>> nancy thank you for joining us great to have you with us for the hour be sure to tune in tonight at 7:00 for the market selloff special. in the meantime we have full coverage here of the selloff of the after hours moves and some of the earnings calls getting under way melissa lee getting ready for "fast money" hi melissa. >> a big show we pick it up froer from here "fast money" starts right now live from the nasdaq market site overlooking times square the traders are tim seymour. karen infinerman the the on a busy fats earnings straf dwans reports from tesla, ford, microsoft, advanced microdefines devices and visa coming out moments ago. everything is higher except for chip stock amd which is crashing full team coverage the conference culls job lipton on the microsoft beat dedra bosa watching visa and contessa brew brewer watching the las vegas sands. but breaking news a massive

selloff on wall street tok losses accelerating into the close closing on the dead lows of session the dow down a whopping 60 oh points the dow and s&p both erasing all gains for the year and the big looser, the nasdaq down more than 4.5% having its worst day since august 2011. everything from nvidia to netflix to amazon just getting crushed. so the market seeming to spiral lower is there an end in sight to the selling guy. >> well there is an end in sight but we started the show last night and said although it looked like the market rally gave the all clear we thought maybe there is still bad news ahead. i didn't know it would be down 607 oh pinpoints but here we are. a couple fridays ago we had a conversation market i think was down 5% i said to karen goes down 7, 8% we're probably halfway there that doesn't make it necessarily bad. you are flushing out weak hands flushing out a lot of stuks that

got ahead of themselves. mike wilds from morgan stanley saying the same thing. now is when you hunker downing and look at stocks you wanted buy the last five years but inable to because they got away. now into range be maybe it makes zbleens the problem with that guy is i appreciate the rational view on this i think we are going lower too. except for the fact that the velocity is picking up steam down 17% on semis in the month 14% on the transporting. the dollar going higher. macrodata across europe and rest of the world telling us it's gets worse faster opinion the irony is here. after the bell we had good numbers and fell back on earnings which are strong here but we talked about the divergence and it's catching up. >> i felt panicky for the first time. >> why. >> i felt panicky because in the beginning people were saying what are the levels we should step in and buy. today was where is the support they're looking for 25, 32, the february low zblos 25.32.

>> 120 points blee are below where we are. >> i had guys telling me sport is 2,100 bears are throeing numbers out you can't believe it's not over yet. >> what did do you today. >> i didn't do a lot today i. find this fascinating, especially the last half hour where they just absolutely puking out anything. it was a real puke so for me, my bigds position is alphabet, horrible day absolutely horrible day. and yet i think it is so overdone it's ridiculous so that would be on pie buy list i have but for my kids that would be number one on the buy list tomorrow is earnings. so it's a big day for alphabet. >> it could well be make or break for tech but in terms of the trend in technology it's been clearly under pressure, clearly the atm in this market downward pressure days where does that leadership come from at this point if tech it rolled over we lost the momentum trade

information technology and communications services in correction territory don't have participation of financials which a lot of people would thought would join the party we don't have treels no transports what leads this market higher? we need to answer that question. >> let's talk about why probably is headed this way in the first place. we talked about this a while the fact that chinese market is down some 30% until the last couple weeks the u.s. unattacked tim talks about emerging markets all the time getting crushed currency volatility has been nuts finally we are detaching up. to answer the question what stems the tide and we sort of saw a little bit of it the other day, if the chinese market can get on solid footing maybe they could lead us out of this i'm not suggesting that happens but that's where you need to find the leadership. >> i'm sorry, tim, you need a god meeting at then of november for that to take place but i think the main concern is the fed -- i still believe it's the fed. is this china as well? of course but i still think it's the fed. >> don't forget about europe

by the way in morning th european banks were the focus part of the reason for the volatility again the italian cabinet saying we can't have a spread of more than 400 basis points or we have to recapitalize banks. guy has been talking about deutsche bank which closed at all-time lows and you weren banks down 30 peppers from the high since june. this is a major place. we are, europe was really the systemic risk in the whole thing at one point not even china it's not that long ago that this was really where we were concerned. i think the macrois very important. the beige book out today by the fed was important. >> yes. >> every single fed -- every region talked about a lack of skilled labor that they are holding up projects people can't fill jobs for elevator primaries in a tough time for the economy. and there is price resign. >> wage- wages going up. we have prices going up because the impact of tariffs which is what we heard from a lot of the districts out of the fed beige book we are hearing now weakness in

