>> and everybody more incremental bad pr how much does that have at this stage? what are we watching tomorrow, apple? >> apple, 3m before the market opens because it has been disappointing last year and industrials in focus after caterpillar. >> that does it for "closing bell," thanks for watching >> "fast money" begins right now. >> "fast money" starts right now live from the nasdaq market site overlooking new york's times square, i'm melissa lee. tonight on "fast," a major moment for the market with earnings, the fed, trade all weighing on wall street this week meanwhile, stocks are stuck in the danger zone. wall street's biggest bear will explain why he thinks there's more trouble ahead. plus, it's been a rocky start to the busiest week for earnings but the chart master says there is one unexpected stock. we start with earnings arm ma ged don. caterpillar out with a major

report, stock down 9% and invideo, stock down 15%. the two earnings disasters wiping $20 billion of market cap off the table weighing on the broader markets rolling into the thick of earnings season we'll see more pain and who might be the next victims to watch, guy. >> yes, you'll see more pain you'll absolutely see more pain but the one i'm watching is mcdonald's and mcdonald's reports before the bell on wednesday. as you were saying, a lot of people say apple, mmm, but i'll look at mcdonald's why? last quarter was a great quarter. u.s. comps were in line. where they really beat were international comps. they were looking for 2.6%. can they continue that growth overseas you're seeing a slowdown in europe, see what's going on in europe so for me mcdonald's is a huge tell this coming wednesday before the bell. >> and you think mcdonald's will be a tell unlike cat pillar? because i feel like mcdonald's

falls into the category of starbucks and mikechy have seen good reports in the face of a chinese economy. >> and i would put starbucks and mcdonald's in a place where defense is how people have played this market and defense comes at a price and guy could be right if these guys guide head we understand on labor cost which are right there for them in terms of global expansion which china is also a big part of their story, not as much as china. i think mcdonald's if you look at the charts, you can make an argument there's a double top at 190. the companies have been the ones investors have felt the most confident about for six to nine months if we look at what happened today, something like caterpillar is just another indictment on global cyclicality. i actually think these numbers from caterpillar weren't that bad and when they guide around 12.25% for next year, this is a stock trading at 11 times earnings, maybe inside of that if you put a 14 multiple on this which many people on the street have had no problem doing in the past in less growth of an environment, you got a $170

stock. you have to be careful with some stocks getting thrown out the window. >> it was the biggest quarterly. i don't think the numbers were that bad when you read through it and see the headlines of the biggest quarterly miss since '08 it gets everyone panicky the numbers weren't terrible but it makes it impossible to buy that space, that sector. it's now 10th company or. >> the question is, does the valuation reflect what is going to be a flat growth for china for the rest of the year >> yes, it does. >> i agree with tim. i think it wasn't that bad for a company that doesn't have a super high multiple to miss by 50 cents or so yet it was down that an overreaction on the flip side, nvidia, that was bad. that was very concerned to me. >> but they had an overfly issue originally they were trying to burn off whatever oversupply they had with that bitcoin bubble so that you saw play through but the gaming, the data centers and

everything else is concerning. >> the data center is extremely concerning. >> and it's still even down this much as it was today i wouldn't be surprised if there's more down side to come. it's not cheap. >> i think one of the big issues hear what nvidia is the ceo gave guidance on this quarter which was announced in the middle of november so the lack of visibility that happened somehow unfolded in the past month and a half. >> sounds like apple what apple has been doing. >> exactly so it will be interesting to hear on the conference call when they report their results in february what the degree of deterioration they saw was in the quarter. >> what happened i mean, tim mentioned, within 60 days the story changed at apple in a significant way and within 35 or 40 days the same thing in nvidia i think they have -- quite frankly i would think they would have more clarity but i guess i'm mistaken and they paint a much different picture in november than they are now to karen's point, stock isn't cheap and now you have to question going forward, you know, they've been given the

benefit of the doubt for the last two years do you still give them the benefit of the doubt going forward? >> how much did they know about? i'm not saying they were doing anything nefariously, but what happens if they did know about it and were waiting for it to turn and sat on it and it's not turning, it's turning down and we're looking at the worst growth numbers out of china for just under 30 years. so this is real. >> the problem with nvidia is i don't think people know how to value this company this is a company that in the times was in the most go-go of spots, whether it was bitcoin, gaming, places where they thought there was unbridled growth at whatever price you wanted to pay and now at 20 times -- 22 times trailing it's half of where it was but i still think at these levelsaretx and gaming is still a problem with them, i don't think we know. >> we want to know if there's an extrapolation to be made with nvidia and/or cat on their sectors. for nvidia is extrapolation to be made to rerate the semiconductor sector which is

basically up until the open today of 20% from december 24 lows >> you see the companies doing well, the semis doing well are companies like lam research, like xilinx focused on 5g. now nvidia makes you wonder, has enough time passed i think xilinx and lam research go higher now karen's point, nvidia has some limited down side. >> i think december 24 -- it shouldn't have been there, never should have been there but we had a sharp bounceback. i think there's down side. the stock is not -- i don't know, part go-go, right? there's the fundamentals and the go-goness of it. how much sort of short term momentum money was in it is it all gone now i doubt. >> it and how much of that was positioning on both sides where people just had to get rid of it by year end and then they had to buy it back because it was the most damaged so a lot of large cap tech names

