in the fear defensive assets that helps explain some of that. i think gnat fear is china-related and just high valuations it's a really healthy shakeout happens all the zbliem david and john we will leave it there. thank you both very much full lineup coming up at 7:00 p.m., a special that sarah and mike and jim kramer and "mad money" as six but first. >> "fast money" begins right now. to you guys. "fast money" starts now with breaking news. stock slammed again. the dow now down more than 1,000 points since yesterday the worst two-day streak since february although the market closed well off the lows the s&p 50 oh down 6% from the highs. the nasdaq dipping into correction territory before closing off the levels while the russell the only marilyn index to close in correction territory if you are a retail investor watching at home tonight you have two questions how much worse could it get? and how do you know when it's safe to buy stocks again buy.

>> it's got another 7, 8% worse to the down zblood really. >> the market has three things going for it steve mentioned one. there is a kmans chairman powell backs off hawkish languaging. >> that would be encouraging >> in the short-term. >> okay. >> in the short-term number two i think there is a chance maybe president trump and president xi get together and get some accord. maybe there is pain on both sides for them to come to the table. number two number tlie on the verge of earn earnings and those and guidance will be good that's the in the bull camp. how do you know it's over? there is a day the market washes out and the volatility index up pretty much all day today despite ralliying at a point will be down when you soo he that day that's when the bottom has been put in. >> today was pretty heavy volume is this it. >> today was heavy volume. but you need the three-day rule. you need to see it stabilize 27065 broke it violated it

2710 that's the low. why do you think it's negative if they back off raising rates i'll switch gears quick. >> just, well if they back off because he feels he needs to answer to the president, that's bad. >> we're not hearing that. he is just backing off or stay the course. >> but if he does it now a day after the president says he is crazy, then it looks bad the optics are terrible. >> he has been going on for weeks. there is never a time he can do it without the president saying something. >> i don't know about that i think there is plenty -- you get some kind of weak data point, economic data point, that gives excuse but if you look at an economy which right now is doing fantastic, then you really should be raising rates. and i don't think -- >> do you think the economy is doing fantastic? is that what the markets tell us is it doesn't feel like. >> it doesn't. the market tells you that rates are too high at this point in time for the market it's digesting the fact of a rotation i can come up with a lot of reasons. we have a trade war that

continues. that's going to lead to high inflation, low growth. that's not great china is slowing the rest of the world is slowing. ultimately. >> the question is when do you buy it when do you by when not sell it. >> i didn't say we were selling. the question was -- the first the question is it bad if the fed fax backs off yes for credibility. number two what's the market tell news it's telling us there is a rotation going on and we are worried about the rest of the world. >> are you worried. >> i'm always worried. am i that worried? not really i think the market -- it doesn't use a tiny scalpel to get to exactly efficient prices we don't know they're never exactly efficient. to your point could it the go down 7 or 8? that's quite a bit i would -- i don't foresee that. but who knows. it's hard to know when the bottom is in you really only know for sure after. i do think when you are at the maximum pain where you absolutely can't stand it anymore and the inclination is to sell everything that's a god

time. >> are you at that point. >> no. >> i bought a tiny bit of fedex today. yesterday i saw i bought a tien yao weenie amount i think i said of google call spreads facebook call spreads. so i don't think that -- i hear what you are saying about the risks. i think the economy is doing really well. we will see. get a good look tomorrow not only at jp morgan earnings for themselves but they have great insight into what is the economy looking like right now what does it foresee that's important. >> there was some panic today. i didn't see the panic yesterday. i heard it today. >> when did you see the panic. >> ripping through moving average, program order. >> all during the day when you starred to breakthrough through different levels and didn't hold that's when they sold. when the positive trade headlines it bounced and didn't hold which made the selling more ferocious to the soundside. >> so the scenario of down 7 to