europe weakness in china and we have the fed. >> if you lock back on the chart. >> that's problems everywhere you look. >> october 3rd powell makes the comments in the interview the market collapses octobers 17th the fed minutes come up we traded up from the bottom 4% october 17th the fed minutes come out dissipate again and trade off again. i get it's more than a couple of things. >> the fed's commentary has been consistent throughout this what is different is what is different earnings season and what we hear from corporate america in terms of the impact of tariffs and what they are seeing in the economy or what they are not seeing not causing them necessarily to raise the forecast what has changed in the past. >> i think it's the commentary i disagree with steve. i think the fed this has been known and out there a long time i think the trade thing is starting -- that's what the commentary is about. the commentary is about the trade situation and what that does to prices and i think this is overdone. >> but think about what texas

instruments said lat last night. talked about their concern is this the top of cycle for semis or on top much that is mr. macroweakness? they basically said we are concerned about the cycle and we have macroon top and i think people are worried about the fed moving tao fast when they moved too slow before are he pushing us over the edge. >> isn't it conspicuous that the two dates are the highs in the s&p appear when we rally 4% off the low -- yet anything that's fed related you woind up getting this onslaught of selling in the market anything fed related i get it china is moving in facts too. but the fed really seems to have the finger -- the finger on the tryinger >> maybe that one particular day, maybe buts in. >> these are big days, the days that created market selloff. >> you think today was a fed day. >> no i think october 17th was. >> are you questioning why we are -- are we overreacting to the fed? is that guardian i think the markets are definitely overreacting to the fed. i don't think they are overreact

thing to the point. >> i think the fed is getting hawkish by the day or at least cementing their fed. >> if the fed is here and the commentary we get from corporate america indicates the economy or seems to indicate the economy is somehow weakening or may not be as clearly on a project trajectory or having a a lot of of price -- if you ever the fed keeping op path that can be a headwind you got two things diverge sfloog it was about the fed on the way up. it's all about the fed on the which down if anything the fed hag gone from being accommodative forgot when that he actually said they said we're ready to go past 2% obviously the president doesn't market and the market doesn't forget that's adding to rancor. >> the preponderate said he is not an economist he said this is the greatest economy in the history of the republic his words. >> that's the biggest problem. >> his words not mine. negative real rates or zero real

rates -- why are real rates zero if we are the kmeet are greativest economy. >> greatest economy ever because the market had a great run in the short period of time. >> i agree by the way. >> by the way, do the math after this pullback. s&p up 25 since elections annualize that over two years. roughly 13% a year that's a good run but it's not heroic. we have given back all that. small cap stocks were the were barreiro meter. >>en a the hedge fund has given back the indices have given the back the entire year and the average hedge under up average 3% into october is now down on the year. >> let me ask you this question. i asked in question before but i think the answer could be different today. if the fed seemed to back off hiking in december, what would the market reaction be. >> higher. >> guy what do you think. >> knee jerk higher and knee

jerk meaning a couple of days. >> good question. >> i think over the term the market would say what what's really going on here it would be negative they put themselves in a position backing off is negative and moving forward is negative you could ask me a month from now i'll give you the same answer. >> i thought things might have changed. >> i will say it i might be wrong it's not the fed's job to make the market go up up and down but that's not their purview. >> market participants want them to me to be more data dependent not robotic. >> what data that's what's important. they shouldn't be paying attention to what the market is moving up or down or not. >> right but they -- should should be paying attention to companies on market calls. >> what they say on conference calls should take the fed away from exiting in grand plan that is a very big to to and get out

of. >> for obvious reasons they can't i think. >> they can. >> no. >> if the market -- trump doesn't like it. >> they are getting out of the grand plan and that's spooking the markets there is no hesitation on the fed's part. >> i want to answer mel's question. >> yes. >> i feel differently. i think if the fed showed some sign of more restraint here -- let's face it folks it was a month ago or six weeks ago we were talking about 3.57fers gdp, the economy was too strong if the fed actually tells you they are backing off a little bit, i think the market will understand where industrial production is in this country, where in fact earnings are, where the labor force is where consumption trends are right now. which are good we are no here where mere recession process the fed backs off there is plenty of ammunition for the market to get a sigh of relief most of this is positioning. we have to get to a place where the bulls are not overly complacent and we get back to place where markets actually are fearful of where valuations are

