idea that semi conductors are going to be relative outperformers. they were bouncing yesterday micron has always been a fast moving quicksilver animal in the stock market >> it has the same consistency as people using pinterest. >> yes, those little burst >> we'll hand it over to "fast money" for more coverage starting right now "fast money" starts right now. live from the nasdaq overlooking new york city's times square i'm melissa lee. tonight on "fast," mikey just taking a big led lower we'll tell you what sent the stock moving we'll have full coverage throughout the hour, sara eisen at the stock exchange is all over it. plus a major biotech bust, one stock falling 70% off a failed drug trial. the ceo says he would do it all again. what's gotten into him and

should you buy the stock, later on and a stealth rally in one group of stocks taking investors on a wild ride how you can get in on the rally. first, redemption for the tech center, big tech coming back with a vengeance, the best performer today by a long shot, and apple having its best day in nearly two months, up 2% after what's been a tough month for the stock. take a look at micron soaring in the after hours session, the chip maker reporting earnings moments ago, giving nvidia a boost. will we take a look back on this day and say it was the day we wish we bought the -- >> i'm not sure that this is a bounce that's going to leave everybody else in the dust i can look around some parts of tech and say some things weren't that great global tech, which has been just as powerful, is not very strong today. there are levels at apple. certainly people say i can own the stock at this multiple based

upon a pullback. i'm not terribly convinced, if we are in a moment yesterday, i don't know that we're out of that moment today. >> if you look at what the other markets are doing, to me, people are using tech as an atm machine, moving into the industrials, moving into the oil patch. i'm not sure those moves are done therefore the tech move may not be done inform in apple specifically, last friday i said you could buy a third position i would probably hold that third position i'm not at a point where i want to be adding any more. i want to see how this plays out the. one day is not making a trend here there does seem to be dispersion within the f.a.n.g.'s. >> the biggest story of this week is month-end rebounce the selloff in tech is a product of that. i think there's couple of things going on people have enormous profits alibaba is up 90% year to date

but there's a rebound that could be tremendous month-end, you don't want to buy it before then >> if that's so, would you think that happens before friday >> that's the question, that a lot of these funds do it sort legging in for the last week of the month, so it's very hard to tell i do believe the risk to buying too soon is probably too great to take that chance. >> i would agree that third quarter coming to an end, folks, we're getting into the home stretch for the year if anything, you wind up showing these guys the balance sheet >> they're locking in a lot of profits. yesterday, on a daily basis, was probably one of the worst days for hedge funds. i think that spooked a lot of people and they can't show, because it got to be an outsize position. if you have an x percentage in apple, yes, you want to show it on your balance sheet but it's too big on your portfolio so you have to trim that position >> yesterday we were talking about technology being the leader to the downside today might be a little different. you were in that camp.

do you feel any different today than yesterday >> not on the technology side. i feel like yesterday being down, i feel like these are still good valuations for companies like alphabet, facebook for, you know, amazon and netflix, it's hard to make that case, because the multiples are sky high but i am a little nervous about the banks a little bit i'm still very long. so i haven't really -- you know, i haven't moved my position there. i'm a little nervous i was hoping to get a little bit of clarity today >> didn't you? >> i don't know. i could make a case either way i thought my take on the balance, a tad to the hawkish. >> everything seems a tad hawkish from janet yellen. it's a big day i think we've got december all but baked in now in terms of a rate hike. financin if anything, the fed is good for financials here and not so great for tech if you think about what the fed

is always at risk of doing, and i'm not saying they're close to doing this >> i'm not sure how you got hawkish out of today, i would have thought you would be more dovish from her statements >> i'll pick up my notes while brian talks. >> look what the market does, particularly the james like netflix, they have a high multiple when you talk about a higher dollar and higher rates, that makes investors lessing inin wo pay up for stocks. equity risk premium, exactly stuff like an alphabet, like apple, those are okay. but netflix and amazon are the ones i would stay away from. >> they are trading in blocks. i've heard people debate, this passive investment angle to the market where you're buying all of tech together microsoft fell out of bed the same way apple fell out of bed you can't make the same case

what was microsoft worried about? they weren't worried about the iphone 8 they weren't worried about the x. >> i don't want to joust with steve. is it a crazy thought to say we're blanketing tech with one paintbrush when in fact there's a lot of tech, old school tech versus new school tech, some have fallen into staples category to behave like a staples stock, apple as well, very different than tech today is nvidia. tech today is blizzard tech today are high end names that are like uber with growth that's the conversation to have, are those stocks dead in the water as opposed to big cap tech >> dead in the water because there will be a rotation in the markets precipitated by the view that rates are going to rise and change how you view high multiple stocks?