8% or so. >> from here. >> why is that so straesk. >> what are the bear points getting us there. >> good earnings and a company saying good forward guidance is lousy. that will exacerbate the selling we have seen there is a good chance we see four major companies say that. the inflation pressures they feel and talk about the fed in the next block but it's backing up what the fed is doing that's number one. you saw a huge emerging market risk the markets have been down no bounce seemly in sight. you have the chinese currency kinning to devam that's a headwind. the risks are out there. the other risk by the way is passive investing is great on the way up in the etfs and everything is beautiful and bob pisani talks about it and we wax poetic pass seven great on the way up but when it becomes active and people are saying what's going on and people freak out, you see it manifest itself. and you saw it today i mean the market went down from

down 300 to down 600 in a minute and a half you tell me that's normal. it's not. >> that's based on derisking quantitative stuff, the computer spetz out how much you have to deleverage and derisk. and the price of the market where you have to the derisk and derench. >> what turned it around then? if it's down like that on those factors what turned it around. >> it's almost like a rebalance. if you do it ahead of the game the level was 2719 in the cash if you broke that level it was supposed to trigger about 50 billion in notional s&p futures for sell as soon as it triggered we raled five handles lower than that we sold ahead of that to get to the level. >> that was the 100-day moving average. >> the 200 day but that's -- the 2719 level was where risk parity accounts decided through their models where they had to sell the market it's not precise.

>> when computers do it it still doesn't feel good. you see the volatility index spice spike. a bid to gold which we haven't seen a strong bid to bonds. doesn't feel good. >> it doesn't feel good at all maybe we got 7 or 8% i will give you my rule of thumb i use to know when there is a bottom when i wake up in the morning and look at the market and i want to throw up on my shoes that's when you buy. >> you did feel that way. >> i did not today i'm with guy probably there is a time you thought -- i thought it might be this morning you have a big down day. rips higher and stays that's where you want to say i'm adding one third position here and how we look at it. i think it's a tladable bounce and we have to see with earnings earnings mtd fluor corp. concerns me the margins compressing concerns me. you have a tradeable balance and then we see. >> it's funny you and karen say

you're not ready to throw up. >> i can throw up without selling everything. >> what do you do before you feel that capitulation bottom. what do you in this period if you don't think this is the all clear. >> you create a list of stocks that at a certain price you buy regardless of what's going on. everybody loves apple for reasons we talk about the last dozen years. if apple gets to a certain level whatever that is and my head 185 makes sense. it doesn't matter what i think fischer traded well today. we talked about that, upgrade. maybe that stock is interesting now. you make a list of stocks that at a certain price you buy regardless and you stick to it and you don't allow fear to interfere. >> one thing i do try to do is look at taxes. if i have big short-term losses i will look to sell that and buy something moving with it right? so that that way you can take the short--term loss maintain the position in the trade. >> you have to have a couple of days, let's call it three still. >> when you say three-day rule,

do you mean from yesterday or the today. >> the selloff day. >> okay. >> two days ago. but you have to have -- you can't make another new low if it goes now a fourth day where there is another new low then it resets again you have to have sfablt in the market for two or three days before you actually buy the market. >> all right well if you are tempted to buy our next guest as a simple piece of divides don't. it's different lori is the head of u.s. equity strategy at rbc greats to have you. >> thanks for having me. >> why not. >> we said don't buy the dip yet. eventually we will but we're not at the point yet. >> we'll tell you you are. >> you guys felt a bit of panic. i sensed complainsancy yesterday. i was out seeing investors wasn't looking at my phone got back to my office shocked to see how much tech went down. i was not sensing investors were paying that much attention to it in the meetings. that tells me we have a ways to

go. >> what will tell that you panic has -- is at a level on the vix. >> well. >> the volume. >> i think on the tech stocks -- i've been a bear on tech -- it's been a long lonely trade for me. but when people stop arguing that they're sick secular and don't have cyclical components there is so much pushback on the perfection of fundamentals that has to break before you buy that sector i think we are a long way from that. >> let's get outside of tech and look at sectors that have been beaten up. let's look at materials maybe. let's look at some asset heavy names. is that where people should rotate into. >> materials is a tough one. we are neutral that sector and getting mixed signals. it looks expensive if you look at it relative to cash flow through yesterday's close. i think there is damage to be done in that space. >> speaking of valuation, is there a valuation level at which you say the market is definitely a buy? is it- does it get trying reported yet