and where the fed is going to be but we are not there yet. >> we are not show of hands who says this dip we have seen the past month of october is a dip you buy? >> i still think. >> if you are an investor in funds you buy this dip. >> yeah do i pick the bottom absolutely not i've proven that over and over again. over the long-term it has worked out every time. >> one interesting thing morgan stanley out yesterday or maybe today. pointing out buying the dip has been a losing strategy in 2018 every time you bought the dip this year unlike all other types in the rally you have been down. so just that's for what it's worth even though longtime investors think differently and thinking about good companies in good ways. >> sure. >> just buying the dip blindly has not worked. >> you have seasonality what i thought was a bigger effect and you have that on your side but i do think that you are going to have a lot of weak tais ahead of you before we get to that buy the dip mentality. you got to realize where we are in in marketplace. if you look at the extended

chart we are really overextended for a bull. >> what do you say. >> i think, again, couple a fridays ago i said another 7 or 8% we had a whole conversation about it when the sepp down 5% i think there is another three or four% left on the downside. i don't think there is anything wrong with that. can it overshoot -- you'll noy -- the whites of eye with will km in the form of vix over 30 >> more who more on the massive selloff let's bring in julian emmanuel the chief analyst at bte you've been sitting here on the desk since the entire start of the show you raised your hand when you said who would be buying the dip. >> why. >> we are buying the dip look at the last four day what is has happened is we have transitioned in the markets from uncertainty to fear. okay and all of us sitting around the table know that if you look at the last 30 years every time you boy fear it works out.

okay we don't think it's different this time. what we have been telling clients su look at last week's low at 2710, that space between 2710 and you pointed out the number, the year's low at 2532 is where you've got to be patiently looking for the stocks and the sectors and the situations and you want -- that you want to own because the fear at some point is going to subside. and going back to the fed you know we talked about this when we were with you a number of weeks ago, we felt at that time that the fed was probably in the process of overdoing it. we called for the fed not to hike in december we continue to think that taking a pass in december is the right thing to do, particularly since there are eight shots at raising rates next year because you go to press conference at every meeting, not four. >> but in terms of saying that taking a pass in december would be the right thing to do, do you think that's what the fed would actually do? or that's just what you would want the fed to do. >> we think the likelihood --

you know, clearly, the president has boxed the fed into a bit of a corner the minutes from last week have boxed the fed into a bit of a corner we think the likeliest outcome is they hike in december and a dovish hike basically look at the data, sit back and see how it develops. which could in effect have the same positive effect. >> why do you think that that's even in the realm of possibility considering all the fed speak we have had in recent days. we had rafael bostic of the atlanta fed yesterday saying the bar would be extremely high for the fed not to raise rates given the atlanta fed's raise forecast for growth for the next couple of years of course the data dependent he says but the likelihood of not taking that path would be very, very low. >> you look at economists consensus right now, the number is 2.5 in 2019 and 1.9 in 2020 versus three plus this year. that's not accelerating growth you look at inflation break

evens they are not accelerating. the commentary is one thing but it's anecdotal the question is you look at prices of automobile manufacturers, the stocks yielding 7%, trading on 6 times earnings, are they going to be able to pass on the price increases to the consumer? i think the stocks are telling you that's not going to happen. >> but if you are jay powell at the press conference in december and somebody asks you jay, why did you raise rates in december but effectively issue a dovish statement about future guidance, what data are you seeing what data would you point to that would indicate that there is a reason to back off of hikes you know early in 2019. >> well, we certainly saw a very slow housing number today. >> okay. >> we have seen those stocks come off if you look in the past, the housing stocks coming off and that looks like a very significant top we saw in january. obviously there could be rallies. but they tend to lead the broader market and the kpee by a

year and a half to two years and the fact is if the fed thinks it can thread the needle between causing asset prices to moderate and causing the economy to stay intact, that's a needle that hasn't been threaded in over 30 years. >> not his fault it's not you will powell's fault he is not threading any needled he is looking for normalcy i'll ask you a question. if the fed doesn't move or moves and get dovish suggesting a weakening. if there is a weakening in the economy why are you so bullish on the stock market. >> because, again, you are at this point where emotion is taking over. >> quickly, where -- i don't see any fear what's fear? market is down what six, seven% from the all-time high. >> i would -- i would say that over-the-last couple of days particularly this afternoon the selling took on a note of indiscriminate selling. >> okay. >> it's hard are to see. >> we don't have a commercial which is why i'm playing the game with you. >> fine. >> when on the way up when they go indiscriminate we never talk

