhile, the dollar's been in freefall. gold's really only done what it's done in the last three weeks, and that, to me, and bitcoin and all the digital conceurrencies get the bit. >> i'd say still bitcoin, buy gold people are looking for more tangible things they can understand there's been an inverse relationship --

>> bitcoin is rallies proportionately. i mean proportionately obviously it's a bigger rally, higher volatility instrument bitcoin has been pushed over the top by north korea. >> 100%, but when you start to really see something come to fruition, or when you start to see it come to a head here, critical mass, if you look at that inverse relationship between gold and bitcoin, it's hard to deny it. >> of course, your mind goes to defense players. >> which have been unbelievable stocks to own for quite some time i mean, whether this is real, or not, those stocks will -- in my opinion, will continue to do -- president jump jutrump just mend boeing in the presser just now so those stocks have all -- >> this is energy positive at the end of the day, this is actually going to be something that could be a mitigating factor -- >> why is energy positive? walk me through. >> this, to me, puts more of a bid under oil, global disruption fears into, i think, at least the calculous at a time when people are questioning demand. you can worry about supply. >> all right, again, the latest here we have right now, this is

a report from nhk, the japanese news agency, that north korcrek fired a missile to northern japan. the latest here, according to the bottom of your screen, is it's passed over jo papan a story we're monitoring very closely. we'll bring you the latest as soon as we have it. coming up, more coverage on hurricane harvey, how the auto market could be under major pressure following the storm. plus amazon making a splash at whole foods stores today with dramatic price cuts. how do the low prices stack up against the are rest of the grocers? later, gilead's acquisition of kite pharma sent the entire industry into a frenzy the traders will weigh in on which stocks in space could be next to make a deal. much for "fast money" still ahead.

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our services more reliable than ever. like technology that can update itself. an advanced fiber-network infrustructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. welcome back to "fast money. want po mention moves in the after hours session, reports from nkh, japanese news agency, north korea fired a missile that had been headed for northern japan. the latest headline is it's passed over japan. we'll get more clarification, bring it as soon as we have it. in the meantime, take a look here, the etf that tracks the vix is up 2. 5% gold, a safe haven bid, fwrksgl

higher by pnt .6%. a day when goal actually hit new highs, right, as the tladollar index hit a 16-month low not just gold in a vacuum. >> no, i feel like i've been saying this more, for a guy investing in emerging markets when gold, central banks pushing up gold since 2003, i've been long gold the last ten years when i look at what gold has had the opportunity in the last 15 minutes, had brexit, had trump, you've had north korea and you've had a dollar that basically went from 103 down to t 9d 2, looks like it could break lower, gold is up 3% during that time makes me wonder why i want to hold gold. i don't think you should go crazy on gold, sorry, folks.plao get defsiensive, do it without taking profit off the table. >> this is a game of ifs if this is true, if it's true

the missile passed over japan, what do you think the reaction is on the floor tomorrow. >> i think somewhat muted. i'm not saying this to be -- to be, you know, really cavalier about it, but you need a missile to hit something in order to get that selloff date. then you get your facts together >> or a response or you need a response a response. >> think about where the market was two weeks ago when we were really at the peak of this i can just tell you, emerging markets asked questions later. traded down h% we weren't close to a missile. there were some threats, chest pumping. >> during the middle of the day, one thing. we're going to have a whole night to see what exactly is going on when we trade the futures tomorrow, a -- >> there's no volume. >> i'm just saying i think you have a lot more. could see an overnight issue tomorrow i think you have a lot more digestic tive time. >> a failed launch is one thing. this is a provoking shot >> we don't know -- >> whether it was intended to be japan or not, it was a successful launch of a missile that went over japan

