last year it was easy in retrospect to say everyone was so enthusiastic and bullish and tax cuts were coming and the markets were at a high of that was a little warning sign that people were getting too exuberant. >> well, the administration won't be there. >> it will be the ceos. >> we will be watching that. safe travels, sara. >> "fast money" begins right now. have a great weekend. "fast money" starts right now live from the nasdaq market site overlooking new york city's times square i'm melissa lee. tonight on "fast" don't call it a comeback the surge off the december low is raging on as the s&p 500 climbs out of correction territory, but there's a number of interesting names sitting out the rally that could spell trouble ahead. we'll explain. plus tesla tanking after elon musk announces job cuts and outlines a difficult road ahead. is this stock too risky to own first we start off with the market rally the dow up 350 points on signs of peace during the trade wars

china offers a way to eliminate the u.s. trade imbalance industrials leading the charge we've seen this story before, so can you trust the trade deal hype if so, does this put the fed back on the playing field this year >> we were just sampling a little prince there. >> tonight is a historic night but we'll save that for a little bit later. there were a number of questions you asked at the top of the show and i think i remembered a few of them. can you trust this rally i thought it would fade 100 points ago so clearly i was wrong on that. if there's any glimmer of a trade deal maybe we get back to 2710 on the s&p which if you recall was a pretty big level of support. past support becomes resistance. that's the upside. in terms does it bring the fed back on the table? my opinion, i don't think they have been off the table. maybe their language is such but i think it's full speed ahead. in my world, full speed ahead means three rate hikes this year

and they will continue to whittle down the balance sheet. >> quite a difference in the markets. yesterday's trade headlines was a flash in the pan today going into a long weekend even after this big run off december lows, people are willing to be long off these headlines. >> i don't think anybody wants to go home and have headlines over the weekend that the deal has been done. i'm not going to use the term fomo, dan. >> you just did. >> but the pain trade is higher. everybody and their brother called 2630 or 2620 or 2600 the place you're going to rally up to we're now through it how much through it? i don't know but if you look at a handful of stocks, some of these are stocks that have been bottoming over the course of two to three months, so not everybody hit the bottom in december i am talking about the rest of the world. so you can make an argument that what has changed, what has changed is the negative feedback loop from the fed. if nothing else, the fed has

been forced to look at their language and change it and i think that's important for markets. >> the government shutdown also changed. trump is much more in a position of needing to have some sort of a win than at the beginning of the month, i would say. >> the market is -- when those two things get resolved, that's bowing priced in right now let's say there's a resolution on trade and a resolution on close the government, don't close the government, is it going up 14% off the low you could classic fade the news. >> listen, we've had these groups that really got slaughtered in the last couple of months of last year that had a tremendous reaction. we've been talking about the bank stocks. the follow-through from some that reported earlier in the week and they opened up down and closed up higher and continued to follow through. some of those gains on goldman and bank of america were astounding and they held those and it's really important.

>> it's really catching on. >> catching on with dan. >> we started january 2nd and had this massive revenue miss by apple. i'd be surprised if we do not see that among some massive u.s. multi nationals specifically in technology so we have this period where everyone is pretty optimistic about what q2 is going to look like right now gdp has been priced to 1.5% i think the guidance of maga is what we've got going on. >> is the market expensive here? say what you want about earnings they haven't been particularly fantastic. the price action has been pretty good on the back for example, a skyworks, which is now higher than it was when apple made that crazy announcement that stock in my opinion should be lower and it's not. a lot of these stocks are saying, you know what, all the bad news has been priced in. going forward, enclosure sailing ahead.

if you're in the bull camp you have to wrap your head around what's the right multiple in a slower environment. >> the market has wasn't when it was around 18, 19 on the s&p and it didn't care in the early part of this market you can make an argument the s&p is attractive here that is a function of where you think the federal reserve will be. >> last year when we had the s&p trading at 18 times, growth estimates were much higher than they are right now so we've had this downshift in growth globally. it really does speak to the optimism mike santoli was just saying at the ending of last hour the optimism was abound at davos last year. it's not like to be this year. >> the optimism is as excessive as the pessimism was in late december >> is it >> i think so. the further we go up, does that make it more vulnerable? >> you tell us. >> i would argue -- we talked rsis last night, carter, you