about it's crazy that stocks go up every day and the machines are taking stocks higher it's only down days we say indiscriminate semg. indiscriminate buy are is just as prevailant but when we never put a bull's-eye on that same thing. >>keep the sfeed. >> always goes down faster than it goes up >> always goes down faster and what woe say is when you look at it we raised the flag here several weeks ago because we felt interest rates in general were getting to the point where it was going to affect the stock market and i think that's conclusive evidence to the extent that you till have earnings and, yes, this may be peak earnings at 20 plus% growth but if we do 7, 8, 9, 10% next year at this level of interest rates at this valuation stocks are going high sfwleer is there any chance -- sorry be tim -- the fed can go an eighth and split the difference and say we are data did dependent does that try to thread the need

sfwlool that will confused people. >> i like. >> too cute by half. >> we haven't had fractions since 2000 on the stock exchange an eighth would be too much. >> let me ask the question a little bit different you don't hear you saying. >> he is s&p 3,000. >> i'll even forgot outlook and say what i hear you saying is there is fear out there right now pick a spot markets are overreacting in some way and we think there is a place to step in and buy and you're not saying pound the table right now. but let me go back just to texas instruments because i think it was a very important message for the market not only were were semi conductors down 7 or 8% as you a group but talking about the impact on industrial and automotive, and basically the read threw for that is that some of the important parts of the kpee, biggest parts of the market that show weakness don't show signs of recovering. >> so part of the problem. >> as a stock or business. >> the sectors right now are

under pressure and seeing falling demand in the form of chip stocks that have basically going to give you that gauge >> so when you think about these types of responses in earnings season what has troubled us is the fact that companies that are beating on eps and revenue, if they don't guide positively the stocks get slammed anyway. we are seeing that all -- what that tells you is that at this point where the market is it is less about the ability of earnings to lift stock prices and unfortunately more about what the policy response is with regard to the fed and with regard to resolving or improving trade relations with china. >> julian thank you great to have you here. >> always a pressure. >> the man. >> a calm voice. a calm voice always. >> a calm voice. >> thank you very much. >> karen what's hon the buy list ed you said you would buy the dip. >> buy list, bank of america absolutely on the buy list all the banks acted terribly but on the buy list.

ups on the boy list. you know the retailers have hung in well. there is a lot i like but i don't feel that they are as puked out viacom. >> what's on your list. >> i own the home builders but i get longer in lennar lennar has been beaten up, the whole secretary are has been beaten up atrociously. also amazon. amazon you get a couple of chances to buy that. granted this thing is a beast on the upside process you low back at the chart on that but the discounted bid on that that's goods place. >> we have a programming note be sure to tune in to cnbc a market coverage of this selloff tonight at 7:00 p.m. eastern time a lot of us here on this desk will be there. we have gotten earnings alert on advance microplunging this as semi stocks have gotten wrecked. let's get to bob at nyse for more. >> achld is one of course of the two big semi conductor manufacturers the other one bell

the top line for amd 1.65 billion in revenues verdicts expectations of 1.7 backup down 6% quarter over quarter it was led lower by the graphics revenue in the computing and graphics division. that's the largest division of amd. has about 60% of revenue including the desk top and notebook processors and chip sets earnings 13 cents a penny short of expectations. the big problem is the revenue guidance as it is with the chip stocks 1.45 billion versus expectations of 1.6 billion gross margins look okay. 40% versus 38 slersz expected this falls on a bad day in general for semis. texas instrument fell short. issuing weaker than expected guidance attributed to a slowdown in demand among semi conductors across its markets. the maybe semi conductor etf the smh saw twice normal volume on a nearly 7% decline. that's the worst day since

november 2008. and the broader basket of semiss still in bear market down 22% from the 52 week highs despite the debacle amd is still the best performing stock on the s&p 500 this year. up 121 is% year to date we should note by the way the tech heavy nasdaq now in correction territory down about 12 peppers from the recent highs. finally a quick programming note hear from achld ceo lisa su tomorrow at 9:00 a.m. eastern time on squawk on the street. >> thank you bob bob at the nyse. looking at the after hours reaction to achld what stands out to me is intel is trading higher by 19.5%. granted on her light volume but it's up. >> but also throttled over the last couple weeks. maybe it's up because people saying maybe amd is not eating intel lunch maybe there is rotation back which makes sense in terms of achld goes and i was bullish on the which up and at the top and bullish on the way -- i've been right and very wrong but now you have to ask where