in my opinion, it's incredibly negative. >> you think -- >> i think it's a -- >> -- it's a start of a conflict >> i think it's a provoked launch in my opinion >> where it's just united states versus north korea, would you rather have a conflict where it's china, russia and the world against north korea? >> isn't a missile over japan effectively with the u.s.? a conflict with the united states >> and with everybody else >> correct. >> and with everybody else. >> so that's a little bit of my point, right i mean, so the response is going to be super important. so, let's see what kind of response we get out of washington quharks ki washington, what kind of response donald trump gives to this event i look at it and say that's a provoked response, a provoked launch, in my opinion. it was a successful launch if it wasn't aiming for japan, >> i think they're trying to be provocative. i don't think anybody provoked them to do it. >> i guess they're provoking us essentially for a response is my view. >> the timing is interesting given the events of over the

weekend, with the -- so we're fighting battles on many fronts. obviously none of us know really what's going on. i do think it's the incident is interesting. the response, to me, is what will drive the markets one way or another. >> the response from the united states -- >> right. >> the response from the united states or lack thereof. >> we're speaking on -- we don't know all the details if what we're saying isn't true, the response from the united states and other nations will be interesting. that, in my opinion, will drive the market moving forward. >> again, this is according to nhk, so we are all trying to get to the bottom of this one report out of ja fpan that north korea fired a missile that has according to nhk passed over japan at this hour. still ahead, we'll continue to dig through the destruction of hurricane harvey. up next, we've got an in-depth look at what it could mean for the auto industry. i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide. in the meantime, here's what's is else is coming up on "fast. let's make a deal. >> that's what gilead did today

spending $12 billion to snatch up kite pharma so which companies will be next? it's a special report. plus -- >> the suspense is killing me. >> don't worry apple fans might not have to wait much longer for the new iphone we've got the latest details on the smartphone maker's big event. much for "fast money" after this

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back bato "fast money." moves in the after hours session. the futures are closed the etf that tracks volatility index, that is up in the after hours session. gold is up after a very strong session today. we've got gld higher by just about .7 of 1% but, again, these are reports, according to nhk, that north korea fired a missile that has passed over japan. we're looking to get more detail and for that, we go to eamon

javers in washington eamon? >> reporter: yeah, hi, melissa these reports crossed the wires a little bit after the top of the hour litt little bit after 5:00 p.m. eastern time here at the white house. we're still waiting for an official response from the white house. you can imagine that this has triggered an enormous set of steps inside the u.s. government and over at the pentagon in terms of verifying the trajectory of this missile, where did to go, where did it splash down, what was the intent, what other activity are the north koreans engaged in right now or contemplating righ now? then a series of decisions about how exactly to respond to this clearly, a potentially provocative act by the north korean government. we'll wait for the official u.s. response, also the japanese and south korean response as well in the coming minutes and hours >> all right, eamon, thanks for that keep us posted here. in terms of other after hours action movers, we of course look at the currency market, the very liquid market that trades all the time we're seeing a spike in the yen, interestingly, against the u.s. dollar

the yen is traditionally a safe haven currency in this context, does that make sense to you, tim? >> well, it -- not really. in fact, i think after the move that the dollar had today, i would be expecting the dollar to rally here end of the day, you've had first of all, oversold conditions. i think the yen probably is something that's going to, you know, depending on what we learn about just where this rocket has gone, i don't know that the yen has to weaken dramatically, and yen typically, remember, positive carry trades have been where people have been borrowing then investing, borrowing and investing elsewhere, so you could see unwind of those trades which, if anything, could have the yen strengthening. when there's a risk-off moment, the yen tends to strengthen. >> all right let's bring in medal of honor winner colonel jack jacobs, joins us now on the fast line for me on this developing story. colonel jacobs, thanks so much for phoning in we do appreciate it. >> yeah, good afternoon. >> what's your initial take on this report and what it could mean in terms of provoking other

countries to join in some sort of conflict? >> well, the first thing is that they've done this sort of thing before the second thing is the united states has been ignoring them for a little while and they don't like that very much. one of the reasons they do this is so the rest of the world, particularly the united states, and its allies will take them seriously. so it's not surprising the third thing is that what's really important from our standpoint is not that they've shot a missile, but what kind of missile it is. you know, up until recently, they've been using liquid fuel rockets. they haven't had very much capability to use mobile platforms to deliver munitions, and lately they -- clearly, they developed solid fuel rockets which means that anybody including the united states wouldn't have very much warning, they'd be able to roll it out on