>> layered into the fact that these multiples are absurd you're at a place, it's difficult to argue, we've argued that nvidia produces everything from bitcoin chips to autonomous driving to whatever. >> if interest rates move little, to that part, i don't really quite get also to the extent that the fed raise is because of strength in the economy, that's a positive >> that's a positive she really tip toes around it. we have the ability to pull back that's what kept this market on its heels for so long. when you look at the chip space, nvidia we looked at it last year. every yearwe defies the laws of gravity. just buy the whole chip space. >> i appreciate that you all have different views on what janet yellen said today, which is fascinating to me

that's why there's almost no market reaction to what she had to say i don't know we saw reaction rates in the dollar >> we did. i think in this environment we can argue about how much you should own tech, how much oil. why don't you buy them both? i'll take a little bit out of my tech portfolio, i'll put it into industrials, i'll put it into oil, i'll have a hedge in case tech falls apart, and my tech will probably do a little bit better because now i have a little weaker dollar, probably some lower rates i think you balance your portfolio. i don't think this is an a market where you're all in on one sector >> i nibbled back into some steel, u.s. steel is down substantially off those highs. and emerging markets, ultimately they should benefit on this environment. they pulled back 3.5%. i added a little bit to the position we talk about position sizes this was 20% of what i would trade tactically for an e.m. basket e.m. closed lower than

yesterday. this is where folks should be concerned about risk >> karen, what did you do today? >> not a lot today, actually nothing moved enough for me to make a difference. so, you know, i probably would look to maybe take a little money off the table selling up identify cal side calls >> a news alert on twitter >> reporter: melissa, this news just dropped from twitter, it could be the days for that 140-character limit could be ending twitter is saying they're going to start to test, they say, with a small group of people to start here, the ability to tweet with 280 characters in languages outside of japanese, korean, and chinese. those will still have 140. why the difference, twitter says, in some languages like japanese and chinese, you can convey about double the amount of information in one character as you can in many others like english. but now for english you'll be

able to -- at least a small group of people to start will be able to test this new longer limit, 280 characters. twitter saying that's important because they have found when people don't have to cram their thoughts, they said, into 140 characters, and i guess have some room to spare, they see more people tweeting, saying they're trying to try it out with a small group of people before making a decision to launch to everyone melissa? >> thanks so much, josh lipton you see the pop in twitter shares in after hours session. a couple of thoughts, it allows more nuance in conversations in a day and age when twitter is used so often to project controversial views. but also, perhaps for promotive tweets you have to wonder if this allows more bandwidth for promotive tweets >> i've been in twitter, i cut it down to 20% position right around these levels, a little bit lower. i doubled up on it let's say i had a 40% position on my initial size position. i think you're still hoping for

a buyout that's never a reason to buy the stock. mid-20s used to be the valuation of a quote unquote buyout. now it seems $20 is where you're looking for. i still think it's a buyout. >> i've been in and out of twitter and disappointed every single time. i'm not convinced if you go to 280 or 281 characters, that that's going to change this is not the type of innovation i'm looking for for twitter. i'm looking for them to embrace the fact that they're the new global newsroom. embrace that, be america's home page >> america's newsroom, people are looking for snippets, they're not looking for long articles but going from 140 to 280 really means you can get more content in there this makes it a media company. it's already a media company, but think of "business insider."