does it make sense i think she will do a good job explaining the quarter, the ceo. also $15 was a level we sort of topped out a number of times early this year. so past resistance becomes support. i'll say this though again dan is not here. you know the chips are the building blocks of everything. and taiwan semi down 4% today. texas instruments tim mentioned down another 8%. chips going down does not sort of august yur well. >> we had chipsnous of apple supplier yesterday ams which didn't help. d ram weakness wechb concerned. >> right. >> so the entire sector is having issues. >> look, back to september 2017 levels in the stocks so that tells you something despite the fact that the economy well before this moment right now was chewing along and we weren't questioning the cyclicality of where enterprise was investing in businesses and all the other parts, whether gaming, blockchain, all these parts of the chip space that are

reasons for people i think amd got ahead of itself. that may be esz to say after it pulse back 35%, where should it trade? at 25 times this is a $25 stock. >> still up 100%. >> yeah. >> to tim's point all the things that the chips were trading off off it you look at micron and overlay the chart of d ram pricing a disconnect you overlay the chart of d ram pricing now and you see where it should have gone should have followed that. that's what micron usually does but it got extended on all the other reasons. >> how much of the semi conductor collapse or whatever to call it to specific to them oversupply and you have a commodity type that pricing falls apart? and how much much that is related to the economy more broadly? i don't know i think that's -- but there is some element of specific -- specific to the semi conductors. >> well i think the tariffs have a lot -- i think the tariffs have a lot -- again we like to blame -- it's easy to blame the

fed. and frankly again i say. >> you like to. >> not this fed by the way but another conversation with that said they have nothing today with d ram prices appear everything going on in the chip world. nothing what so far. the tariffs on the other hand have a lot to do with it you can't ask the fed to back off are based on tariff talk that might well be exactly the right thing we should do maybe mcis ripping us off. maybe this is long overdue what do i know but there is a cost associated with that which you abrupt up the other day to think you can play the tariff game and not have market repercussions. you see it now you can't. >> the fed should be be asked to back up the administration policy. >> i don't think so. >> even though it's boengs potentially impacting the u.s. economy. >> i agree with guy wholeheartedly i don't think -- inl in our system here. i think the federal reserve will could what they need to do whether it's the right policy now and should have been the the

policy two years ago is a debate we continue to have. but i do think that the fed ultimately is going to continue to do what they have to do the cyclical story died in march. let's be clear when the stocks started selling off aggressively. >> let's get back to amd down about 24% off the back of earnings let's go off the charts with todd gordon of trading analysis.com how does it look. >> achld was trying to 23, 24, 25 that was the key support for my technical poif. i was trading 17%. the big drop the drop from the highs in the mid-30s is justified here. looking at this longer term chart and we looked at in -- this is not quite what i'm alonging for but we go back, starting are the shorter term first. this is the daifl chart. we can see the all technical algos watch the up friend. tried to get a bounce couldn't fell below that's around the $25 mark i mentioned amd looks like it could go lower. support from that the $8 low

earlier this year has been lost. this is the daily. up to the we cannily chart and get the context of where amd is coming from. maybe i can put reasoning behind the failure. same chart hit the weekly if we have it. it's amazing i want to show it to you it's just a long -- no that's not it we are rolling with it if you go back to the 2001 high at amd you connect the 2007 high trend line all you guys can do it at home we failed at uptrend resistance these are the hold ertz. on the smh what i find interesting from the credit crisis low is we had a nice beautiful symmetrical and pullback the next one here sm '16 27% when i when i captured the charts halfway threw the day we were a 27% decline this is still a little ways to go here. excuse me no let's go from the weekly to daily not quite to

27%. right now at 21% off the highs in smh that 27% symmetrical decline -- if you start to break through 82 on the smh that counterbalances all of the corrections we have seen in the course of this bull trend. at that point for me i would say bull trend over in semis but not until you break through that $82 mark as we show here looking at the size of the pullbacks for me are indicative if the uptrend is intact. >> todd we have been talking about semi conductors and the sector being a canary in the coal mine in the terms of the broader economy how it feeds in the end markets. have you seen a corals and you look at the chart and it looks ugly in semis and saying that's indications that the other sectors not economically sensitive aren't seeing a

