trying to bridge that a bit and put the market on alert. >> well, it's been great to have you courtney and look forward to tomorrow when of course we will be dissecting reaction to that jobs number. but for new that does it for "closing bell. >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. pete najarian karen finerman, tim seymour. tonight on fast, fangs fall from grace. getting wrecked today but there is a name the traders say is a screaming by plus td ameritrade going crypto giving investors what they want. more bitcoin steve quirk explains why they go all in on bitcoin. but start with the rate shock. >> scarey music. >> perfect storm on wall street as rates go parabolic. stocks slammed the stocks sinking about 350 points as the lows of the day.

as wall street is finally starting to panic about rising rates. is there more rate misery ahead and where do you run for cover pete. >> i'm not a run for cover guy i will say this. there is opportunities out there. >> but you have never run for cover in your life. >> not a big run for cover guy when we hear tomorrow the numbers tomorrow we might have a good chance of seeing the market pulled back even further once again. today. >> even though the numbers will be good. >> they will be good. >> good news is bad news >> good news is bad. we get a sell off and maybe we get to the levels we hit today down 360 at the lows i tell what you stood out today was the way the volatility spiked so fast i mean the fact that it went from 1160 into the upper 15s that's a big jump. how long can it last we get the big spikes, pull back big spikes, last show short periods of time. that's something we have to be aware of i know karen can speak on that i actually add added to financials today

the reason i did as we get closer to earning season i think the numbers will be great. i think they exceed obviously we need the rate environment to slow down. if it continues at this rate the market including financials gets hit. >> pete. >> develops it i. >> not running for cover has proven right but i will tell you here is what concerns me. not only do we have -- i would say escalation in the trade war rhetoric and you had trade minorities across asia saying prepare for the worst. hong kong told the economy prepare for the where is the we forget the treasury fund something part of why rates are ier. we are basically issue two times as much long-term treasure ris in 2019 than last year there is a lot of pressure on rates from all over. including the europen central bang i don't know they go to 2.50 overnight. but to expect that rates. >> 3.50. 2.50 would also be scarey but in different way. i also think we have had spikes

before but they haven't been one-day moves. i don't see why with positioning where it is which you jump into the market. >> i guess the important rate hike to look at was january, the 10-year treasury yield was 2 peart 4% quickly at 2.8%. that point in late january when u.s. equities had the steady march up for a few weeks really thought about what do valuations look like? what do earnings look like what is the tank from the tax cut? what's global growth look like global growth, dan. >> sorry. >> when you think about what's going on, now, i think that when we had the ixie, the dollar index retreat from 9.5 a few weeks ago. people were like it's done going back lower. >> without the rates going higher, dollar higher now do we have further pressure on emerging markets is that what makes against u.s. investors think about how important it is for our multinationals to have this global synchronized recovery which doesn't seem to be in place right now. we are the only place in time that ism data looks great.

but look at other data we see around the globe >> are you avoiding buy. >> no. >> you are not running for cover. >> i mean, today was an awful day. p and o wise but today in terms of running for cover. i was selling cover. i own s&p puts for a spike in the volatility index today it get well over 15. north of 15. sold that. i sold. >> you sold all the puts today in the s&p. >> i sold lower strikes to make the put spreads to roll them down. >> turned into a spread. >> so, yeah. >> complicated stuff guys watch "options action" on friday. >> nicely done the other thing i did is i sold some tbt calls against my tbt position that's moved a lot this year and i think that everyone expects a hot number tomorrow. if it's not superhot, i think maybe we see rates coming back a little bit this has been a really quick move so you know, i could certainly be wrong but it felt to me like that herd

of panic i want to fade. >> but what is a good number tomorrow from the viewpoint of the stock market. >> oh, boy that's a great question. >> war we looking for. >> some of xlp. >> oh boy. >> what did he say. >> he is scared. >> what do you wish for at this point almost. >> i think that's the issue. injury either way i think the velocity karen brought thaup it has been about the velocity of the move to the upside. if we see that starts to slow and see more consolidation in terms of the 10-year, mel, that's huge. and i think -- look at the way energy reacted look at the energy stocks action exxon, chevron and big names they pulled back a bit, not much that shows something about when you have the greatest fundamentals, great balance sheets, the great dividend yields that these guys have. those are places people see as possibilities that i think there is more upside financials i feel the same way especially with earnings next week. >> we are positioned right now for a massive short covering