>> the problem with twitter, they should have been instagram, they should have snap. they have the ability to be all of these things and they sort of let other people take their money and run with it. >> they are a smaller version of quick bite >> you don't have the ability to edit the way that other companies do it's a lay-up here if i only want to see your media expressed, i should only have certain people that i follow that i only see their media, i don't see anything else. it should be instagrainstagram, should be snap i don't know why this is so difficult for them to figure it out. >> what astounds me, if you told me that i had a product that the president of the united states used, that every single sports team used, that sports was live on every single day, they're crazy. they can't turn this thing around it's probably the most ubiquitous product out there yet

they can't monetize it >> and it was for sale, allegedly. nobody seemed to want it maybe it was a bid/ask spread. nobody seemed to want to buy it. it's curious so i don't know. >> i hold on to a position in twitter. i think it's fantastically valuable on an intrinsic basis the right partner is either not ready and playing possum here, but the ability to monetize, why can't you have an advertising model on twitter it's the same thing. >> why can't you >> i want an advertising model >> they should do it they just haven't. >> twitter shares up on the news that it's expanding its field to 280 characters coming up, shares of nike giving up all its after hours gains, down by 2%. the company conference call is under way. we'll tell you what was said that's got investors hitting the sell button. plus general motors at its highest level in four years. the stock has been on a tear

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welcome back to "fast money. check out the xhb homebuilders etf rallying the standout, i-robot, surging more than 4% whirlpool, williams sonomaup more room to run here? i know you're in some. >> i'm sill in pulte this is the seasonal time to buy homebuilders they make the most money november through march i'm staying long i did sell my kb homes pulte istill own >> are you worried that people are -- >> here's the thing. i'm not sure interest rates are going that much higher, right? you could have this effect where interest rates start to go and people go, oh, i've got to it into the market right now. you kind of have those front loaded sales maybe that's what's happening.

look at itb, the etf for the home construction industry xhb has the home repair. itb are break out today, a five-year breakbreakout. to me that's generally positive. >> i don't think the fed knows about balance sheets debt to gdp in this country is higher than it was in 2007 they can only do so much i'm told the housing sector is a tail end to the economy. i think they're much more aggressive than in the first few years after the recovery, they're using their capital. they've had some buybacks. housing starts numbers this morning. the bottom line here is there's not a great supply of houses that's part of the issue, one of the reasons why the housing market -- affordability is a big deal that concerns me >> every housing recovery happened in a rate-rising environment. people's knee-jerk reaction is to sell housing whenever you see the chance or likelihood that rates are going to rise. that's an opportunity to buy,

not get sucked into selling. another equifax executive bites the bust day, rick smith, ceo, the latest equifax executive to, quote, retire in the wake of the massive data bribery this month he could walk away with as much as $18 million in pension benefits he follows the chiefinformatio officer and chief security officer who announced their retirements last week. >> what was that music >> retirement music. that he sa that's what you hear when you retire >> it's called slipping out of a burning building, quietly. >> and that's the song you hear when you slip out of that burning building >> i read retirement as he wants to spend more time with his lawyers. i don't know how else to read it >> yeah. >> it's ridiculous on its face, why would you even say that? i read the attachment to that 8k it was purposely somewhat vague.

he's going to be working for the company for 90 days, it seemed like, on this issue. i think this i'm not sure if he after that -- what happens is he indemnified for potential losses >> meaning is he on the hook to be sued? >> or just the legal bills along could be big i don't know that's unclear however i do think for the company it's a good thing. when he goes to get massacred on capitol hill, he has already fallen on his sword, or retired on his sword, however you want to say it. so i think the new management, and i know it's an interim ceo, now has some freedoms. remember what they did to stumpf, that was an absolute disaster >> ultimately you did an interview midday last week, ultimately how sticky are those clients that they have to me they were very sticky.

they have an oligopoly you knew you had a bottom in the stock, but this thing leveled off. it was -- it's probably got another 8% >> i think rick smith provable would have stayed if he was allowed to, retirement is a euphemism for he was shown the door the analyst community is not happy to see him go. outside of this event, and i'm just telling you that this is a long running ceo who had a lot of respect from the analyst community, who they don't have anyone to replace him. to say that's good news is not true seeing this guy walk out the door -- i totally agree with your approach of what's going to happen and how partly clourotoco down but it cheer and say this is the best thing for the company-- >> we've seen this story unfold before the analyst community was so ready to say for valeant, they said he was magnificent, and the