know i love your rsis. there's no question a market that moved 13% in 17 sessions has obviously got a lot of enthusiasm and momentum behind it i will also say if you look at where people are sentimentwise, ai, bull/bear readings or positioning in the sports, if you look at the spy, the spider, the shortcoming has not been -- >> can i ask a question here >> it's your show. >> would any of you feel better if the move of 13% off of highs, 12%, whichever stock or sector you're going to cite was made over a period of two or three months versus a period of four weeks? >> i would i'd absolutely feel better about it just a slow trough to the upside. >> but given the sharpness of the downturn, imean does it make sense that the recovery is sharper as well? >> it's a v. >> it's predicated on a preceding plunge. >> why is this vulnerable then >> at some point, just as you

can get too far down, you can get too far up said differently, fomo is both ways i've got to get out of this before it gets much worse. i've got to get into this before it gets much better. >> here's what i would say to people not fully invested right now because they were scared at the end of december. this market has no reason why it gets away from you earnings are not going to be that extraordinary you're going to have the fed starting to give you some sense they're going to be data dependent again. that could be my glass is half empty. so i know it's a difficult time because everybody said, you know what, i don't want to own this market and a lot of people sold into weakness, whether it was tax law selling or they were really truly scared we had another 20% to go. >> playing the role of the person at home, though, take a look at the netflix quarter. the netflix quarter, you would have thought that was 50% off of the december lows. given that earnings report, which had hair on it, that the stock would have given up and

that would have been your chance so you're looking at this and thinking, okay, so earnings season is not going to be easy ahead. but you got this example of netflix. every reason to sell the stock because of the sharpness of that recovery and it didn't. it held up pretty nicely. >> my haircut is outstanding it's a great haircut. >> it's all right. >> no, it's more than okay, it's outstanding, number one. >> saying your own haircut is outstanding is like giving yourself a nickname, right >> i've done that before as well hold on, i was going to make a point. >> you can both make points. >> the market was up 300 points. if the dow was flat, netflix would have been down another $5 so that's my counter to your initial question. >> you know, last night, and i don't know if you were paying attention, carter said something really important he said the september new high in the s&p 500 wasn't a real new high because almost every group in the entire s&p 500 was basically in correction

territory on its way to being a crash. the only reason we made a new high was because of maga, a handful of mega cap stocks i'm just telling you -- >> that's why the market is not going to get away from you. >> i'm making your point even look at jpmorgan that was trading at $97 the morning that it report and now iclosit closet 104. it's come a long way so the notion that it's going to break out of that downturn and go back to the prior highs, what's going to make that happen >> vs are high, you don't usually bet a v. it's not a little v, it's a big v. i think it's too far. >> do you want to ask a question >> can i >> keep it short. >> what do you do where emerging markets bottom first and are a mess -- >> if you look at the em, the relative outperformance is impressive but it's not an

instance of actual outperformance, it's just that they're less bad than u.s. equities there are u.s. equities that are absolute up and relative up. em is a muddling thing and has no character, i would say. >> let's tie this up with a nice little bow would you be long in the market here >> what's my timeline? i hate to do this to you because there's a lot of questions -- >> six months. six months. >> for six months. no, i'm not putting new money to work. >> i like that answer. >> dan. >> i'm not i think there's a good shot that we retrace half this recent move. >> guy. >> if the move to the downside was irrational, the move the last two weeks or so is equally irrational just because it's going higher doesn't mean it makes sense. people i think confuse that. so to answer your question, i do think we're going to retest. i've thought that for a while and been wrong but i think there's a very good chance we

retest the next cup of weeks. dan says there's a big w winner of the trade deal. and tesla's stock down after elon musk lays out ahead later, stocks on a tear since december lows but there are a number of stocks sitting out this rally we're li ftiverom mes square in new york city. much more "fast money" right much more "fast money" right after this which i used to offer health insurance to my employees. what's in your wallet? hey. i heard you're moving into yeah, it's preful.ent. this music is supposed to relax me, though. ♪ maybe you'd mellow out a bit if you got geico to help you with your renters insurance. oh, geico helps with renters insurance? good to know. yeah, and they could save you a lot of money. wow, suddenly i feel so relieved.

you guys are fired. get to know geico and see how much you could save on renters insurance. you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.

don't get mad. [ neighing ] [ screeching ] ♪ [ sigh ] it's bring your own phone, not pony. so i could have taken the bus? yeah. bring your phone. switch your carrier.