bounce. >> for me i see the biggest relationship to semis in overseas and agy you look at chiends technology is highly erlt correlated but turning back for the u.s no the semis is such a dispersed sector industry group. i'm long intel against the 43 reporting earnings tomorrow. so i see more of an asian story dragging the semis done and not so much in terms of relationship back home for me. >> all right thanks for that todd todd gordon trading analysis.com we want to get you caught up on the markets in case you are tuning in. it's 5:30 p.m. on the east coast. hour and a half after the regular close. if you are just joining in, the brutal day on wall street. the dow and s&p 23500 now negative on the year np the nasdaq plunging near 4.5% firmly in correction territory. down 12% from its recent high. with today's selloff seven out

of 11 sectors are in a correction the material sectors is bear market down 20% from its high going to tomorrow's session steve grasso what should we look at >> you have to see if today's lows hold for tomorrow you have to look at those retracement leb levels from the february low 2532 up to the 2940 high pits out a 2629 levels that's the one to key in on because that's the last level of support before we go back to the february low. >> i think the worst thing- dsh we talk about this a lot but the worst in my opinion is we open higher tomorrow. that would be really bad if you are bullish most are. you want to see the open down 300 or so dow points maybe 40 s&p handles maybe the vicks to the 30 level that's october. >> how about a futures plunge overnight that recovers by the morning. >> down and then up. >> that's another scenario we see. i also think we have to watch europe right now we have to watch the spreads on btbs what are those?

the italian ten-year bonds and the you need to watch the spreads. also watch the dollar. we are getting near 15-month highs on the dollar. within about 30 pips -- 30 basis points on the dollar getting back to where we were in 18 months ago the dollar is a sign of flight to quality it is not necessarily a sign of anything more than also the differential between the fed and the ecb pch when that's wider and we have more risk out there. >> karen what do we look for tomorrow. >> i don't like the up market except that scenario which i could see. if china -- right now you would think china would open a lot lower. and that europe would open lower. but i would like a selloff there that -- where there is a bottom theren a a bounce. that's sort of acceptable. >> i mean there's been great reopen here we have had vrpgd earnings after the bell. we didn't have microsoft drop a doughnut visa with good numbers. big important companies remind

us the business is decent. >> on top of the tames tesla and ford both out after the bell both in fact higher after the close for more get to the fill low bow doing double duty on ford and tesla fl fifl. >> starting off with tesla that earnings call coming up in about an hour or so. when you look at tesla it comes down to this could they have turned a profit in the third quarter yes they could and they did. 290 a share way above what everybody else was expecting out there. the consensus was for a loss of 19 cents a share that's one of the take aways when you look at tesla also the liquidity goes from 2.2 billion in carbon hand up to $3 billion and the model three production plans refirmed. if you look at shares of tesla and a nice move after hours let's see what happens when the conference call starts and let's see what the tone and attitude is from elon musk on the call which starts at 6:30. quickly on ford that conference call has just begun when you look at ford it's all about north america continuing to be the profitable division tahoe

keeps the entire company floating the rest of the markets international they are a mess. big losses there they have however reaffirmed the full year guidance but what's interesting on this call mels aifr and we'll be back with sound from jim hackett what do they say about the restructuring? there was nothing. nothing at all in the earnings release about what they plan to say when they plan to get more details and if there are not a lot of details given on the conference call don't be surprised if the tenor of questions from analysts gets isn't that correcty because they were that way last quarter. >> all right phil, thank you. phil lebeau in chicago breaking down number from ford and tesla. both stocks trading sharply higher in the after hours session i don't know where we want to start guy. >> you start with ford revenue third quarter revenue miss i don't know if that's a big deal the guide for the full year is good you have to ask does valuation start to mark matter starks stocks up 5.5%

bulls say maybe we see a turn around adam jonas from morgan stanley might say something else i'm inclined to fade the movement forward but maybe this is a bottom. >> the problem was we hadn't heard from hackett what the restructuring plan and all of a sudden we have a better than expected quarter and raise that solves the problem. >> it doesn't solve the problem but people maybe the right reason maybe not we are past peak the sellers in autos. people considered the auto makers guilty until proven innocent on eps ford on a trilg 12 months is 5.7 times earning that's crazy cheap with a 7% dividend yield at some point the earnings matter but we are concerned about structural issues with the company. and i think the market needs to know. >> on your buy list, ford. >> no, i mean i'm long gm. that's not worked obviously a long time. but ford did say they dropped the 2020 target tonight. i mean maybe people thought they

would get there anyway, right. so the stock is still up i'd much rather have gm. it's not in the disarray that ford is. and it's ridiculously cheap as well i think with maybe a higher dividend i'm not sure at this price. but that doesn't even matter. >> is the dividend safe for ford. >> for gm yeah. >> i just interviewed an analyst on ford and he said the ditched is not safe. >> is not safe. >> is not. that's the opinion of one person that's out there. >> it's been a rumor and when you look back on ford you look back to the next support level being the '08 lows cut in half from here it's scarey but the other side of me is the trader type that when you look at a stock so beaten up down 33% pretty much everything is out there. you might be able to get a laggard pop in the name. >> for tesla for tesla we see a pop of more than 12% we saw a pop yesterday. >> and the day before. >> it's a three-day move maybe i was thinking the after hour.