rally in the 10-year right now net shorts are at record high according to the latest cftc data according to tomorrow's number we could see a snap. >> i don't think, again, this is a one or two-day move. even though we moved 40 basis points quickly on the 10-year and people are positioned on the other side to have rates go higher i don't think people are positioned with enough fear. and that's why i actually look at markets and think they can continue to drift lower. it doesn't mean disaster but the places i think will be defensive here if you look at what happened today, names like mcdonald's and starbucks and some of the consumer discretionary but into the fast dining fast casual, i totally agree with pete. the osx underperformed the s&p for 10% of the last month. while i'll oil provides go hire. one of the reasons rates is higher is oil prices are higher. there is a high correlation. i believe the energy sector is well positioned i think people underown. >> what's defensive in juror environment. >> going back to the rates

between 2 and 10, the fact that winds out lab is why you saw the outperformance in the bank stocks but it gave up a little bit. so the spread is at 31 bips op it leads me to believe. >> you're ready to rain on the banks. >> i am. it leads me to believe -- i think it's important to remember a couple months ago we had q 3 out of sitdy group and jp morgan and they are not higher from point. we had a quick spike and now lower. the yield curve increasingly gets to that inverted point. tony is going to have at it with us on that pretty soon but i think that's the thing that keeps banks underperforming in the broad market. >> he introed the guest. it's almost worst than buy. >> they pro mowed him in the "closing bell." >> all right not just rising rates hitting the markets, our next guest two other warning signs indicate a correction tony divider is at the plasma to break it down. >> hi, mel hey, guys. we have come up with excuses the

last four months why the market would correct. first turkey, then braszle then it's going to be -- ultimately what it comes down to corrections happen is when there is excessive optimism and low volatility we called for it early in 2018 you had the 7.5% run in jrn in the first three weeks that nobody expected. and bullishness got high you got up to over 60% bulls in the investors and intelligence news letter writers. i'm finding the same consensus where you see the same theng bullish news letter writers have been over -- they're over 60%. that's just too much there is too many people nar saying pro u.s so when you look at that coupled with low volatility okay, here we are hat a historically low level of volatility, the same thing we got before the prior move there and you can see it volatility happens fast as pete and tim and everybody else is talking about. it happens quickly again, there is no way i i want to be negative or defensive in a market with a fundamental back

drop we have but there is periods we can buy the next tick. if you couple the number of bulls at over 60% of news letter writers and the historically low volatility i don't think there is question we could have more downside. >> let's bring tony back to the desk. >> nice. nice get some more. >> stephanie will bring the chair in thank you, stephanie. >> taking my rightful seat next to pete. >> overall, the bullish and yet you say the markets could pull back more from here. >> exactly. >> and how much more would that be >> it's one of those things -- let's -- let's identify where you want to buy instead of how much it could be we saw in january at the enof january nobody expected a 12% move in about four days. so it can happen quickly because the structure of the marketplace. where do you want to actually get more aggressive on the buy side is our main imaging versus a quote unquote level. it's when you have -- less than 20% of stocks trading above the 10-day moving average has been a good early wsh, i don't want to say warning sign but a sign you

are about to bottom out in the markets getting washed out a bit. looking at the vix on the streen screen anything close to 20 is a good short-term indicate err five points away on the vix -- 10 points away on the percentage of stocks above the 10-day in the 30s. >> once you hit the signal and you are in it to buy, what do you buy? are you just as aggressive as your past positions? or do you change the stocks you buy. >> absolutely. absolutely that's the thing that i think i really want to convey is people -- when the market goes down they tend to get cautious more as it goes down when you are in the back drop of fundamental earnings, a solid credit back drop, even though the 10-year yields rice, you still have money availability. the last thing you want to do is get really negative on a decline. >> so tony are you worried about as we get into q 4 we have q 3 earnings coming in the next couple weeks. a lot of future growth is kind of priced in here. we are getting to swralgs levels, getting to peak margin,