save hundreds a year with xfinity mobile. plus get $100 back when you bring in an eligible phone. call, click or visit a store today. welcome back to "fast money. " tesla tanking today after elon musk announced they will cut 7% of their workforce phil lebeau is live in chicago with more on this story. hey, phil. >> melissa, when you look at what's going on withtesla, it' pretty simple. they are eliminating about 3100 jobs and the reason is they need to lower the cost of the model 3. in an e-mail to employees, elon musk said while we have made great progress, our products are still too expensive for most people how expensive is the model 3 they talked about some day selling it for $35,000 the reality is that most model 3s on average are selling

between $50,000 and $55,000. elon musk would like to raise the volume and bring that average transaction price down somewhere in that $40,000 range, maybe $35,000 to $40,000 in order to do that, they have to be a lot more efficient and lower their costs, which is why when you take a look at shares of tesla, keep in mind that he also said today they would be likely posting a profit, a tiny profit in the fourth quarter it will be lower than the third quarter but it is in his opinion going to be a profit however, going forward, we're in that area of lumpy deliveries. not entirely sure about how much demand is there, especially as they try to lower the price point at which they're going to sell the model 3. >> phil, last year, i believe, in june or over the summer they had a huge -- they also fired some staff and then hired back a lot of people. >> right. >> when you take a look at the staff levels over the past, let's say, nine months or so, is it actually almost the same?

so this 7% reduction in the workforce actually looks to be the same number of workers again? >> he said today that they increased their hiring by 30% in the last year. so it doesn't look like they're getting rid of everybody that they brought on. melissa, people are misconstruing the fact they added all these people, ramped up their production of the model 3 and met their goals with the idea that they can continue at that level of staffing you just can't have that many people building these vehicles it's not cost efficient over the long term. that's why they need to become much, much more efficient and lower their costs. >> okay. phil, thanks phil lebeau in chicago for us. so is the stock too risky to own? i don't even know why i'm asking this question to you, tim, because i know the answer. you're going to say no i mean yes, you cannot own it. >> i'll point out first if this was ford or gm doing this, we'd be impressed and rewarding the company. we kind of did that with gm but of course they're not.

this is the whole thing about tesla. the risks are not around their battery, not around the technology or not around even the ceo. they are about ramping up. to me that's the big risk because tesla, operational efficiency and execution to grow this into a mass market, this is a mass market car, has been held in question. it does make you question whether what they did last quarter is sustainable also that tax cut i think is a lot more important to tesla than people thought. >> the subsidy. >> the subsidy, excuse me. >> whatever the reality in terms of the cash, we'll finding out when they report earnings. when you hear about staff reductions to make something more efficient or profitable, you immediately think about what their position is and you think about them building a factory in shanghai and continuing to ramp up production and meeting targets and wanting to remain gaap profitable. maybe they have to do a capital raise. that's back. not that it's gone away but it's

back in the forefront. >> a couple of months ago we said they took the capital raise out of the equation when they talked about being cash flow positive listen, i do think there's a chance for a capital raise as well the fact that the stock has rallied historically, i don't think it does at this time the stock has been in the 275ish to 375 range it's vacillated a number of times the last couple of years it feels as though they'll revisit the 275 level. >> that's just it, it's a gambling chip. actually the high is 385, the bottom is 250. it's done that six times when you drop 35%, you've got to get 50% back and it's done that. nobody is winning in this. it has nothing to do with whether he's tweeting or smoking or whether he's cutting or not cutting or he has a tent or doesn't have a tent, it's just what the stock does. it's one of the highest beta -- >> i think you have to remember they're going to lose on a gaap basis a billion dollars this

year so i mean it's not like things are getting that much better they sold 7,000 more cars quarter over quarter in q4 so this is one recession away from being in a very tough spot. don't forget, spacex also cut employees last week too. >> for more on tesla's difficult road ahead, log on to tradingnation.cnbc.com i'm melissa lee, you're watching "fast money. here's what else is coming up. >> i'm going all in because i don't think you have the spades. >> not so fast, matt damon casino stocks are surging but there's one name that's gone too far too fast. >> plus -- >> orange mocha frappuccino. >> and you'll hear what the chart master ss eein starbucks he'll explain why he thinks the stock is about to heat up. much more "fast money" after much more "fast money" after this break..

atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish.cool! at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & this shipment will be delivered...

your but as you get older,hing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. welcome back to "fast money. " the markets surging off those

christmas eve lows the s&p at a correction. a number of names have sat out the rally. dom chu is breaking it down back at headquarters. hey, dom. >> oh, what a recovery it's been, melissa, after the carnage on christmas eve the s&p 500 has risen in v-shaped fashion and gained 14% from that near term bottom that's what the average s&p 500 return is for a member stock during that time as well there are outperformers and underperformers. let's focus on manufactusome of that have sat out the recent rally. other retailers have sat out like macy's, which is down around 9% during that span, thanks to disappointing results from the holiday shopping center numont mining down 8% because of its big stock and cash purchase of gold corp altria is underperforming but up

a percent as investors take stock of the future, not just tobacco, but vaping trends and cannabis delta airlines up after an up-and-down ride for shareholders given concerns for future guidance. those are a sampling of some of the underperformers as traders try to evaluate whether some companies and stocks are better positioned to catch up to the market's reechbcent run than ots back over to you. >> thanks, dom have a great weekend dom chu. are any of these names about to catch up to this rally or will they be left in the dust. we thought we'd play a little game of trade it or fade it. numont down 8% since the market low. trade it or fade it, tim >> my tendency would be fade it but i'm not -- fade it, fade it. consolidation in the gold is not a reason to buy the sector

the bottom line is underlying asset prices are not valued the way they were five to ten years ago. >> how do you feel >> i think gold has a lot of momentum i think it's got some surprise potential this year when other thing will disappoint. >> so you would -- >> he's a trader. >> trade it. >> chief swiz ee ee eel -- it s be getting life again. if the dollar is going to weaken with a fed that's turned dovish, i think gold gets some giddy-up so with carter, i trade it. >> we go back to guy for macy's. trade it or fade it? >> i'm going trade that one. >> nicely done. >> thank you, i appreciate that. if you look on january 11th when they reported, i believe the single worst day in the history of the company as a publicly traded company, the volume was tremendous in my world that's a bottom.

the story hasn't improved all that much, but you could absolutely see the shares continue to rally. so in this game when we're looking for moves to the upside or downside, i think the downside is over for now i would trade it. >> yeah, i see no absolute reason to even look at this name, just fade it the average stock is up 13, 14%. >> that's why we started this segment. >> it hasn't moved i don't know why you would get near this thing. all of us and we're in agreement that we're going to retrace some of this move why would you want to pick at the worst performing names >> so you're a fade it >> i would trade it at these levels and here's why. it was being pushed around because people thought of it as a secular play but a cyclical play they were all getting destroyed. the rest of the discretionary names in retail have come back people are pricing this like it's going out of business

it's not it's not a great company, it's way too cheap. >> we're going to move on to altria carter, trade it or fade it? >> fade it this is just boring money. if you want to sit for a defensive den dividend, maybe it gets cut, maybe it doesn't quintupling the s&p, but its best days are behind it. >> it is time for the final trade on this friday show. carter braxton worth, final trade. >> gld. >> tim. >> i think the oil space is interesting. i think the oil services have been destroyed this year i think halliburton is also a very cheap company that at least has been played too hard to the down side. >> dan. >> stick around from oa. >> big one. >> i started saying it's a special night. ten -- can i say it? happy ten-year anniversary option desk.

melissa lee -- it's amazing. >> that's fantastic. >> final trade. >> energy reports at the end of the month. >> that does it for us n'e you pack here tuesday. dot go anywhere. ten-year anniversary right after this break this break oa by rootmetrics and j.d. power. buy one of our best phones, get one on us. i that's the retirement plan.e, with my annuity, i know theretee. it's for my family, its for my self, its for my future. annuities can provide protected income for life. learn more at retire your risk dot org.

♪

hey, we're live at the nasdaq market site it is our ten-year anniversary here at options action we've got a very big show for you. here's what's coming up. >> you did it! congratulations! world's best cup of coffee >> investors have been hot for starbucks, and carter worth says the shares are about to perk up even higher. he'll break it down. plus -- >> viva las vegas, baby. >> casino stocks are on fire, but mike says one name in the bunch is about to crap out he'll give us the trade. and -- >> look, up in the sky, it's a bird. >> it'