>> got to get andrew left a lot. we kill him when he is wrong and he came out a positive note and here is the stock at $322. what's my sense on this? i said it before sometimes you get backwards on a name this is a name i've gotten backwards on. but if i look at this this move to the up side is setting foup are the capital raise. how will the stock trade if in fact they announce that how does it trade post-that comment. >> isn't this move saying no capital raise. >> i don't know. >> in the precaps. >> for the cash flow, right maybe so -- >> the cynics might say hey amazing how suddenly we find free cash flow in the machine that didn't exist before at a time when we have to roll a lot of debt. gotten expensive on the credit >> let's talk more about that. bus tesla earnings wouldn't be the without gene munster founder much luke ventures let's get to that point because that was a highlight

cash from operating activities $1.4 billion mainly due to significantly improved volumes and profitability of model 3 not because of various working capital items. no shell games or pulling forward. what does that say about the need for capital raise. >> i think it's unlikely testify to raise money for the fundamentals, the operations 69 business for the next year maybe as they progress for china and build a gigta factory he is -- but that's separate sfla you have to give tesla credit. they delivered on model 3. they talked in the letter about 30% improvement in the efficiencies of building a model 3. that's a key element to sustained profitability, which is the critical question here. >> they have gotten scale in other words. they reduced the labor hours needed to produce the model 3 by 30% in the quarter indicating the ramp is intact indicates what about margins because that seems to be another

thing wall street was hung up on. >> you can never mail anything in nothing is ever certain in the world of tesla but this is the most encouraging results because the opportunity around the sustain ability of profitability. not only that -- that's one piece, the manufacturing piece but there is a second piece which is demand. and i think one of the derek dsh within the letter they talked about the average trade-in -- this is people purchasing model 3s -- the previous car was purchased new at $35,000 and they are buying a $55,000 car. that is a powerful statement about how this car is the appealing. they don't have the mass market price yet. but appealing to people willing to stretch for that. when you think about staentd profitability there are two parts, demand and the manufacturing piece. they seem to be making a sizable step forward on that. >> the demand part of it of the 455,000 net reservations reported in august, 2017, only 20% -- less than 20% actually cancelled. people are sticking by the

thousand dollars petition thut in initially back in 2017. >> my question so gene -- you can't go back in -- prior to getting secured this was a $360 stock off a great quarter. the stock trading higher all on its own i'll ask you this. if you back out funding secured given this quarter, should we be significantly higher could we stee a stock that might actually be 420 based on this quarter food. >> if elon didn't mess up in the last three months the stock would be above 400 today that's base the on -- you think about the opportunity of a $60 $70 billion market cap relatively to the trajectory they are on. i'm not saying that's where the stock goes in the near term. but i think the company has a more powerful vision, the concept of accelerating the the adoption of renewable energy which has been lost based on his behave but his stock would be higher if not for his behavior.

>> but in terms of the short term you extrapolate this quarter in the end of the year ramp at this rate or somewhere near that. they continue the cash flow to be around where it was in the third quarter and then you throw on top of that the potential catalyst of naming a new chairman and independent directors that has to happen within 45 tai he is of the s.e.c. settlement. it has to happen in the next month or so -- i mean where do you sigh the stock going >> i think that there is going to -- it's moving higher in the near term. i think that there is still this bear case that the demand is propped up by the tax credits that are at $7500 going to $370 oh my point is that there is a bull/bear debate but when inspect report the september quarter there is flory step up in terms of the stock. >> the demand has been proven by the numbers at least for this size -- for in cycle and you've got a jacked up orp a specked up model 3 was a