business -- no, i understand, but it's this notion nat ceo is gre that the ceo is great and the business model won't change. the business model will change and the ceo was shown the door >> it's a great point. >> it's sort of this mental lock on believing that the business model will not change. >> right there on kool-aid if they had a buy on the stock, they believed this guy was their greatest guy i do think valeant's business model was -- this was not a business model question. you can get into how they were insulated. >> a great point, the analyst community right now will have to defend the heck out of this name >> they're defending their own rating >> they're going to defending their own ratings. the stock has bounced, it hasn't bounced back as much as you think, because no one wants to catch anything

but this thing still has a lot more upset >> really? i'm not sure i'll buy this just because the analyst community will have to defend their position you might get a pop out of this thing but i think the brand is severely damaged here. i would stay away completely ahead, the stock was higher before losing its gains. will management comment on the growing ncaa bribery scandal i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide. meantime, here's what else is coming up on "fast." >> dude, where's my car? >> if it happens to be gm, shares are at four-year highs and there's something to suggest they're going even higher. we'll explain. plus that's what happened to a major biotech stock after its alzheimer's drug failed. so why did the company's ceo say 'l would do it all again wel hear from him when "fast money" returns whoooo.

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welcome back the s&p and nasdaq eked out small gains while the dow posted its first losing streak since june coming up, biotech stock axovant tanking. the ceo says he has no regrets we'll hear from him. plus which of these names could rev even higher. first, nike sinking in after hours session, taking a big leg lower. sara eisen has been monitoring the call, hi, sara >> reporter: hi, melissa so far we've heard about the

usual pep talk from the ceo about innovations nike has coming down the pike, things they're excited about including the new nba deal they're doing, unveiling the new uniforms, that they're incorporating technology into the fly leather which parker is very excited about, called it a game changer, says it's a better carbon footprint way of making leather, and lighter this is the typical flow of the nike conference call he tries to rally what is an unenthused investor base to prove that nike is not in an innovation lull, which is one of the concerns on the street the president of nike spoke specifically about the jordan brand, he just said the global appetite for jordan remains extremely strong, pointing to china. there were some questions about that as well, because we just got word from mpd last week that adidas just took the number to

most popular brand spot in the united states from jordan. nike brand remains number one. nike, adidas, and then jordan brand, talking about the strength there in general these executives are talking about the strength they're seeing abroad. we got a 12% lift in sales from china, for instance, double what analysts were expecting, versus some of the changing landscape in north america that was the weak spot in this report sales were down 3% in north america. trevor edwards, brand president of nike, calling the landscape here promotional we did see that in this report with lower gross margins clearly nike is at a point of transition, trying to respond to a changing retail landscape, a slowing athletic category. a number of executives using the word "style," melissa, a lot that speaks to what's going on in the category, the more stylish, fashion forward athleisure which adidas has been dominating, is winning out over

the performance athletics. we'll continue to monitor this analysts will start to ask questions. hopefully we'll get guidance numbers from the cfo soon. of course everyone wants to know about popular topics like the nfl controversy with the president. maybe a question about what we learned today, those fraud allegations surrounding one of its competitors' executives on the kickbacks and bribery. mostly it will be around how they plan to turn around north american business, which could be one of the reasons the share is under pressure. they've maintained and controlled expenses to try to get that bottom line number up, because sales came in pretty much in line back to you. >> thank you, sara eisen, covering the nike conference call in the after hours session. tim, you've been a shareholder, what do you make of the quarter? >> north america, we know there's an issue for people who think that these guys are going to be worse off from the retail landscape than

adidas, the trade is to be long nike and short adidas. that was not the trade adidas was a great one i think nike is in control of their destiny. to me, the innovation issue, and again, fashion over function, fly leather, steve, i know you care about that. >> i don't know how they could be in control of their destiny you had a bunch of bankruptcies. everyone knows about that. so it created a glut of inventory on the market. but they're in stores where they never were before. they're in kohl's. they could drive a much harder bargain with nike. my fear is their margins could compress because kohl's has them over a barrel. >> but kohl's doesn't have an e commerce model >> but now we have amazon where nike is trying to do that. amazon is trying to sell direct