some of the things where what the upside we had the breakout but not age to stain what's the upside into 2019. >> the upside is the direction of earnings. the rate of change of earnings doesn't correlate to anything over time to s&p price the only thing that correlates closely to the s&p 500 is the direction of earnings. and also, if i gave all of you a 25% raise. >> that would be nice. we were waiting for that. >> thank you, tony. >> it's yours i promised i will pay you that if i gave you a 25% raise would you spend it all in the first week >> there is no way you're going to hug it a little bit get comfortable when you have more money in the bank account. >> i see many pete pending right away. >> the s&p 500 got a 25% raise 25% q 2. likely 25% q 3 and it will be close to 20 to 22% q 4. that's real money. this isn't a accounting game. >> you're saying it isn't an accounting game. >> it's revenue cash. >> apple has been paying 24%

taxes the last three years it's not the boon that a lot of investors think. you're talking about the rate of change of eps growth it's factored in at this point. >> it's 100% the bottom everybody is talking about you had the 10% increase in the top line growth rate. >> this year but we don't see the expectation for next year. >> again the market correlates to the dr. direction not the rate of change you could have a correction around a slowing, which you know, can happen at any time but the question isn't whether there can be a correction. i've talked about in since the fed started raising rates. you are coming in with higher volatility at times. there is not a question of whether it's going to correct. what do you do with it and the only time that you want to sell a correction historically in the marketplace is when you have an identifiable recession in site. that only comes amp the inversion of the yield curve, tightening the lending standards by banked appear increased strength in interbank lending. none of that's happening that's why it's important to not make the mistake it's down a little bit more. i said it in january

it's going -- it's going to happen i think it's an opportunity until you have the things i just mentioned in place >> tony be thanks good to see you tony divider >> thanks, guys. >> what did you do today, karen. >> what's on the buy list. >> what's on the buy list? alphabet is on the buy list. got shellacked today i'm long banks already i'm pretty long banks already. wouldn't buy more probably i mean gm still on the buy list. >> what did you do today pete. >> i bought xlf and i did because of the options activity in there i did add to banks. when you get the spikes in volume at this time that tony talks about, they've gotten shorter and shorter. if you go over the last year, the expansion time of how long they last where they remain above the 13 level, i want to use that volatility right now and names i want to hold on, microsoft, apple, whatever it might be implied volatilities are rising now i can sell up site calls against the positions that's what i got to try to do.

>> i can't disagree with the more with the buy list things. we are seeing many homemade build act like death auto act likedeath banks underperform seeing semi conductors just urnd turned we started to see retail turn. >> that's the same story home builders have been death for a long time semis peaked in june you may have been right back then but i don't know -- if you are making a list. >> where did the leadership come. >> i would prefer to take your side and point out something different and why i might agree. but i grow more that stuff i want to find a place to buy is proving to me it's not time. you've made fresh new lows relatively lows on emerging markets to the s&p on 8 year lae he is germany underperforming the u.s. >> the only reason why the s&p 500 and nasdaq are up this year at this point in time is because of six stocks that make up a disproportionate amount of weight what i'm saying is there is bear markets all over the place and no one is paying attention to it because the the of the maga, the

microsoft, apple, google and amazon. >> when you say that it throws me off. >> okay. >> seem like a -- it sounds like you guys actually have more no in common. >> we just don't like each other. >> to be clear pete's talking about making a list or there is a place for good companies tony making a list that's proving to be the right strategy i would say you see major sector rotation i'm not -- financials have gone no wherefore a long time home builders have been a bad trade for a year as have autos. so but i think you've been rewarded by picking out sectors consumer discretionary i don't think is rolling over with the consumer where they are right now. >> coming up, check out shares of costco falling after hours. could be big box breakout coming unhacked plus td ameritrade. the retail brokerage firm is backing a exchange and what it means for the fang flout. pete najarian says there is a name that's a buy.

he will give us theed tre.ad live from new york city, much more "fast money" right after this let's begin.

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welcome back we have a bitcoin alrl ptd ameritrade is going full crypt of bob pisani with the details. >> hello, melissa. td ameritrade was one of the first firms to offer approved clients to bitcoin futures now deeper into the crypt of business the firm announced on wednesday

it's making investment in an exchange and clearing organization that will include digital asset futures and spot contracts on one platform. the firm known as arisx bofrs bitcoin spot and futures trade with you supports trading in bitcoin cash, ethereum, and in lightcoin. high-speed trading company the vertu also backs the exchange. here is what's important remember bitcoin is down 50% this year. while trading entrants is not as high as a yeerg year ago it's surprisingly strong. ameritrade tells me that trades for the crypt of echo system of equities ob options and bitcoin futures are just under 5% of ameritrade total daily trades. down from about 10% in previous quarters but that is surprisingly healthy. i'm surprised it's 5%. one final point. arisx is not functional it's awaiting regulatory approval and