slightly higher asp once you get through the demand i'm going to place in it because you expect it might and say i don't know the demand is there i get that there is a lot of people in the range that want to buy a cool car and reach because we knew the people were there already. is that fair >> i see the -- absolute different at the end of the day you talking about 400,000 reservations and keeping it that's unprecedented in the automotive world there is data that would suggest that the demand is in fact real. and at the end of the day it comes to this, is the car substantially better than anything else out there? and even though i don't own one i think that people purchasing them would suggest that it is. and that will continue to stoke demand. >> grade the quarter, gene. >> i reluctantly give it an a. and the reason why i reluctantly give it an a. >> the the call hasn't happened. >> you don't want to get in front this that. i tend to shy away from great inflation but look at this in the context of a tesla quarter

this is in fact a company that did what they said and a little bit more despite a massive distraction. it deserves an a. >> leapt can you more brewedly in terms of the tech selloff we have seen you follow closely a lot of the names hit hard. are there any you say that's a buy. >> tesla i think tesla a buy apple is a buy they haven't been hit particularly as hard amazon if you have a longer term view i still think you should veer clear of facebook and twitter for example. those i don't think -- i think there is more structural things that are headwinds for them. >> netflix. >> i'm still somewhat neutral on that i think given the valuation what apple is come out with, i still think headants. >> gene great to see you thank you so much. >> thank you. >> gene of loop ventures. >> how do you trade tesla. >> the going to says something telling. he said until elon messed it up. that's the risk in the name now. you have the pops in a stock heavily shorted but you get elon

one sentence in which oh orr an event away from screwing it up to guys nar bullish, cult-like people that follow the stock and i think it's good for 50 to 75 down to the down zblood would the stock go up if they did a capital rice. >> would it go higher as it has in the past. >> these guys said they're probably right maybe give. the quarter -- they are trying to build a $2 billion -- a plant in china maybe that's a year or so out maybe then they don't need a raise they pulled a rabbit out of the hat. the numbers came from no where my question to you, what steve addressed. >> i would essentially disagree. i think this is what they were setting up for, in terms of reaching the higher profitability. it they've been setting it up. no one plefd them because of the behavior. >> fair enough. >> gene, thanks again. >> thank you gene munster luke ventures guy. >> i love the guest brings him back in. >> i blame. >> blame me.

>> i think. >> we have an earnings alert on visa higher in after hours session. let's get to dedra in vancouver dedra. >> this is a story about the strengthening consumer spending in a she u.s. economy, higher wages, low unemployment, lower taxes. th's debit cards and that in turn benefits visa because vis aif takes a cut of transactions that it processes also earns a fee on payments that occur on the hunl global payments network last quarter payments volume totaled 11% whie while the number of processed payments grew 12% cfo telling us scuff that they expects the same factors to drive growth in the upcome year. he said that with the tailwind of strong global economies and robust consumer spending enhanced by the growth strategies we have outlined we look forward to another strong fiscal year. the analyst call did kick-off at

5:00 and wedbush says he is looking for few things the color of the health on the consumer, highways factored into next kwler stacks rate in the next year. b 2 b market and the europe substitution another analyst at moffitt nathanson says she wants to hear about competition how visa closes the gap with master card because master card has been outperforming on nearly every major metric the past year melissa. >> dedra, thank you. karen, does this help the payment space which of late had been getting hit. >> i'm long master carted they trade together despite the little differences i think itdoes -- it helps als the consumer is strong, the consumer is spending that part of the story is very much intact and the read through to retail and other things is strong from that. >> the 11% growth number it's impressive on payments and they continue to be in some ways non-correlated. but if the ceo is talking about

the strength and the tailwind of the global economy, i mean we are not talking about that let's be clear about that. i think theconsumer is rip roaring through the holiday season and then i think we have problems visa is actually cheap to master card for whatever reasons it trades about three turns cheapfer you put the same multiple on it this is a $175 stock. >> you are just ying us it's a sea of red and walds the drop 600 points negative op the year forerheev t dow we have more on what drives the we have more on what drives the selloff whenstewards of our clients' money. entrusted to do what's right. it's a mission. a guiding principle our firm lives by. charles schwab is proud to support more i "fast money financial advisors and their clients than anyone else. visit findyourindependentadvisor.com

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>> i f . >> i think they are going to move together. but the selloff, particularly the last hour was overdone. >> apple, it is only off about

maybe 3.5%, 4% up 20% for the year. apple, buy. >> explain the quarter, and then itgoes higher for her. >> do not miss our special market selloff "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 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 and of course, welcome to be the city of brotherly love philadelphia other people want to make friends. i'm just trying to save you some money. my job is not just to entertain