a mobile platform and shoot it from just about anywhere and we'd have far less warning at the end of the day, what the kim regime is interested in is encouraging the united states to leave them alone they're a continuing criminal enterprise they just want to stay in business to the extent that they can harass the united states into leaving them alone and not conducting a first strike to eliminate the regime, consolidate american influence on the peninsula, that's all they want. that's not all they want, but it's what they want in the immediate term and that's the -- that's the principal purpose of these histrionics and the missimissils i don't want to min niimize the threat there's clearly a threat countries like south korea, to a greater extent, japan are very concerned about the ability of the united states to defend

them, but at the end of the day, that's what the -- that's what the north koreans are after. >> colonel jacobs, what does this tell us about north korea's missile l technology and its ability to actually strike japan or some other close by target if it chooses to do so? >> well, that's a very good point. it would appear that their missile technology has been improving steadily, and improving to the point not so much that they can hit seattle or something like that, but -- but as you suggest, being able to hit some place in the eastern pacific with very little warning, extremely dangerous situation, and it's dangerous to the extent that it's trooifing k countries like japan, for example, to talk about rearming. we're not so concerned that we would conduct a preemptive

strike on north korea, but as north korea gets more aggressive, gets more technologically competent, gets into a position, perhaps, where it can fit a nuclear weapon atop a missile and strike -- have the capability of striking other nation states in the eastern pacific, it drives those countries to decide that the united states is not necessarily going to come to their aid and countries like japan, for example, want to be a able to arm themselves and be able to tee fend themselves against a north korean strike which may not have an american counterstrike so this is what's concerning less that north korea will be able to hit the united states because it's not likely they'll want to do so because with our counterstrike will be extremely difficult for north korea. >> colonel jacobs -- >> but they'll be able to strike our allies in the eastern

pacific. >> colonel jacobs, it's tim seymour. doesn't abe need a strong show or support from the allies and if so, what is that response >> yeah, it does because the japanese are very much concerned about what they perceive to be our -- maybe not our -- clearly not our inability, our reluctance to strike north korea. what's going to happen probably increase joint exercises in the seas around south korea and japan, and what should come as an affirmation of american commitment to defending japan. >> so what do you think the u.s.' next steps would be or should be? >> well, i think we are and should send an increased naval presence in the region, although as you know from the news, they

only have 177 ships and they keep running into one another or keep running into other maritime assets it's an extremely dangerous situation. we need to straighten that out an increased naval presence in the region and declaration from the national command authority in washington that we stand by to defend our allies and others in the region. without that, if there's silence in washington -- >> colonel jacobs, are you there? >> yeah, yeah. sorry. i lost the signal briefly. but without an affirmation of defense from washington, the next day or so, i think the japanese are going to get very much more concerned than they already are. >> absolutely, colonel jacobs, thanks for calling in. we appreciate your time and a nal sis on the situation colonel jack jacobs. we have a statement from

japanese prime minister shinzo abe, said he'd like to do all in his power to protect the japanese public after north korea fired a missile that passed over the country's territory. let's go to eamon javers who has yet more details on the developing story. >> reporter: that's right, we're getting a little additional information crossing the wires from nhk, the japanese broadcaster. they're reporting the north korean missile broke into three pieces and fell into the waters off of japan's hokkaido. hokkaido is the northernmost of the japanese main islands. the your tip of japan. so, just due east, really, of north korea, itself. little bit to the northeast of north korea. so if the missile were leaving pyongyang, it would traverse the sea of japan then over hokkaido island and out into the broader pacific ocean. the japanese media now reporting that north korean missile broke into three pieces and fell into the waters over japan's hokkaido

island. >> thank you, eamon javers meantime, nbc news reported that a south korean official told nbc news that south korea and the u.s. intelligence offices are analyzing the details about this launch there's still a lot that we do not yet know, but we are getting more details about this. i think the point that colonel jacobs is making about how the technology, the missile technology that south korea has -- that north korea has, excuse me, that north korea has, may be more advanced than we thought. may be progressing faster than we naught. >> i think the scariest part about that, most american, you know, americans don't understand this, it's not about them being able to send a missile over and hit the united states because currently within kae lly we ca. anti-missile technology that allows us to intercept that. the problem is they're very close, probably four, five years away from being able to hit a satellite. if they can hit a satellite, they can take down our anti-defense mechanism so we can't defend ourselves under those circumstances.