to the retail purchaser. and then now you have on top of it a distribution channel in all of these major hubs now. where in the past it was a sports authority, now you have a kohl's, a target the same amount of product, bigger distribution centers. >> now all of a sudden they drive margins down where you had a better deal when you had less inventory on the market. >> assuming that nike doesn't have control over the pricing at which it sells at kohl's >> exactly >> doesn't foot locker drive a much harder bargain than kohl's? >> of course they do all of a sudden for the first time, when kohl's begged for your product before and you never wanted to give it to them and now you have it. >> i don't think you have to sell to kohl's this is not the issue. the issue is that retail is drying up, not that kohl's is suddenly going to be a difficult seller >> so either i'm right or you're wrong. >> either way. >> we'll see how it goes

>> it was up big during the regular session. it was up five points. what's your extrapolation, if any? >> the north america exposure is very big, a majority for them. nike talking about pricing pressure, promotional environment, that's not good as well then the third thing, you know, to the extent that nike is more direct to customer, they're not going through -- >> they're more profitable >> for more on nike, let's bring in liz dunn, who has been listening in on this call, a founder and ceo of pro forma liz, why do you think the stock is down so much in the after hours session? >> i think the call has been interesting so far they're really highlighting the innovation and all the things they're doing to play that i have triple/double strategy. it sounds like they feel they're right on track the quarter was a little bit poor quality

they made it on sg&a, lighter sg&a than was expected if they can gracefully manage this digital transition and this transition to direct to consumer, it's something we haven't seen from any other brand. given the amount of fear heading into the quarter with all the earnings that we heard from everyone else, this is a pretty decent quarter at nike >> is there any concern about the margins? sarah was talking about the margin pressure that nike faced in the quarter this quarter was also back to school does that gibe with what we've seen from nike in the past >> there's obviously heavy inventory in the market with a lot of these retail partners with their inventory was up 6% versus flat sales. they said some of that was pricing. i think the important point though is longer term there is a margin opportunity as they do make this shift to direct to consumer which should have higher margins >> what is your central laciext for the under armours of the

world as well as the athletic wear retailers like food lockers and finish lines >> i think the market is a little bit soft. i think innovation is really leading and it's as competitive as it's ever been. certainly nike is facing it. i think the most important thing i heard on the call so far was they said retailers who can't get with the transformation and get with the program in terms of this triple/double strategy and can't enhance those retail experiences will be left behind. they're not throwing all of their wholesale partners out but are saying some of them won't be key to them going forward. >> thanks, liz, we'll check with you later for more developments, liz dunn on the red phone for us >> you have a company that's in transition here. 52 has held for the last month or so, it's got to hold now otherwise the stock has problems ahead, good morning breaking out, surging more than 16% in the last three months. we'll tell you what's behind the

move plugs ts the ceo of the bioh stock which tanked today says he would do it all tomorrow more "fast money" after this

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welcome back to "fast money. general motors shares revving up as the stocks are at near record highs. let's get to phil lebeau for the details. >> reporter: hi, michelle. there are very few days since the ipo in 2010 when general motors club closed above $40 and the recent run, up 16% in the last three months, driven by a few things first you've had analysts upgrades deutsche bank, morgan stanley, they've been very positive in notes issued in the last week regarding general motors and mainly they're focused on the fact that gm has a mobility platform a lot of options within the issue of transportation mobility that they could leverage in the future, specifically when it comes to electric vehicles and autonomous drive vehicles. cruise automation is a good example. where then motors bought cruise automation a year ago for $1 billion. since then they've quietly been researching and testing

self-driving cars in san francisco. the belief is when the time comes to monetize the potential behind self-driving vehicles, general motors will be well-positioned. that said, take a look at general motors versus its competitor from the motor city, fiat chrysler. why is fiat chrysler up 60% in the last three months? because everybody believes sergio marccione will make some type of a deal to sell the company, merge with an another automaker or potentially a tech firm, potentially with a chinese oug automaker. if you're a general motors investors, you finally have a little momentum. we haven't seen this since the ipo in 2010. i remember back then, melissa, the day of the ipo, how many people said no doubt this stock will be up to 50 or $60 in a couple of months that's not been the case >> no, it has not. phil, thank you, phil lebeau in

