china business that's scrutinized heavily it's a driver for that company north america has just started to turn around any signs of consumer weakness, that they see in the report is interesting. also i cover it. you know. >> got to focus on it. all sectors lower today. we see where the buying opportunities are. >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlook noerkz times square i'm melissa lee. carter wirth, team seymour, dan nathan and guy adami a major selloff wrapping up the we can tom lee says don't worry, a 10% rally into year end is still in the cards. he is here to explain. plus the transporting getting slammed down 2% today. but one trader making a contrarian call on a looser in the group. he explains. the dwoo dropping 500. the s&p and nasdaq down% the selling in year end picks up

steam as worries about global growth slowdown hits the markets. it's a winter wipeout. the s&p 500 back in correction territory. down 12% from the september highs and closing pennies below the key 2,600 level, the lowest since april. is it all dounl from here and what should you do in guy adami. >> all dounl from here it's not all downhill but there is further room downside steve grasso talked about 2530 in the s&p, 2 the.5% that's not unreasonable. maybe you see tom lee's 10%. one never knows. tim has been on this carter has been bear ib. europe is slowing. the data out of china has not been good. there seems to be problems with banks. for more than just the fed reasons. so there are confluence of events taking place knocking the market down. i think it continues couple weeks. >> officially down 20% off the

highs in bear market territory the china data not encouraging. >> the i've argued the data has been more or less in a range with the last couple years but actually that started to tend down retail sales last night lowest print in china since 2003. by the way, this has been effectively a straight ryan down over the last seven years. again not happening overnight. but the rest of the world remember we were asking that question when we were going to catch up to the market can with he exist on our own? we can't i repeat, i think the ecb meeting this week. i think the dynamic in france is something making politics worse. a european banking crisis away from taking the market lower i'm not saying that's happening. but i think of the externalities most importantly we have not heard companies come out reaffirming guidance we have not seen the street downgrade and credit to ebidta

is the the at levels we haven't seen in previous two cycles for the market. >> fourth quarter earnings season is around the corner january getting the conference calls. what has changed in terms of the unknowns in the market at this point? do we still have a china tried war? yes do we know if tariffs are ratcheted higher we don't know what are the companies saying. >> i will get to that in a second the very new term the good news is this that sentiment horrible. the price action is horrible we have two identifiable events. fomc meeting and deadline on a government hudson shutdown friday december 21st tp. there is a scenario that we we could get a rally np every rally closed closed at a dead low maybe see a reversible i don't see a 10% rally from the lows >> even if you got it it doesn't matter. >> it doesn't. the higher we go until we get to what mel says now and get into january and start releasing q 4 results and giving q 1 guidance,

the trade issues there is still unzbleernt when you hope it's hopeless four things have been held out. >> carter always has a great line for everything. >> it's true >> earnings earnings will true it it didn't do it. well the election. the election will do it. no and then there was buybacks they will do it no year end rally. that's like a word salad great phrase i use that's not a thesis premise. >> a word salad. >> it's like maybe it happens maybe it doesn't here is the risk january is rarely benign january this year up huge. january 16 down huge are we coming in with a quiet january or could it be something extraordinary? >> well q 12016 was a disaster and frankly we had a fed meeting in december where the fed went everyone knew they were going. and we reacted like we didn't know i think 2018, 2019 excuse me q 1 is very similar setup because we were questioning global growth

remember commodities look at the dollar at fresh 18 month highs. the dollar is going higher if european politics deteriorates that's devastating for risk assets. >> that could be something companies warn about on the conference calls come q 1. we started hearing about that the last earning go around. >> tim mentioned the first quarter of 16. february 8th 2016 give or take when the s&p traded under 1810 but remember, china devalued the yuan in the year before. banks traded horrible. that was the day that jamie dimon nounsed he was buying back stock. crude oil reversed on opec news but the same events going on now. maybe we see a repeat of '16. >> one other point wfs happening then yield going down. that was not positive. that's one things about the fed setup next we can that a dovish hike may be the wrong reasons and don't set 2019ment at least equities up for a rip roaring year because of rates lower. >> in terms of the break of