or duv other things with the valuation. >> you have to see other things. valuations themtz are not a reason to buy or sell right now. as of yesterday's close we were at 16.8 times on the forward pe. your long-term average is 159.8. at the least i'd like to say it's getting close maybe close to the average then we have to re'sess. but we are not back to cheap valuation territory yet. >> do you have the uksry of waiting knowing the seasonality is the end of the year is coming do you have the luxury of waiting for all of these things to get in line >> i'm not a big believer in seasonality to be honest i think even if you look at issues like the midterm elections right people trying to make arguments about that right now. the market traded completely the opposite of the way it does in a typical midterm year i'm not even into that issue frankly. >> okay we'll get back to the vomit. >> that's a better signal. >> what are you seeing in terms of clients want be -- the flow of funds. >> i think what's really been tough the last few days is there

is a different thing resilient on different days. one day you'll have the reflation trade back in vogue. we have had had days where energy had a nice move and industrial caught a bit. then that doesn't work then everything that is defensive bids up. we think you should tiptoe back in the confessives we have been telling that for a kwhiel people have to get past the rising rate fears. i like the energy sector you have cheap valuations. geopolitical risk. you have a bullish oil price forecast and you have an appear at this time where investors look at the space. because they are running out of options. >> lori good to see you thank you. rbc. >> i think she is right about complacency. >> one of the trade strategies for people has been short volatility that doesn't go away overnight that's not something going away over the course of a week. we saw it in january and you see it now to think it can't continue to exacerbate to the down -- especially when facebook went

down -- we talked about it -- went down 23% in 6 minutes that was crazy that's a $600 billion company. we said the same thing could potentially happen in the broader market you see it now these air pockets are not going away overnight. >> what did we do today, day two of the market selloff. >> you can take time and reposition the portfolio if you are concerned about inflation, concerned about rising rates because of inflation, look at what free port, up in a down market. copper and gold bid there. why not put the portfolio in that and hedge against everything else? maybe you don't look necessarily at tech again as buying the dip. but look at things that outperformed or at least had relatively strength versus the market to me it's free port mack. >> karen. >> i bought a little bit ever fedex. a couple of things lower i would buy some more. ge was down a by preponderate that's on my list. jp morgan to add somewhere but it's a question mark into

oregons tomorrow that will obviously read through to the other money center banks as well as goldman sachs and morgan stanley knows are the kind of things that are on my list. and then there is some retail stuff that's getting attractive. i mean macies -- there is stuff to do if you can separate the emotions >> what's awesome to me is lennar has been catching a diana olick had a great interview with the chairman of len you see in gaining momentum to the upside. maybe this is the laggard in a terrible tape where it corraly. >> coming up it's the showdown of the century president trump calling the federal reserve crazy and out of control. and blaming it for the market selloff. while the fed chair, does he fight back details. >> plus judgment day for the banks hours away make or break moments for the markets? we tell you why this could be the most important earnings

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welcome back to "fast money. chaos reigns in the markets. the s&p down almost 7% from the 52-week try. and president trump isn't staying quite. blaming the fed and calling it lock o and crazy and out of control. let's get to eamon javers on this developing story. >> the president has been heaping the red hot retiric on the federal reserve the past 24 hours. take a listen to the toughest criticisms over the past day. >> no, i think the fed is making a mistake. they are so tight. i think the fed has gone crazy >> the fed is going loco and there is no reason for them to do it. and i'm not happy about it. >> i think the fed is out of control. i think what they're do something wrong. >> so crazy, loco, out of control, all of those are the adjectives that the president uses to describe the federal

reserve policy of raising interest rates the president frustrated he doesn't want to see the economy stall or the dow stall into the midterm elections in november that's the big frustration for the president that's causing him to speak out the way he has been but larry kudlow and cnbc suggested there is one line the president isn't crossing bursting through a number of presidential norms of the past but the one line he is not crossing is larry kudlow says the president is not directing the fed to change the rate policy he is not directing them to slow down that's the line that larry kudlow suggested this president is not going to cross because, he says, the white house respects the independence of the fed. the president spouting off here but retaining in image of an independent fed. >> he actually said in one of the interviews this morning, the president that is, that he would not fire powell, which i think is an important message to the markets as well. right? >> sure. >> to at least say, he is going