launches next year back to you. >> bob, thanks for more on this let's bring in the executive vice president of trading and education. steve quirk. thanks for joining us. >> thanks for having me, melissa. really appreciate it. >> this is going to launch next year how seamless, if you are td ain mere trade customer. is this seamless if i want to trade bitcoin cash or futures. >> yeah, that's where we are working towards. that's what we are working towards. i think the appeal for us -- and bob brought it up. you have -- i would argue, the birgz players in the bitcoin space from a market making space, drw and vertu here and you have a cboe here in a partnership with next. you have people that are very well versed in this space. what we bring to the table as an strategic investor and adviser is a deep understanding of the

11 million plus retail clients and an understanding of what they look for when it comes to a product. so as bob said, they've been licensed since 2010 as a regulated entity they are in the process of becoming licensed as a clearing entity as well which will permit them to be able to actually custody the -- so we can have physical delivery on the futures products. >> so obviously this is -- you're taking a longer look out because this won't be up and running the next year or so. what does that future hold what does the trading the environment look do you think like in a year and is is this really in preparation for the potential launch of bitcoin etfs >> i think the whole ecosystem as bob said it has the ups and downs in terms of volumes. as he said, a previous quarter it was 10% of our volumes. remember our volume is about 750 to a million shares. so we are talking about big

numbers with expect to the amount of trades but it ebbs and flows with the price of the cryptos as well what i think it means going forward is what clients really want is they want access to the markets but they want them in a regulated manner this would be a regulated exchange from head to toe, regulated clearing, regulated exchange, regulated products and i think that's what clients -- our clients are looking for is access to that. and they want to do it all within their td ameritrade account where they have all the other asset classes they trade. >> how much do you think a trade will cost, steve. >> it will be the exact same -- we'll have the same way we rolled out bitcoin futures they'd be priced identical to other futures. >> okay. steve thanks for joining us. appreciate it. >> thanks for having me. >> pete, what to you make of this. >> you know, i think it's interesting. i like the kind of conservative approach that td makes to the thing. because they are jumping in but not right this second. they are building it out and i think he mentioned access and talks about regulation those are important. because people need that

there needs to be some sort of educational process as well. so i think td is approaching this the right way. >> i would be worried if i was coin base. if this is going to be a seamless experience for people who already have td ameritrade accounts that's easier to setting up the coin base, transferring the funds, et cetera. >> i'm not sure dsh be listen i think coin base tells you they would happy to have well heeled competitors like this. when i see this move, i see them offering access to what could be an asset class in the future and that could be security tokens right it could be a way that companies now issue equity in a regulated manner and they need a platform to do it. and it looks like equity but different. and they want to be there. to them i suspect it's a fundamental hedge against the existing business. >> for more on td's big jump to crypto head over to cnbc.com for more i'm melissa lee. you're watching "fast money" first on business worldwide in the meantime here isway else is coming up. >> cigarette stocks are the latest target of the fda but could a cannabis crackdown

be next? the pot master tim seymour explains how worried you should be plus when there is smoke there is fire. it's a fang inferno as the one loved trade falls from grace but could it be the buying opportunity of the year? 'lwel explain. there is much "fast money" after this they don't back down. they don't settle. and they don't quit... except for cable. cable? oh you can quit cable. because we are cougars and we don't quit!! unless what?!?!?! [team in unison] unless it's cable! quit cable and switch to directv and get the most live sports in4k more for your thing. that's our thing. 1-800-directv when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