chicago. we've had a couple of gm investors. hold on to it. >> hold on to it i think the multiple here, all the reasons i like to be for the multiple, just ridiculously low. i think what has happened, and i think it's a good thing, is auto sales peaked and everyone was afraid, what's going to happen to gm after auto sales peaked. >> and they continue to reaffirm >> and we've seen good traction. i still like it and am holding onto it. >> gm's got a big problem. it's a perception problem. that's the only issue i see. these guys are in tomorrow's autonomous market. >> meaning it's not enough of a technology >> yes these guys, these companies are dinosaur in the internal combustion engine world. phil talked about when this thing became public, we were calling it global motors this is the best position global auto brand outside of bmw. north american pickups is

underrated auto taxis, they'll get into their car of the future world. >> i would be skeptical. we've had a tremendous run off the bottom partially because of the hurricanes, we know there's going to be some kind of replacement there. if interest rates rise even a little bit, a lot of this has been financed by subprime. to me the entire sector is risky. i would be a seller. >> that's the key, how many cars got taken off the road with the hurricane. was it 500,000, was it 1 million, is it more than that? that's really, really effective to a lot of these car companies. you know the way i'm playing, you've seen used car prices sort of recovering here and actually ticking higher i'm long avis budget i only got 90% more to go. it's up 10 already >> stock trades at 6 1/2 times earnings with a 4% dividend

yield. what is problem here i agree, you look at the chart of gm, august 17th was its last round, up from june of last year, still had a big run before that i agree the hurricane was a catalyst >> axovant tanking today after a failed drug trial. the ceo says he would risk it all to do it again plus, who has the edge when it comes to your money, man or a ecl e? spiareport from london more "fast money" after this but some people still like cable. just like some people like banging their head on a low ceiling. drinking spoiled milk. camping in poison ivy. getting a papercut. and having their arm trapped in a vending machine. but for everyone else, there's directv. for #1 rated customer satisfaction over cable switch to directv. call 1-800-directv.

welcome back to "fast money. shares of axovant tanking nearly 74% today after failing to meet a key endpoint in the phase iii trial of its key alzheimer's drug our very own meg terrell interviewed the ceo today. meg, what did he have to say >> reporter: that's right, mel, it was a closely watched event and unfortunately bad news, axovant's highly anticipated trial of a drug to improve cognition in mild to moderate alzheimer's failed in today's study. david hung is no stranger to setbacks in alzheimer's disease. before he joined axovant in april, he sold his company to

pfizer for $14 billion, one of the biggest biotech deals in the last several years then he faced the same problem he faces today, a failed trial he had gained a big reputation as a turnaround artist and orchestrating the sale to pfizer the day he joined axovant, the company's shares rose 30%. what's he saying today after axovant's disappointing news even after his second big setback in alzheimer's, he says he would do it again >> we knew this is a risky place to be. this is one of those areas, you just can't let the fear of failure, of losing a battle, deter you from entering the war. this is an incredibly important disease. it's going to be one of the great scourges of our society. someone's got to take those risks. we would willingly do that every day. i would do it all over, tomorrow >> next, axovant is testing the

same compound in another condition. hung says there is still reason to believe it could work others in the field are skeptical about that, and some analysts are questioning whether the company will need to buy other assets in neurology, mel an uphill battle in alzheimer's, as it always is. >> meg, there are three other separate drugs in the pipeline what stages are they in, are they close to face 3 >> reporter: that's right, they are in earlier stages. i believe the second one in the pipeline is getting close to later stage clinical trials. i'll have to check on that for you and get back to you. >> all right, meg, thank you, meg terrell on axovant >> disappointing this is why i can't own -- i just can't wake up and have something down 70% i give that guy credit, first for coming on, it's a terrible day, i don't know how long they've known about it, a couple of days maybe. i hope we find a cure. there's been nothing >> you could own -- >> i could own ieb >> exactly we've said that. you play the ivp, it's up 25%