to be in the job. >> important nuance there, because if the president says he is not going to fire powell, he is assuming that he has the authority to fire powell and there is some gray area there about whether the president could fire a fed chair if it's not for cause. so there is some questions in terms of the process there this president clearly believes he can fire jay powell if he wants to and but saying he is not going to because, again, the white house suggesting that the president respects the independence of the fed despite all of the rhetoric he has been pouring on the past 24 hours. >> he had had so many interviews and i'm sure you watched all of them close sflie yes. >> has anybody pushed back and said if the kissimmee so strong why wouldn't the fed raise rates? isn't that a reflection of the strength of the economy. >> larry kudlow said that on cnbc this morning. you hear the president making that case slightly he says i get there is safety there. what he is suggesting is he understands the fed needs to raise rates here so that in the future if there is another

calamity like we saw in 2008, the fed has wiggle room to lower rates again and gives enemy ammunition to work with. the president in all the criticisms says he understands that he just thinks they are moving too quick and should low down. >> long day for eamon at the white house. >> shortly after jeffly gundlach weighed in. >> it's clearly he is crazy like a fox with the fed rhetoric where he doesn't want to take the blame if the fed overtightens and leads to a problem in risk assets, which you know is starting to come out in realtime in the last week or so so he is basically saying, you know, if the market goes down it's on the fed. >> so is there truth to trump's accusations here is the fed to blame for the selloff grasso what do you think. >> if you look at the time where powell had the statements. and you look at the time of the selloff. it's hard to imagine that it's not responsible or on the fed's

lap for the selloff. i mean that's -- when i look at the kmart i don't know what you could garner from it other than that. >> well -- what about -- what about italy? what about a trade war what about slowing. >> all the things there the past couple months. >> exactly. >> raising -- including. >> he just had to show up. >> he just had the conversation affecting the bond market and filtered through he just had the conversation >> i mean. >> it was a conversation. >> it's been a conversation six months we have known this is coming a quarter point, drops the market this much i mean, come on. our kissimmee that weak we have bigger problems. >> it's not what he said he said how much he is willing to go past neutral. >> we have known that. there is. >> no, there was i think it was seen as hawkish the market told me the market told me it was seen at hawkish. >> at the same time we had problem was italian debt at the same time we have the yuan weakening .margin was earnings warnings. >> maybe it's not -- so maybe

it's everything. >> i agree. >> but it's a little too convenient to have the day that he speaks about it, the bond market fall apart or rising rates and then to have the market fall apart. >> doesn't mean it's it's the cause just because it's convenient doesn't mean it's the cause. >> i took calculus, causation. >> that's algebra. >> 10-year yields have gone down 150er yields spiked at 328 you could say it's a flight to quality. doesn't matter what it is. if the fed caused this, if the stock market can't stack this we have bigger problems plus if you thought the market was going hire in the face of the federal reserve going about face for a year and a half you are hoping against hope that it's the case. there is going to be hiccups along the way. the market can't goe up for ten years with the fed at its back and the fed think it's going to

continue when the president talks about derailing the economy he is talking about derailing the stock market when he became president trump talked about being a report card for his administration we said back then if the market goes down he needs somebody to blame. and le blame the federal reserve. >> he has a scapegoat. but can we all agree that deleveraging the balance sheet with raising rates is a double affect of tightening. >> okay. but in didn't happen in a vacuum it's not like it wasn't telegraphed for a long time. one thing the market hates is surprises. and this was not a surprise. that they were shrinking the balance sheet. three years ago they laid it out there. they laid out a year ago what the path of tightening was like. >> karen i could push back and say -- all of the other things you are say something the reason why the market fell were out there as well. whether it was trade, whether it was yuan or anything else it was out there as well. >> well trade has been getting worse. >> right. >> second round of tariffs.