in my opinion, time is running out. >> north korea could have done, it went from just a u.s./north korea issue, even though the world was involved but i think they've expanded that now. they've included too many other countries. it's a terrible headwind for them i think it's a terrible mistake for them used to be just u.s. it's not anymore. >> right at the same time, it didn't make landfall yet i mean, it didn't make landfall at all if this is true, it broke into three pieces landed in the ocean. maybe that's the best-case scenario in a situation like this. >> i understand what you're saying but i don't know if success or failure in a launch is the actual point. it's going back to the original comments of the first few minutes of the show, it's the response from either the u.s., china, soviet union, south korea or some of the four. i can't speak to what it's going to be. again, the success or failure of the missile launch, but what do we do in response? >> japan's expected response, what are they expecting us to say in response? if it doesn't act into the same terms they're expecting, that could change relations in

general. a lot of moving parts here. >> i don't think anybody really knows where trump's red line is here, too. that's why two weeks ago, this was an issue for the markets, and to me, whether this was an icbm or whether this was a cap gun, it was aimed at japan and it blew up it blew up in the middle of the water. but the intent was there. >> right. >> so, you know, what's the red line you know, how are we going to respond? japan is one of our strongest allies their business leaders have been in washington standing skid side by side with trump making a big deal out of their support to america. i mean, you know, to underestimate the impact of whatever this was that there won't be a response from the white house right now, which feels like it is being provoked, this is the difference between this administration and the other one. they will take this personally and they will respond. >> i'm glad you mentioned china. do you think it puts more pressure on china just because it would be perceived that the world -- that more countries are involved than just the united states, so, therefore, they have to -- >> i think it has to. >> hasn't done anything so far >> this has always been

president trump, verbose as he's been on this topic, he also said it's a china problem they should be handling it more readily than they've had to already. and now with a bunch of other countrie really puts a lot of pressure on china. >> interesting to see what china's response will be in terms of tomorrow's session, we're at an s&p with just 2% from the highs. >> right. >> from record highs gld, by the way, is at session highs in the after-hours sessions is this a time -- take a look at this, i don't care if it's true -- actually, i do care it's true, but just the thought of that makes me maybe want to pare back risks. >> i understand what you're saying it does make sense it's logical to have those feelings and inclinations but i would say, again, the last seven years, i'm not saying we've seen things of this magnitude, but we have seen stories that rival this magnitude and the market has sold off within three to four days the market is back to making an

all-time high again. i don't know if that will be the case this time but history suggests that selloffs of any magnitude given headlines have been opportunities to buy stocks >> i'll say this, i mean, we're in the last week of the summer nobody has switched on volumes are very light the s&p today closed again below the 50 day it's been below the 50 day for seven of ten sessions really for the first time we had this period back in april where the s&p broke town technically. say what you want, i don't think 2% off the highs is reason for people to freak out. but i will just say, technical levels for this market, this is an s&p that's not been able to retake the bogey that actually stayed above for almost all of the post-election market environment. i think the technicals, you look at the transports, we talked about the things that at least have traders and people to look at some of the market signs. these are not reasons to say with this news, in the last week of the year going into the worst month of the year for performance in history, why you have to feel like a hero here. >> don't have to be a hero, you