year to date you don't get these type of risks. thank god we have companies doing this type of work. we want them to do this type of work you just don't want to have this granular exposure. so even the xbi, you don't get these days with the ivp. >> i can't live with the down 80 >> these are very hard to trade. listen, even for me, and i trade -- this is crazy >> i will say ivb is also traded defensively during whatever we're calling this period. a lot of people would be linking the ivb to a tech play it's not i'm long gilead. technicals are a guidepost, not a reason to buy a stock. it's been trading up, it's been consolidating, often a very good sign i think the fundamentals are very good. >> despite axovant's massive

plunge today, options traders are betting big on a turnaround. >> a rest canisky space we saw well over five times the daily options volume after that news came out. the october 7.5 calls, over 3700 had traded so far, average price. those are obviously best if the stock could rebound above 8 and obviously risking a whole lot less than reaching out and trying to buy the stock. >> mike, thank you, mike khouw for more options action, check out the full show friday 5:30 eastern time ahead, nike now down 4% in after hours, the company lowering guidance in north america. we'll bring you the latest in a conference call. ahead, the embattled man versus machine who has the edge leslie picker is in london with some clues >> reporter: it's almost 11:00

here on monday night the computers are just getting ready to wake up we'll tell you if that's a good b tngcongp xt on "fast money. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.

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hi, leslie >> reporter: hey, melissa. that's right, we're here at the world's third largest head fund. after their assets are in quant which historically has been in a black box. this is man's attempt to explain the small subset of data that the computers are sifting through day in and day out now, this is something that they have used to explain the process to lps it doesn't explain whether technology doesn't provide the edge that it does in the rest of the world. if you look at returns over the one-year, three-year, and five-year time horizon, they tend to overperform the broader industry why what it built up $1 trillion in assets? it tends to provide more stability in the long run as well as downside protection. and we spoke with the ceo

yesterday who told us it's the humans who provide that big outsize returns where is it's the computers that produce smaller amounts of alpha but greater differs fictiversificat. >> humans are really good at getting a big edge on trades but not very many. the reality is we have one or two good ideas and that tends to affect a number of things. humans are good at the big edge but not at the number of trades. >> reporter: now, for the last three years, they've been employing machine learning for some of their trading. they say it's already producing better returns than that of just traditional quant, melissa >> thank you, leslie picker in london for us. karen, as a human hedge fund manager. >> thank you i just wonder, a lot of capital is clearly coming into the space, right

and learning how to do it. machine learning how to do it with the human big idea attached to it. at what point are we in the cycle of so much capital comes in that competes away all the arbitrage opportunities that exist. i don't know but that will happen >> it would seem to me we're getting close. man group has been doing this for a while. a lot of people have been doing it for a while machine learning is something new. again, you're looking at those small returns. that's the alpha being arbitraged away in this. that's not to say it won't work. but i think the best combination, if you're at home and you're trying to take away what do i do with my portfolio, you want to worry about risk/reward. that's what computers do best. up next, the latest from nike's conference call

shares of nike now down almost 4% in after hours liz dunn has been monitoring the conference call. what's your take here as nike hovers at lows >> the only thing that came out of the call so far is they're expecting a little bit more pressure from the u.s. business, which looking at the retailers that have reported, you can't help but expect that busy looks

like it's shaping up to be softer in north america. everything else sounds great >> what would you tell clients before buy it >> i try to stay away from those kind of clients these days i think this is a long term story, and it seems very much intact, the transformation that's going on. it seems like they're bullish about it, maybe even more so than they were when they announced the consumer directed offensive a few months ago >> thank you, liz dunn of pro forma. tim, what do you do with nike shares tomorrow? >> 52 is an important low for the stock. it doesn't mean you sell it at 52 maybe this is where you start setting up stop losses i don't do anything. >> gm. if tesla is not an automaker, gm is great valuation. >> gentlemen my energy exposure, golar, very cheap. >> i'm in the energy space

exxonmobile here >> pulte homes, this is the time to be buying homebuilders. >> i'm melissa lee thanks so much for watching. see you back tomorrow for more "fast money. "mad money" with jim cramer 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 more work and i promise to help you fine it. "mad money" starts now hey i'm cramer welcome to "mad money. welcome to cram america. other people want to make friends i'm trying to make you money. my job is to educate and attach, call me at 1-800-734-cnbc or tweet me, small characters