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so if the unexpected happens... (snaps fingers) you stay up and running. we lost power... but not to that. i want that. (laughing) get fast, reliable internet and add tv and voice for a low price. call now. comcast business. beyond fast. welcome back to "fast money. check out shares of tesla down 3% in the after hours session, following a tweet from the crow which seems to troll the s.e.c the devote is a said, quote, just want to say that the short sell seller in richmond commission is doing incredible work and the name change is so on point this of course after musk made an agreement with the s.e.c. to settle the fraud charges over

the infamous funding secure tweet about taking the company private. the stock down 10% over the past week karen. >> it's just absurd. it doesn't seem to troll it actually trolls as we talked a little before the show, the settlement has yet to be approved. i think it was the october 11th for it to be approved. so clearly the board has control of elon. and he is facing very much. >> doing well. >> it's absurd this is absurd i don't know how the board or his lawyers allow this cholesterol they are not in control. they need fine tune the directors, the chairman. it's hard to find a quality person who has to put up with this kind of thing it's a fantastic company and it's an extraordinary product. but this kind of corporate governance is horrific >> it's interesting, because if you look at the chain of tweets after he tweeted that initial one, one -- one person actually said amazingly to elon musk

amazingly you seem to work against us longs he wrote back immediately hang in there if you are truly long-term it will be fine. >> why the need to engage in any conversation with really nobody on twitter with all due respect to whoever that great person was. and also the reference to the short sellers once again, goes back to -- we had our friend jim "the new york times" reporter. >> stewart. >> jim stewart. >> jimmy stewart. >> like james stewart. >> he said over and over motive. motive motive when you think about the attack on short sellers ultimately that was really his point. and so continue to bring this up it's just -- nothing has been put in the rear view mirror. i don't think is going to come from this tweet from musk frankly backup but it does bakt what you said karen. >> doesn't he have anything better to do they are in production and delivery hell now. >> they are delivering supposedly. >> the numbers. >> he is busy, the upper ranks are kind of thin this isabsurd. why does he waist his time on twitter it's ridiculous.

>> let's say you are a believer in tesla is this a reason why you should rethink the position. >> it's a reason to absolutely at least reconsider how comfortable you are with your position i'm not saying somebody who is long wants to complete le get out. but it seems like they had gotten out of the doghouse and elon jumped back in because of a lot what we see now we see the pressure getting back on the stock. so as a guy who owns calls to the upside i can predict they are not going to work. but that's okay i knew the risk because i was a believer and then auchlds you see what's going on in these tweets. >> i would think the thing concerning to investors even if you are did shall did let's say you are a believer in tesla and believe in the fundamental picture, believe that they will deliver cars et cetera this is a correspondent governance issue this is behavior of the ceo. two separate things that may be a reason not to own. >> how many strikes you give him? we got to go back to travis cal nick a big are cap, raising more

capital than these guys have in the public markets here is the most important point we don't talk about. remember when they burned the cash and had to raise cash and seem some people. >> they still are. they still are. >> we are actually seeing rates go up. we're seeing credit conditions change high yield have a little stress. we are not far off from having a little cash crisis in this name. and he can divert as much attention as he wants. but if we get in the tighter credit market it's interesting. >> do you think the company's ability to access capital at this point has dramatically changed? if they ran out and had to raise money orp wanted to raise money -- let's say they want to raise money. >> they could. i don't know the terms now if they did a convert it would absolutely be more expensive plus you have the question mark. is he going to be there for sure right it's more expensive. nevertheless they should do it. >> ron barron was on squawk talking about this he seems he is not shaken at all. that's previous the most recent

tweets that are just happening. so maybe it's at some point if you ever lose somebody like who is a significant investor in something like tesla, who likes it, believes if in it and thinks there is fundamental. >> you think the guy invested -- i don't know what level he was invested in,, sr. 50, or $100 do you think he abandons the stock hipt. >> that's the interesting part there is the pressure out of the stock. >> if you own a stock at $50 you are mark to market you own the stock at current level doesn't matter if you are an investor goes down today you took credit for that so it's a public investment. it's not private company he should care i mean, every day he goes home long that stock it's mark to market that day. >> all right coming up. costco lower in the after hour session. the conference call is under way we tell you what drives the stock and get instant reaction from wall street plus chipotle sizzling as the rest of the market fizzles one trader says it's about to gehoert tt find out what has them so bullish.