2,600 how important is that. >> one thing about a level is that a authority the more authority it has the authority at that timive of the rchls if you break you break dramatically we know stocks and well defined tops the further it toy was that the more tension there is to break out everyone is watching it chartists, non-chartists, a break has major implications >> with stocks sitting in negative territory for the year and only ten trading days in left in 2018 it's not good look at markets tales from the crypt process. the s&p 500 has been three out of past 15 years but our next guest says not all hope lost still a 10% is on the table. tom low. fund saturate you are bullish. >> but not sitting next to carter it's. >> shake hands guys hug it out. >> in what form does the 10% rally look like? what sectors will take us there? >> well it's -- you know obviously we're working a short time frame

>> yes. >> but we know that markets have been moving quickly in the last couple of months five days we lost 200 points i think, to me, anything that happens between now and year end is a lot more about positioning than macrodevelopments you know like aaii sentiment bulls minus bears, it's the worst since february 12th, 2016 days before the market bottomed. from all of our conversations with clients, our clients aren't worried about a bull rally and missing out a bull rally they are worried about how much much a draw down they face we think most clients have gone neutral or even into cash. i think they made a determination it's late cycle. i think there is a bullish scenario which is everyone is off sides. and if there is any positive elements -- dan you ms. henninged a couple -- i think these are catalysts. and ten days could see a significant reversal. >> is it going to be the tech sector financials i mean what's the quality of

that ten% rally. >> this is tougher but i think the market is gravitating towards quality names. more like walt disney oh over necessary flicks sysco over fang. that's how people want to be positioned but that's a step they want to buy up. >> all your life have you been called an optimist by nature because you sound -- given the short time frame for the s&p 500 call and also standing pat in terms of bitcoin saying the mechanic has it wrong on bitcoin. bitcoin should be valued higher and the market -- there is a disconnect there -- i mean you are sticking by your guns here. >> you know, we're contrarian at the extremes that actually has markets more extreme moves we look more contrarian i don't necessarily think 2019 is a great year for equities but do i think people should be bearish and talking about a recession? i think it's too early to make that judgment and i see positioning.

that makes us bullish on --. on crypto-i think the story there is just about adoption and waltz. that's grown this year for us that's determined fair value. 93% of the move by bitcoin has been explainedpy active user this is the year they diverged i'm not saying the the market is wrong. i'm saying the think that drives and explains crypto, hasn't explained the market. >> another contrarian call. >> yes. >> so bad it's good. >> we actually -- we looked at 120 years of price history for g.e. it's back -- it's ratio to the dow is back to 1920. at least of bad news has been priced in. one of the significant developments this week is actually steve tusas upgrade not because he moved the market but it's evidence that a lot of bad news is priced in. and it's like the least institutionally owned. provides tosales is 75% discount to the s&p.

the least like among the industrials. so to us the risk/reward is there. but it's an ugly chart rta says he doesn't see any evidence -- cart ert will get me more dismissed >> it is ugly. at the lows in '09 there is a large concontinuing theant of players believed g.e. was zero upside down down in terms of lefrpg if not bail outit would have been zero is it better now. >> yeah. >> i don't dough -- what is the situation? >> there is written fact -- the "journal" had an article about g.e. number one the cds is 240 wide now. when g.e. was last $7 it was a thousand wide. credit saying i'm more comfortable. there is a lot much estimates is that om some of the flagships turbines at 56 billion stock at 96 billion. they this had change in management maybe things go right and good things happen with g.e. >> hope you're right tom in

terms of markets tom has been enjoying the holiday -- he has been in full holiday spirits of late. >> holiday. >> see there he has. >> look at him. >> wait, wait that a photo shop. >> no, that's real, right, tom. >> that's real. >> you got some moves. >> toes pointed. excellent. excellent photo. >> disturbing is what is excellent that's one word. >> tom i think it's excellent. >> no you don't, mel i see the look. >> you see this up ten%. >> i think the important thing is not what happens between now and end of the year. last year we ripped after the tax cuts and the end of december into the new year and kept going. it set up for a 12% straight line down. we escalated up. elevated down. that's what makes me nervous about any shenanigans late year and it's not something i want to get involved in. >> health care getting crushed as a report about johnson & johnson weighs on the sector but the chart master says don't

count it out yet not all bad this we can. facebook up 5% is the stock ready to rally? we have the details. live from times squa iren new york city. much more "fast money" right after that [leaf blower]