don't want to make these -- this is a trading show. you don't want to be a hero. to guy's point, i think this could be a tradeable event here. >> sure. >> to all the points you just made. >> no question. >> we have seen some support -- >> tradeable event, though, steve, implies you're going get a market move here. >> you are, you are. i think you are going to get a market move, but to your point about the 50 day, we stopped on a dime on the 100 day so that's been your support. if that breaks, then you look at a 5% drop that gets you around from top to bottom down around the -- >> think it's interesting the s&p has not retaken that 50, this is the longest period since the election -- >> we retraced off that balance. >> the 100 flwas perfect there n reform of tax policy, we popped basically 1% in the s&p. so this is an s&p that's fragile, but the risk, to me, is still through the upside can you see a drop i think the drop is viable. >> we have yet to get a response from the white house about this north korean missile launch. we do have a response of some sort from japan. japan's chief cabinet secretary suga saying japan to take appropriate steps as needed regarding north korea missile.

>> what does that mean >> nobody knows. >> north -- here's another headline north korea ballistic missile an unprecedented and grave threat so obviously this is a developing story we'll bring you the very latest as we have it. meantime we're taking a break. still ahead, more onhi ts story, north korea launched a missile toward japan much more after this break well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

welcome back to "fast money. following the developing story that broke in the past hour that north korea fired a missile which has fwogone over japan, broken into three pieces according to nhk and landed in the water. let's bring in hans nichols, pentagon correspondent, for the latest on the story. >> reporter: we're waiting for confirmation whether or not this was an intercontinental missile or intermediate range missile. it went well east according to japanese resources, japanese press, went well to the east but the northeast of japan that oviates this threat that king jong-un made saying he would send it to guam which is the southeast. those are the tactical sides of this the fact it broke into three pieces could mean it was a high loft, which means they sent it high up in the air and brought it back down, could mean it

broke up during re-entry into the atmosphere north korea twice now has successfully done some form of re-entry you get different views on how successful that was. it did re-enter the atmosphere there's an open question on how maneuverable this was. the fact this splintered into three pieces doesn't give you a great deal of confidence this missile was successfully brought down back into the atmosphere. guys, taking a stem back on the policy implications, a week ago we had secretary tillerson two out of his way to praise the restraint from north korea we also as late as tuesday had president donald trump in phoenix saying he thought kim jong-un, president, leader, i should say, of north korea, was starting to respect the united states and it looks like there may be a little bit of respect coming from them, and then since then, friday night we had three missiles that were launched, projectiles. those looked like short-range, from north korea then the one today which seems much more serious because they lofted it up and over japan. the question is, what's the response going to be from the

allies in the past, you've had south korea, japan and the united states make sure they have a tripartade response. that's the key question to watch in the next 12, 24 hours also, what's the official diplomatic posture from the trump administration are they open to negotiations? do they want to praise kim jong-un? are they going to go back to president's trump fire and fury, his tough talk frankly his saber rattling we'll see what that does to markets, what that does to stability around the region. guys >> absolutely.nichols. hets bring in professor at the school of government mr. am bass tor, thanks so much for joining us tonight >> thank you >> our nbc pentagon correspondent raised a lot of issues in terms of what the response should be, what the response could be. what do you anticipate from the united states and from its allies >> i think first the united

states, the trump administration, will move very quickly to remind the north koreans that there's a defense treaty between japan, the united states, from 1960. the united states pledged to defend japan and as your correspondent said, also pledged to defend south korea. so i would anticipate a strong statement from those three governments in seoul, tokyo, and washington, to let the north koreans know this is unacceptable second, you'll see a quick move by the united states to convene an emergency meeting of the u.n. security council to try to produce international condemnation of north koreans. i think, third, to go back to xi jinping and the chinese leadership and remind them that the north koreans right now are engaged in very dangerous, very provocative activities and it does require the chinese to use some of that economic leverage that they have on north korea. i think that's where you'll see president trump and secretary tillerson hit. >> do you think this is enough