>> trade when china getting worse. trade with mexico got a nafta two or mca or whatever but trade with china getting worse. >> i'm not sure it's worse. >> it's not getting better. >> maybe today they see. >> he wasn't meeting at the g20. now sending a team meeting at the g20. >> hopefully that's getting better i think the market reacted to that that is the bigger threat. >> the one thing i do think is important is everybody it o is talking about the fed being tight. i don't see that if you look at the chicago fed national financial conditions index. we are at the easiest conditions since 1994 look at the taylor rule and these take ut the emotion out of the taylor rule says the fed funds rate toub at 5.25%. >> that's a great intellectual argument but isn't it the rate of change and the change we have seen where was the 50er treasury yield six months ago

and it went up to 3.26 whatever that was and change? and now it was 2.8. >> it just means we had a change. >> we had a change. >> the doom is price stability and employment full employment. >> full employment and no inflation. >> we have no inflation. >> look at inflation expectations they are at 2.2% that's what the fed looks at fully anchored. >> are we in any danger ever inflation running away. >> maybe. >> maybe or. >> maybe is it the fed as job to go ahead of time. >> maybe sounds like he can skip one. could he skip one or is it a travesty to skip one. >> they ruin the credibility or destroy the credibility. >> they actually get credibility. it's data dependency it's a beautiful graph. >> you said they destroy the credibility prior to jump's recent comments about the fed. would you have said they would destroy the credibility. >> no. >> so let's not introduce that into the conversation.

>> that's what i said last night. >> so if trump shut up they are allowed to skip if trump shuts up they can skip. >> all of the things being equal, the economy doesn't change, if we have anchored inflation expectations, maybe oil comes off a bit, then there is the economic reason for them to skip. but if they do it just because -- the day after he says something and nothing has changed then it erodes credibility. >> erodes everybody credibility. >> i think we could have the conversation all night for more on jeff's take on the war on fed cnbc here is whaels is coming up on fast >> announcer: sums up what investors were do doing at fear gripped wall street. and history suggests it's about to get worse we'll tell you how bad plus in the battle for your money, one group of stocks is getting crushed. but the chairmanays at sth's creating a great buying

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welcome back to "fast money. it's judgment day for the banks as citigroup and jp morgan and wells fargo kick-off the earnings z season. it could be the most important ever for more on what to expect let's get to leslie picker at headquarters. >> these three banks jp morgan a citi and wells fargo are important not just because of what they say about the healthy of the banking sector but what they say about the macro picture as a whole analysts and investors will zero in on loan growth are they keeping base with economic growth and lending to consumers and businesses in the second quarter the growth was muted but as banks rice they have the opportunity to earn more from the interest charged on loans the street's consensus is that earnings per share at all three banks will be higher this year than last and the combined profits within the industry may be a post record high after the financial crisis the recent market volatility

should benefit the banks 'equity trading business we will be looking for comments on that tomorrow now, that said, the kbw bank index is more than 5% lower year-to-date, compared with a 2% gain in the s&p 500 despite the recent pullback. valuation on price to earnings basis are below post-average pricing. leading some to believe that decent fundamentals could jump start shares. >> leslie back at headquarters i think a lot of people thought that about banks for a couple of quarters i can't wait for jp morgan's conference call. what jamie dimon has to say about the economy is very interesting. >> and very telling. i think the earnings are really going to be secondary. certainly this past quarter earnings unless they are dreadful but i think that's secondary guidance, i think. but really it's his -- nobody

has a better view on the economy than he does and i think -- i don't know, i want to hear what his view on the fed is i don't know if he gives that view sometimes he speaks out of turn and -- but i'd love to hear his view on the fed and whether he is concerned the fed is tightening too quickly. >> he is unvarn i should in commentary and that's what makes it so valuable. >> it is and they deserve the premium valuation they get they are within ear shot of the 52-week high morgan stanley made a 52-week low today. there is clearly the capitalism between haves and have knots gets larger. that's continuing. look at goldman sachs which i've been a bull on for sometime. but the change in management and seemingly the way they change the business model overnight gives me some concern. so i think jp morgan is going to be fine. the banks having to prove themselves are the investment banks, specifically gs and ms. >> they act like -- they act like death though. all the banks -- you could have said that six months ago