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welcome back to "fast money. check out johnson & johnson shares tanking follow reports the company was aware of asbestos in baby powder products for decades. the stock falling 10%. its worst day since 2002 the move taking down the whole

health care sector by 3% making it the worst performing sector in the selloff what did you make of the action of j&j on the headline. >> the headline i'll let the company defend itself. looking at the performance of the stock and that it leaned into united health care and other stahl warts. disturbing we lose leadership by the day. johnson & johnson was basically near the highs in the last couple days you had united health care sell off 7 or 8% this is not a headline that's based upon a cyclical nature of the economy. let me give dan nathan a word that he likes to use an idiosyncratic movement which might not be idiosyncratic this is your argument. i want to pat you on the back a rare occasion. >> let's not touch but here is the thing. i think it's important to remember this is a glass half full to glass half empty petition when you are the bull market you poopoo things but

when in the bear market you shoot first and ask questions later. >> i look at the same chart with johnson & johnson. this time last year it topped out around 150 couple weeks ago the stock traded 150 we have -- carter looking at it now he will attest you have a major double top now does the do the whole back to where it was in the summer down to 120 given in headline and given the fact that joon-pyo morgan said it's overreaction the year lange is here for a while. there is a chance it does print 120 the next few weeks. >> despite the johnson by johnson & johnson. health care is still the best performing sector this year. but as the market turned the group has been under the weather this month two-thirds of the sector in correction territory or worse. the sector on track or the worst quarter since the first quarter of 2016. carter says selloff is buying opportunity. tell us why at the plasma. >> on a 2-quarter basis it's the best relative performance since the 2011 low in the s&p which is

the defensive prospects or characters of this sector will almost math matically provide the safe haven one expects the news notwithstanding relative to s&p this is definitely i place i want to be long and i would make that argument to you. so here is the xlv no annotations judgments anything by me let put in lines what we know generally speaking is that the health care sector has maintained its uptrend even with the current selloff we basically come down to a level where i'm making the bet in holds. but, again, even if it doesn't, and everything goes down, this more likely than not will offer a safe harbor relative performance. now this is the key. the same chart on top. same trend line. and it's all about opportunity cost when this sector sells off during the october swon, what does it do it goes straight up relative to

other equities when it sells off again, right here, what does it do? it goes straight up relative to other equities and then one more time when it sells off just here what does it do it outperforms and that's what alpha is all about. it's defensive it's got elements. and the j&j thing as bad as it is it's such a big weighting in the sector that it hurt the sector this is a longer term chart. what we know is the sector which lange wishlange wished for a lo time it broke out. not only was it lange wishing it was underperforming the market puts the lines on the bottom and take a look. that's the relative performance during the bull phase during thes sideways performance. but the fact we broke in the downtrend on a relative basis is karri very construct every

i like health care as a relative trade to the market. if the market goes down health care goes down, you have a better bet here than anywhere else maybe utilities the exception. >> carter why don't you come on over it's not exactly inviting back but he is here. >> empty charity table at dinner >> i know. weird. >> what's happened. >> johnson & johnson is about 11% off the xlv. >> that's right. >> it it has another 10% -- can the xlv go higher without it. >> or can it still outperform? most important what to do with j&j it's a wide holding in many accounts there is an old saying first loss, best loss. for everyone that sold today they are talking about it over the weekend. committee's meeting boards saying we have to do something if you do see usually hit like this it's better to take measures and go from there. >> that's the fifth one tonight. he is not saving anything for the we hadding >> he should have a list.