to bring the chinese into the fray in terms of further exerting its economic leverage it's been reluctant thus far. >> it certainly has. we've seen some movement from the chinese. they clearly are frustrated, beijing, with the north korean government they have not invited kim jong-un to beijing they believe he's barely in control. i think that it's one thing for the north koreans to be threatening, as they have for many, many years, actions against south korea. it's another to fire a missile across the territory of japan. the chinese have a very uneasy relationship with the japanese, themselves, but there's major trade occurring, of course, between china and ja fpan and south korea and china. the chinese don't want to see that interrupted i think you'll see the chinese join the condemnation with the u.n. >> on the rules of engagement from defending japan, the treaty's in place, this was a missile clearly launched toward japan. does there need to be a direct hit? this obviously missed them,

thank god. i look at it, say, rules of engagement, they sent a missile toward japan. >> japanese airspace. >> don't we have an obligation to make a stand and defend directly based on that scenario? >> well, you know, the way this works is the japanese make that call the japanese have a very powerful military, as you know, particularly their air and naval capacity sophisticated sense of their own defense needs and if they felt that it was necessary to bring the united states in, they would certainly do that. in this case, you know, countries in the region are accustom to this provocative bravado from the north koreans but this i think is different. it's different because it was fired over the territory of japan, not just into the sea off the coast of japan and clearly, if the japanese want a strong statement from the united states, they get it, if they want strong action from the united states, of course the united states would have to consider that. that's not the case right now.

>> is there room, still, mr. ambassador, at this point for a diplomatic response, one that does not push the limits in terms of engagement? >> you know, i think ultimately where secretary tillerson has been headed is where the obama and bush administrations were. ultimately, they do want some kind of negotiation to see if they can freeze north korea's nuclear program in place i done think anybody believes we can convince the north koreans to give up their nuclear weapons entirely at a moment like this, when they've done something that's so egregious, so wrong, so dangerous, i think you're going to see a united front from the u.s., south korea, japan, and china. the russians will have to join in a security council to condemn this and try to make sure kim jong-un does not repeat it because as your questions imply, the japanese have a right to defend themselves. south koreans have a right to defend themselves. the united states has defense treaties with both countries it cannot be in the interest of north korea to see an escalation

of violence that would lead to some kind of conflict. i don't think that's where we're heading right now. but if they continue this, then, of course, those governments are going to have to decide how they defend themselves if any of these missiles actually hit cities or killed citizens or harmed the population in any way. >> mr. ambassador, thank you so much for phoning in. we appreciate your analysis. nicholas burns, former u.s. ambassador we'll have much more on this when "fast money" returns. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade.

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welcome back to "fast money. want to go to hong kong and check in with cnbc's business news the markets, of course, set to open -- actually we just lost him. we'll try to connect if a little bit. in the meantime, we have a lot to digest with these reports or actually it's confirmed now north korea fired a missile that has gone into japanese airspace, flown over japan, broken into stlee pieces and fallen into the pacific ocean. in terms of tomorrow's session, what do you watch first, tim >> emerging markets traded up 3.5%, ask questions later. this to me is the same news as a couple weekses ago in the same marketplace. for asset classes.

some have had a great move also the dollar. i think the dollar strengthens on this. no question about it those are the things i watch how big are those moves? they may be trading opportunities, absolutely. i don't think we're in a different place than where we were two weeks ago and if anything, trump's red line has been that much closer. >> hold on, we have reestablished with jeff cutmore. jeff, what's it look like in asia in terms of the open? >> well, it's interesting, we saw yesterday at the start of the trading session the south korean markets actually reacting to that news, two or three, potentially, missiles being fired here i think what we'll get early on in the session, of course, is another bout of risk-off trade having said that, you know, we did finish positive on a lot of these markets by the end of the trading session here, so increasingly investors in asia are willing to price in these missile launches back to you, melissa. >> all right, geoff, thank you,

geoff cutmore in hong kong derisking your portfolio >> gd dprx, tadax. >> xlu if you want to redisk. >> stick wit >> gold. >> "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 other people want to make friends. i'm just trying to make you some 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. nobody wants to profiteer off of a hurricane when you're dealing with a natural disaster that's killing people, th