welcome back to "fast money. the nasdaq under pressure falling about 2% in the selloff. and the fang stocks in particular continue their fall from grace the whole group in fact getting hit today. drifting further from the recent highs. for more on the fang trade unraveling let's extend it to dom chu in the newsroom. >> leadership to the upside so far this year is looking similar to the downside leaders as of late some of the leaders are now the big laggards

the fang stocks are among the hardest hit given the new sector realignments within the s&p last month. meaning a mix of communications services and consumer discretionary stocks as opposed to the tech and discretionary ones we have known to expect none of these names by the way have hit a new high in the last month. we are take them in acronym order. facebook shares are down around 2.5% today down around 27% since the high back on july 25th. amazon shares down by around a similar amount today and they're off a little less dramatic, 7% since the record highs back on september 4th. netflix, down by over 3% today down by 14% since its highs back on june 21st and then there is google parent company alphabet, which lost nearly 3% today down around 9% since its high back on july 27th now, of the fang stocks, the only one that has been a negative force so far year to date it's around 10% or so to

the downside is facebook that's its particular downside move leadership within the fang stocks isn't absolutely necessary to a resumption of the market rally, melissa. but some traders are looking at the group as a barometer of risk appetite stocks not far below the record high levels. >> dom thanks. given the weakness in the names we thought it would be perfect time to play trade it or fade it. >> this is easy. >> since guy is not here. >> we can raise our game a little bit. >> let's go straight to the game pete kick-off with you alphabet trade it or fade it. >> trade it. when you look at the accelerated revenue growth out of the name and the cloud and devices you see the growth now 14%. there is a lot of reasons to like it. youtube on top of everything else s in a name undervalued for a rung time there is upside. i trade it. >> why do you think it's lagged, pete i like the name and think it's cheap and concerned about regulation there is no question they are getting more regulation than

less. >> i don't know, karen might have a better answer but i actually believe when i look at the company people are looking for the huge bang for the buck i don't know google gives that google matured into -- when you look at fang names it's the mature people aren't as excited about what they see upside as facebook some of the other names. >> do you think there is as much upside. >> i do. >> do you think there is regulately risk. >> i think the regulatory risk is something has to be thought of obviously they are spending a lot of money. they are wetting huge. leader in ai there is so many different reasons, and so many verticals working for google this is a name like apple where it's slow but goes high sfwleer tim this is for you. amazon. >> trade it. >> the only fang stock not in correction trade it or trade it. >> trade it. i think when i look at amazon this is a company also may have regulation coming down its way but so far there is no one that's getting in their way and right now the market is willing to pay for the multiple in the form of just top line growth or

god forbid they turn up the margins. either way the market is ready to reward amazesen the valuation meant nothing in the last five years. >> i -- i kind of agree except the valuation has been superhigh for a long time. i don't think this market activity has any bearing on the amazon story at all. i know it's out of favor, in favor where whatever. >> whether trade war, higher rates you are saying. >> well they have hardly any debt less than one times. >> not exposed to higher rates. >> right. >> the wage thing i think ends up being a positive for them if you love amazon, this selloff is a good opportunity. i just -- you know, it's too expensive for me. >> let's go to next flicks, dan trade or fade. this is not in the maga. >> it's just coin of irrelevant. i mean, really when you think about it. >> netflix is irrelevant. >> that's not the way -- >> this is why we came up with maga. >> you mean you. >> royal we. >> the royal we. >> i think you fade it

fade it, yeah. >> that was tough. >> that's it. >> tough to get that out of him. >> i think -- >> competition what do you think. >> she squs the questions here. >> why is it irrelevant. >> i think that you see all this competition coming in here, yeah, and so. >> a guy without an answer. >> i -- >> the international growth aspect is not something that interests you right now? >> of course it does it costs more lower -- i just think. >> this was broken like facebook that's why they are out of fang. that's why we have mag aire. >> what dan meant to say netflix has huge competition, whether some of the other online streaming services that are coming through valuation is absurd. this stock also is so overowned at this point any turn around in the positioning is very negative for the stock. i think it's 310.by the enof the year. >> what he said. >> got a little brotherly moment here. >> we are going to hug this out at some point, but not now. >> facebook, this is for karen trade it or fade it. >> i'm long it

that means trade it. whatever position you want i'm nervous, though. i am nervous we have an event coming up which is earnings. we have a -- first we see alphabet earnings which i think have some relevance to how facebook trades. but october 30th -- well if alphabet earnings aren't god that's bad for facebook. >> what's the most -- what will be the most concerning thing when the conference call is going on what are you nervously awaiting in terms of what they talk about is it the spend. >> can i ask a question this is your show to ask questions >> i just asked a question she hasn't even answer to do. >> what good can they tell you on the call that they didn't. >> i think you are crazy to trade it. >> growth. let's say they get very big instagram revenue growth that's a huge one. >> all right are you worried about spending >> yes that's the reason it's here not the whole reason much of the reason it's here spending and margin. but revenue growth cures a lot of ills. >> i own the stock as well and so i'm with karen on this.