>> gees. >> he is mr. add annual. >> word salad is my favorite sometimes i feel like it's word smoerg as board. >> cornucopia of charts. >> it's amazing. >> i was going to throw friends ever friendless out. the i love lucy episode. you don't remember that. >> no. >> sorry. >> i did see it in the first run. >> i don't care. back to health care. if forced to choose a defensive sector, tim. >> look, i think health care earnings are more defendable in this vitamin even with the cyclical headwinds for the economy. the health care secretary are was the place toite li hide out in the growth scare in 2016. i would point out the market held in i mean the health care sector way long relative to the rest of the market and can't defy gravity. >> it was underperforming the past three years only just started to come to life i mean it underperformed. >> well i lock -- i would pretty much this from j&j trading at roughly 27 times, 28 times

injures, not terribly cheap. maybe not they're not health care look at unhp also not cheap. because there was earnings to back it up granted your chart point out at a time other stuff ripped these were underperforming because they are more conservative. >> for more on johnson & johnson health care ugly day go to cnbc.com you're watching cnbc "fast money. here is else is coming up on fast >> yup, it's been a train wreck for transports this month. as the group plows into bear market territory but there is one trader that thinks there could be a buying opportunity amid the wreckage. plus don't look now, but after a rough year, facebook is soaring this week. is the worst over for the social media giant? we will explain. much more "fast money" right after this ♪ you've got a friend in me ♪ i think we should do that meeting tomorrow.

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get ready, because we're helping leading companies lead with digital. well become. breaking news out of the white house. let's get to eamon javers running us on the fastest line

eamon. >> hi, melissa, the president of the united states has tweeted ou he select add acting white house chief of staff going to be nick mulvaney, the director of the office of management and budget, also the official in charge of the consumer finance protection bureau which has been undergone a name change under his tenure the white house though, the president in the tweet saying he is acting white house chief of staff. so leaving open the possibility that he might not be the permanent selection here he might be simply a place holder or responsible as all things in trump white house that plan could change and he could work his way into having the president drop the acting word from his the title so we will wait and see where that goes. but nick mulvaney is somebody the president turned to time and time again when he needs competent staffing in the white house for high profile jobs. and somebody who is a former member of congress will have experience dealing

with capitol hill. experience dealing with republican leaders on capitol hill knows them all very, very well and now will be the acting chief of staff at the white house, melissa. >> the president has gotten a lot of nos it seems at least reportedly eamon nick airet ayers turned it down chris chisty turned it down saying now is not the right time should we read anything into that. >> i think this is a difficult choice for somebody to come in from the outside with a chris christie first of all there is the strained relationship with jared kushner and the -- chris cli test involvement in prosecution of kushner's father years ago and the fact that christie was on the transition team and pushed out christie sort of got in on again off again relationship with the president which seems now it's off again as of today. that might have been a tougher sell to come in and run the staff from the outside nick ayers was somebody the

president wanted he is a 36 or 37-year-old insider in the white house who has been the chief of staff to the vice president and wasabi all accounts the the president's first choice for the job but he decided for his own reasons that he wanted to move back to go are georgia for family reasons and otherwise and did not want to take the chief of staff job it will be a very tough job for whoever takes it. >> all right eamon thank you for phoning in eamon javers at the white house. time if for final trade. around the horn carter braxton wirth. >> fom lee as disney long. >> tim. >> yum the one not in china by the way has been defensive stay with that brand. >> dan. >> yes fedex we are doing a contrarian play. >> we have amazing pages coming through. >> we do. >> and stephanie larrett if you put the camera on sthes leaving. went by like that she is moving to bravo i believe that's the next assignment. >> yes. >> and i'm sure she will be our

collective boss at sometime. congratulations, stephanie for my final trade there mel. >> yes. >> i think the retailers might you see bounce i'm no 10%. but macies might get done. >> that does it here on fast see up monday. >> "options action" starts after the break. >> oh, a puppy

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and accessoriesphones for your mobile phone. like this device to increase volume on your cell phone. - ( phone ringing ) - get details on this state program call or visit hey there, live from the nasdaq market site new york city times square the guys getting ready for the show in the meantime here is what's coming up next. >> houston, we have a problem. >> stocks have spiralled in correction with the fed decision, a looming government shutdown and options expiration next we can we show you how to protect yourself from more pain. plus retail stocks are reeling. with just 11 days left until christmas. and mike khouw and carter wirth say the next retail shoe is about to drop. they'll lay it