the regulation coming out of them was the biggest tailened we have seen. i haven't seen any clients kited about buying banking stocks. they are going to fintech, visa, master card and areas like that but not traditional banking. >> do you think if jaimie dimon says the economy is a-ok, strong, strong, every indication is fine, the markets respond. >> i think they do to somebody like jamie dimon and i think the stock responds the one thing about the selloff is the bar is low. they don't have to to do much just be in line and say, yeah, you know, we're not seeing signs of weakness out there. i think the stock market and jp morgan stock does well. >> jamie dimon was on record saying where the 4% the 10-year impedes growth. >> if he moves off that where he says, okay now it's more of a velocity issue. >> for more on what to expect for the earnings tomorrow let's turn to the options mechanic mike is out in san francisco to

break it down. what do you see. >> the options market implying good sized moves to the bank about 3.8% for citi bank 3 tt 2% is the implied move in jp morgan opinion 3.8% also in wells fargo. granted jp morgan the largest of the three that 3.2 actually translates to 12%. but where we saw the most direct direct o drexel activity even though above average options active was wells fargo where where saw 2 times the average daily put volume and most activity concentrated in the weekly 51-strike puts. pierg tomorrow he saw 6,400 of those trading for 40 cents those are bearish bets the stock could be below $51 by the 40 cents they pay by the close tomorrow they are betting that wells fargo could drop the other two flows in both directions despite the negative activity today. >> mike with, thanks for that. for more "options action" check out the full show tomorrow at 5:30 p.m. eastern time still ahead, stocks getting

slammed today with the nasdaq falling into correction territory and a number of of high fliers getting crushed but guy says there is a stock down 15 percent this month alone that he would love to buy right now he will give us the name and stick around later for cnbc markets in turmoil a packed hour featuring jim kramer and even these buys, the "fast money" trader that starts at 7:00 p.m. eastern time. at 7:00 p.m. eastern time. more "fast moneyyeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? meantime right after this. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

welcome back to "fast money. october has been a scarey month on wall street and we are only 11 days in we have already seen huge loss was american airlines down 24% down 18% for amd amazon, netflix and electronic arts down 15% month to date. are any of the names oversold and worth a buy. >> netflix is. because i don't think it should be caught up in the whole trade war epic saga we see. >> it's kauts up in the high interest rate saga a leveraged balance sheet situation. >> i think that going into year end you have to make a choice. do you want returns on the money? or just want to hide i think funds are paid to manage money and show the positive return you will be forced into growth stocks, netflix is still a growth stock yes, head winds. but. >> some of these give a nice

rip. something like netflix, the wrng move has been to bet against netflix the last several years i don't know if it's time to bet against it for tradeable bounce. i think amd a name i'm long as well that might not be bad that didn't seem to sell off and even today had relative strength i do think there are tradeable buys here. once we see that market start to return. >> friday at 5:30 there is a great show. >> "options action." >> "options action." >> sometimes you o we let. >> you you do. and in early september you allowed me and dan nathan and i went on and he put on a bullish trade-in electric ib arts. proved to be a good trade by dan. i know he is listening but i think there is a good chance that electronic arts trades back to december 2017 level at about $100. here we are. i think electronic arts is overdone on the soundside at 19 times or so earning it's fair valuation. and two analysts just both upgraded the stock, 145 price

targets. i think ea is interesting here. >> do any of the stocks tempt you that we went through. >> i'm long one of them. >> american airlines. >> american airlines we saw good news out of delta today. should translate, somewhat, not entirely to american airlines. delta was kind of a nice positive surprise. especially on the -- on the higher class more expensive tickets. but i don't know in terms of cheapness, this is pretty damn cheap. >> well, guy here, he is not scared says you should buy one of the names. why don't you head over to the plasma. >> should i get up now. >> and deliver the fast pitch. >> i walk to the plasma. it may scare you and i'm doing a power pitch. it's called fast pitch this is what we do slide it errol. amazes and are you are you kidding me crazy valuation got to be nuts. >> i am but i'm not nuts favorable into earnings.