and the spend wsh that i think is which we see where the stock is for the most part obviously there are other issues i would like to see them actually start to show sooner or later a better monetization strategy with other verticals. >> instagram. >> all of them i'd like to see. >> but we haven't seen the fall off in the ad spend yet. i acknowledge that from what i hear you have ad we can going on preponderate folks say third and fourth quarter channel checks indicate softness. but that's the thing with the stock. the stock had the move and you have seen no impact in terms of the competence in the company and that should be scarey because the headlines on this company aren't getting better they get worse. >> still ahead, let's check on the kramer cam there you see them talking to the chipotle cfo and ceo appear they said something about minimal yams that could make you bullish on the stock we bring you the comments. plus juul getting burned as the fda cracks down. could the smoking stocks be next we will explain, more "fast money" after this.

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welcome back to "fast money. shares of chipotle bucking the trend after key bank nishlgted the stock with a bullish overweight rating and set a $500 price target jim kramer set down with the ceo in an interview today.

let's listen. >> the purpose of chipotle doing you know food with integrity and the mission of cultivating a better world, it never stopped resonating with millennials and genz and a lot of employees -- i think 50, 60% of our employees are in those groups. and we way over index with young people as customers. they believe in the purpose. they love the food and then, you know, the strategies that we implement around how we turn around chipotle, i think the more visible we are on the purpose the more connected and engaged we will be with the young people. >> what do you think about kip oelgts right now. >> i think brian nichols has done a great job the stocks had a major rally off the bottom it's had a good pullback the level around 430, the stock doesn't hold you can gik quickly down to 330 on the charts. the valuation is not cheap and they have pressure in labor costs, food input costs. you don't need to run there it's not cheap. >> if we see cracks in the

consumer, rising rates, rising oil prices do we see cracks in chipotle. >> to tim's point, the wage pressure. >> that's going to be big. >> is big for them, yeah. >> pete. >> the wage pressure absolutely. but it ems soo the millennials are the group that has that ability. >> that's them. >> the income. >> that they can pend. i'll tell you, this guy has done a magnificent job. when you look at pe levels and compare them to anybody else in the space they are. >> really at this point, so peak earnings before they had their -- whatever the ebola issue was like $15 they are expecting to do 8.5. >> essexage rating not ee boebl aire i don't want to get any sort of you know -- >> the i like chipotle. >> i like them. >> i went over and had a burrito. >> what i'm saying you expect to get 8.5 in earning processes maybe back to peak in a couple of years still growing sales like high single digits and you want to be

overindexed to my group of people. >> which is. >> i don't know. >> millennials. >> the guys liking burritos. >> burrito lovers. the whole interview and more check out "mad money" with jim at the top of hour still ahead big tobacco getting burned . is there more pain ahead tim seymour breaks it down live at the nasdaq market site in times square. for mass still ahead looked at c. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

welcome back to "fast money. big tobacco getting burned as ecigarette maker juul puts out profits. but now the fda is cracking down on juul and juul is cracking down on copy cats. adifficulty roy is live in san francisco with all the details >> reporter: a lot to cover and it centers on this the juul device today the company is asking regulators to order 18 companies to stop selling look alike versions let's look at copy cats. the company filed a complaint with the u.s. international trade commission, alleging the companies blatantly emulate the the distinctive design of juul's stp. juul wants the agency to stop the products from being imported distributed sold and marketed in the u.s. juul itself is a target in the fda crackdown over teen use of vaping devices, that could

benefit big tobacco can companies. here is why. juul's run away success appears to cut into sales of traditional cigarettes piperaftery points to jal survey looking at 19,000 juul users and found 62% were smoker when they started and two thirds quit after moving to juul here a the one-year stock chart of tobacco companies the shares are down between 15 and 27% in the last 12 months since juul's rise. but since the fda investigation into ecigarette makers, the stocks have either rebounded or seen the selloffs slow down. analysts say many of the companies are also talking about vaping more on earnings calls often. and keep in mind some of the big tobacco companies have come out with their own vaping devices which have been targeted by the fda but they have less to lose in the regulatory crackdown because analysts say margin of traditional cigarettes are high are. those companies are basically making all of the money in cigarettes and with juul owning