the stocks went to 2040 in early september to ought of 1,800 now. that is one of the biggest moves we have seen in a while. but we have seen moves of this magnitude over the last five, six years all of which have been found buying on the back side. fundamental change in the business no, nothing changed in terms of what amazon does there is no fundamental change it's the same company it was a month ago when we walked about it racing toa trillion dollar market cap and bezos raising minimum wage at amazon, why do i think that's interesting? as much as i like to think he did it because he is charitable and out of the kindness of his heart -- injury that's part of it part of it was to get the media offer his back because he hasn't been as charitable as he should be but did he it to make wal-mart and target and all jack up prices as well that has a two fold effect of potentially hurting competition. here a chart i mentioned still in a decent upfriend we

haven't broken yet i think there is a chance into earnings and amazon sets up as well as it could in this environment. >> so, guy, question for you, looking' chinese amazon in the form of alibaba beaten down, amazon is up 47% alibaba down 17% are you worried that you get guys rotate out of one and continue to rotate and buy the other. >> that's fire listen, if you have some china accord and president xi and trump are shaking hands, alibaba will rip and maybe you see selling in amazon. could happen i have no idea i'll take my chances that won't happen and i'll take my chances amazon will be a buy in earnings. >> no more questions time to vote on guy's pitch, buying or selling. >> steve grasso. >> you said me at hello. buy amazon i've been a lover of this stock. i think it turns so many different valves in the investment world i am worried about the alibaba rotation. >> neat handwriting you wrote that yourself surprising.

>> karen. >> so if you have been waiting if you have been waiting for the chance, nothing has change -- i agree with guy on that completely if you have been waiting time to buy amazon >> brian kelly. >> i hope you can see it i'm saying hit the buy now button. >> that's a -- you noticed the snuck the bitcoin b in there. >> yeah. >> that's weird. i still think buy amazon. >> would you step in and buy amazon here? phone our twitter poll at cnbc "fast money. we reveal the results later in the show but as stocks sell off a shift from value to growth under way karen finerman explains.

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welcome back to "fast money. stocks getting crushed again today for the worst two-day losing streak since february the selloff under scoring a shift in markets let's bring in bob pisani at the new york stock exchange hi, bob. >> will value outperform growth? that's a big question. the past ten years growth has outperformed value and by a lot. growth stocks were up 260% since 2009 value is up only 160 look at the bill difference np no one buying vape you want to buy a company chief compared to value of assets. a low price to book ratio. that is the traditional criteria for buying value there are others but that's traditional. value stocks can change

overtime but right now missouri most value kbaul in three sector consumer staple was energy and bank stocks. in the last week there has been some evidence that investors prefer value or at the least that value is not sold as much as growth. tech stocks, the ultimate growth sector are down 10% this week. the banks and energy and consumer staples down only 5 or 6% shifting the value would be a big deal for ten years we have been in low growth and low rates in that environment it made sense to buy the only secretary we are growth, which was technology and it almost -- it didn't matter how much you paid but now things are changing. we may be moving into an era of higher growth and rates. and in that environment owning tech may not be as desirable as it used to be. that's the problem it may be more desirable to own value stocks unfortunately, we still need to have the dust settle before we can see a really clear trend back to you, mels aire. >> bob thank you

bob pisani tp. how can you tell the difference between a growth stock and value stock what does it pleen. >> karen is at the plasma with the more you know. >> we hear about the talk about rotation out of voting into gral let's talk about what makes them value or growth. certainly we start with fundamental price. high pe that's in the growth camp not a surprise obviously low pe would be in the value camp one of the other things some true, true value investors love to see is dividend that definitely goes in the value camp we see so many growth companies that couldn't pay a dividend something like a cult following stock, doesn't happen in value definitely in growths. so now let's go to a particular industry and see what kind of names we have and where they fall in the growth/value spectrum right, so best buy this is definitely a value one we all know the story here, that amazon threat, the stock trades