about 3/4s of the ecigarette market, the company has more at stake with increasing government scrutiny back to you. >> adidi juul is a private company, correct and i assume that it has backer vc backers. >> yes. >> is there any a talk about what that does to the valts what it has been in the past and what it might be now. >> reporter: it's interesting. we -- a little while ago reached out to investors no one wanted to talk to us. i talked to one person off the record it didn't seem like it was changing the way any look at it financially they're a $16 billion company. obviously doing well, has 3/4s of market share. they are having a wait and see attitude towards it and see what comes out. looks like the fda might come out with more findings next month. >> adidi, thank you. so what does the smoking crackdown mean for big tobacco how does it impact the cannabis industry our tim seymour is over at the plasma to break it down.

is this a good time to mention that tim is in the space long a number ofs names sits on the advisory boards or for three cannabis stocks. for all discloses to go to fast cnbc.com. >> what does it mean for big tobacco? the vaichg juul has talked by about by adidi they have 75% of the market and destroying the incumbent. this is good new resist for the incumbent. the ecigs for tobacco companies this is the move into science and technology, getting people off, and again for the minors, really, adults are using vapes to get off of smoking or at least to decrease dependents and minors try it for the first time that's the issue it's a compliance issue. it's potentially high stakes for the cannabis industry. but the issue to me is not about the underlying it's about the delivery mechanism and then it's ultimately about really compliance on a retail on a drks level. if you think about it, the cannabis industry to me has been coming at this and basically with the fda this is a story

where i actually believe cannabis players have been uber compliant sensitive and come out of the environment where they've had to be ultracompliant they've been watched if you think about the states that are legal right now you've got it going to a dependencery, show id whereas you buy a vape pen you can go to the corner deli and do what you want. as much as i think the headlineless come out for cannabis on this because clearly vaping is one mechanism for ingesting. i think it's really ultimately proven to be an issue of compliance it's going to be an issue coming down to how the drks channels handle it and ink the dependenceries are doing a good job. >> i got a quick question in terms of minors and the ability for them to be in vaichg world what -- what do you see going around the country is that something that is accepted everywhere? i know personally that it looks like in certain states maybe that age level is a little bit different. is that something that concerns you at all. >> every state a little bit different but to be clear i think the fda is right to target

the adolescent and essentially the high school smoking as adidi pointed out you're up 75% year over year in terms of those using nick teen and addicted to nick teen as a young age which they say has an impact on the adolescent brain development, et cetera, et cetera. good for the fda i think compliance is really coming down to how do you control it and how do you control minors buying anything they can't buy while it makes sense that people would say vape pens cannabises kwabz they go together, big. i think the fda has been more thoughtful pch look how scott gottlieb handled the approach to the cbd and giving -- essentially a five rating to epidial ex i think the fda is looking at this not to put the companies out of business but seeing who is compliant. >> let's talk about the trade here in terms of the tobacco stocks, dan. is this really a hurdle for them or could this be a good thing in

vaic vaping put at bay and the their core business. >> look at pm, phillip morrison has a 5% dividend yield, trades below the market multiple. obviously it's a sin stock so people don't want to get near it high pressure this is a cheap stock if you are look at from that standpoint if you think juul is beneficial in the near term this looks like it's bottomed a little bit. to me this lks iertioontesng. >> up next, final trades

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time for the final trade plp let's go around the horn pete. >> i like ibm. there was a downgrade today crating an opportunity the stock is moving to the upside right now is the time to boy because the company is moving the right direction. we'll see if the ceo can deliver. karen fine errman. >> cbs which i liked for a while. interesting little tick up in the football viewing so sports, good for cbs. dan, nathan. >> tim had a lot to see for me about netflix i will eye say they are going to report one of the first big cap teches to report if they miss subs two quarters in a row this is back towards the low from august. >> a good spokesperson on your behalf. >> there are nights i need to to do all the talking for dan. >> we know. >> and other people.

>> do what we can. 42 the stock. here what i talk about you actually have seen this happen major sell off. >> 49. >> 50. >> 51. >> look >> catch dan. >> i'l >> we'll be back here tomorrow "mad money" starts right now my anything 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 my job is not just to entertain but to educate and teach you so call me at 1-800-743-cnbc or tweet me it's official, this has become a good news is bad news market the dow plunged 201 points today.