cheaply and have been able to survive. that's definitely in the value camp stitch fix, for sure in the growth camp. we saw what happens when the growth isn't there the multiple is compressed the stock really gets crushed. that's the downside of growth. on the value side, we have macy's have been able to turn it around a bit and yet the stock is very cheap, low pe multiple and sort of medium between stitch fix a and some others is alta, high pe not superhigh. but this is a cult following tremendous growth but if they miss that stom could come in what i like to find garpy stocks growths at a reasonable price. that leads plea to the bulls with o eye, target you get growth and a reasonable price. both growth and value. >> karen it's bk. >> hey bk. >> very interesting presentation my question is we have had a lot

of people conoh saying you want to buy the value stocks with assets of the value ones, target or macy's which of those own the most real estate that might be able to hedge you in an inflationary environment. >> well macy's for sure owns the most -- the most valuablereal estate however they have been trying to monetize that and hasn't been happening as quickly as people like so that's some asset to fall back on. but that was supposed to be a driver for the strategy and hasn't been. i think you got to look at it more on the operating business, how are they doing with that and that's cheap. >> karen, thanks for that. the more you know with karen finerman coming up, square getting smashed after cfosarah fryer leaves the payment firm. adding to the pain for the once hot stock. is it about to catch cold for good plus trump isn't the only one sounding out on the fed. there is jim sounding out about a warning for rate hikes

much more "fast money" still ahead. do you hear that?

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you own the stock grasso. >> i made my first purchase below $13 doesn't make it better because these were profits you would love to take this hurts trading in. but there is payments. there is financial services. there is software. there is still a host of reasons to own the stock. >> you stale own it. despite the fall off, despite sarah fryer leaving. >> snishlly the selloff was the momentum versus sell offoff. the sarah was the last leg of the selloff. i still pleef in the story i stay with it. >> karen. >> i agree steve i think the selloff today was 2.5 billion frech on sarah friar because paypal was up today. which is a close comp. that's a statement she is a talented executive, no question but as steve said there are a number of divisions here hardware, square capital, marketing sales and all run by people with great experience, right? and they all report to jack.

so that's interesting. she is a very talented executive. i don't mean to take anything away from her but there are a lot of buckets of value that report to jack and that's important to know. >> we talk about the fact that you know the banks haven't traded well. part of it is because companies like this disrupt the payments you want to be invested in the things that disrupt the old school stuff so it's -- it's a loss obviously to havesarah fryer go. but i still think here you want to be in square. >> is this a loss for twitter? that jack doorsy doesn't have a talented number two executive to lean on over at square while he is also the ceo of twitter. >> but karen. >> can i answer that they are doing a very expansive search, david veinier -- i'm not pronouncing the name right veinier is sort of a east coast finance guy, combined with a contest coast tech guy they together are doing a search the company is so big now and growing so rapidly they are getting somebody good.

>> twitter impact. >> yes, but i mean then you have to ask it's going from 45 to 27 over the course much two and a half months. how much of this is in a name. >> twitter was actually higher not that it means anything but on a miserable day twitter showed life. i was wrong a couple days ago. i thought twitter 29 turned the corner that didn't happen but i think there is value in twitter. >> she is not leaving because of something with the stock she leaves because she has the ability. she is never going to be jack une t o th oc >>p xtheneecstk that steve grasso says looks so bad it's actually good we have the name

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prevagen. healthier brain. better life. welcome back a very important programming note after hunl days for the market stick around. tonight at 7:00 p.m. eastern for market selloff special markets in turmoil you might see some familiar faces. you want to watch that you know what can you buy on amazon a cd of the sound track. you can listen to this immortal sound track. after america bought his pitch for amazon 57% we have not seen that in a long time. >> it's amazing. >> the final trade grasso. >> alibaba been beaten down too long. too far. alibaba. >> fedex i bought some today. i think the kpee is fine. >> brian kelly mine is a blast from the past.

foss fates mosaic. >> guy. >> basking in the glory of the victory, mel facebook was higher today. fb. >> back here tomorrow at five fo >> "mad money" with jim cramer 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