are these nichy little spaces that really directed the overall market on a bounceback and probably running out of gas. >> i think semis were the first ones to lead us lower in growth head winds back in june of last juror. they got overdone. we have carter on in a little bit. the charts are very important for some of these extreme momentum names and i would make an argument that semis bottomed and fwlebroke that down trend. and carter will have many charts about this fortunately but i think the semis right now have priced in an enormous amount of global cyclicalities. >> is there an extrapolation to be made for caterpillar? >> if we look at uri, that's 90 plus percent north america focused. that was a different story i don't think cat north america -- i'm not sure. i think those are a tale of -- potentially a tale of two cities different end markets. >> i think when you look at the industrials, they've had an

incredible bounceback. specifically when you look at boeing boeing got it on the chin today as a peripheral from cat but there's still more when you look at the bounces that these charts have more down side that is possible depending on what guidance they're going to give as well. >> i'll say this about earnings. the s&p for this quarter is you've had earnings come in at 3% industrials have been the steadiest in terms of the eps if you look at where they were six months ago i would just say that industrials priced in where they are now a lot earlier and i think there's still a lot of pain for the economy we have right now. that's an economy where the u.s. is growing 2.5% and we know the rest of the world is slowdown substantially. journal probably flat to 1% and we don't know where china. is but industrials have that in them now if that changes, very different story. >> do you agree? >> i think boeing on wednesday again before the bell along with mcdonald's will be fascinating i think boeing will be fine. it's a much different story. a cash flow story, valuation is not ridiculous given their eps

growth rate so i think boeing will be fine but i think boeing is boeing specific so i wouldn't say -- if boeing beats i wouldn't take that as a tell for the rest of the space. what should you buy amid the busy earnings season carter worth is looking at heroes and zeros and you have a record number of charts to share with us. >> let's go quickly then first the s&p. everyone know this is chart but sometimes the most obvious things are the things to stare at we know the peak was exactly 2940.91 on september 21. we have a three-month decline. we ended on christmas eve at 232 2346.58. we've had a perfect recovery of exactly 50% of the declining move you could call it a retracement, call it fibonacci, but the point is we've climbed back exactly one half of the proceeding move. there it is. that's the 50% level it's been here for a week and it's been stuck. the bull says can you believe this

we've climbed back 50% the bear says can you believe this we've already climbed back 50% so quickly it's too steep, it's impetuous, not sustainable i'm in the latter camp i think it struggles and fails and we test those lows in terms of a few big stocks, i want to look at what will be the two most steady s&p stocks, meaning apple is big but it's got idiosyncratic issues these two stocks are trading in unison and have nothing to do with one another these in microsoft, twoyear chart, almost 100% correlation five year chart, exactly the same thing they're being treated the same their r. o.es are different but this is the behavior of money. these two stocks will tell us whether the market is going higher or lower. it drops 19% and rallies 14%, microsoft. look at visa, virtually identical, droppes 20%, rallies 14 each stock is up against its declining 150 day average. in principle, that's not a good position to be in.

more often than not it's the beginning of a top look at visa the same circumstance. my bet is both of these are headed lower microsoft is the number one contributor to the down move in the s&p today. it's always something to do but first forget the charts. look at the fundamentals there are 40 analysts covering both companies and the 12-month price target, their 12 month projected return is identical. are they doing work or saying these are great companies and this is what they should grow? the point is if the behavior of money, they're in unison, they're identical. now a stock is okay. boeing, guy was just talking about it, i think you can draw the lines this way if you would like a lot of consolidation but what's important about this setup is now if i change to relative as it's been consolidating and doing this, what it's been doing here is it's broken out and already made new highs relative to the s&p.

that's an important circumstance stock acts well, i like boeing long for earnings, microsoft and visa the other side, sell. >> come on over, carter. [ applause ] >> welcome, carter. >> that trap was set for you. >> when you had the boeing chart -- are you going to eat that it's quite large the size of the gummi is large. >> do remember what happened last time? >> i do not want this to happen but here it is. >> the boeing chart, when you drew the consolidation, the lines, it looked like it could go down. that's limited upside. >> if you have a great run-up and the stock consolidates for two or three years, you can look at it as multiple contraction, the stock breaks out the bear would say it's topping out. i think this is setting up for something according to the upside. >> when you came up with microsoft and visa, did you

randomly search for which two big companies are the most tightly correlated how is it? >> just going a to z when i was in the vs, i said that looks like microsoft. then i stuck them together and said they are similar. they're being treated the same think. the r.o.e in visa is almost double that of microsoft the gross margins are different but yet they're considered very safe reliable businesses whereas other stocks have issues these stocks i think are very important. >> i share your pessimism in the s&p and i'm looking for it to break down you spoke about the fibonacci levels torre tracement level, that -- i believe there will be a retest and i believe it will fail how deep do you think the retest -- i don't want to put words in your mouth, are we going to retest? >> if you retest, that would be a triple bottom. do we test the lull? we have a lull

do we test it? i think we do. and good technique argues for buying at that low making the bet that it will hold and if and as it doesn't, have the dexterity to flip it around. >> carter, thank you. >> thanks, guys. >> enjoy your gummis. >> i'm taking them. >> nobody wants them after you touch them visa and microsoft, do you agree with carter? >> microsoft -- in visa no and microsoft no i happen to agree on bowing. i think microsoft is fine, they turned the ship around three or four years ago so visa, if you bet against visa, it's been difficult. with that said, carter's work is magnificent. one thing about caterpillar though -- >> pretty magnificent? >> magnificent. >> pretty magnificent doesn't make sense to me. >> magnificent. >> thank you. >> we can argue about the quarter, was it great, the quarter wasn't great, guidance

wasn't great but was it that bad that we saw it today maybe the market is telling us that a deal with china isn't as close has of us want to believe. maybe that's what this selloff was telling us. coming up, a storm of negative earnings sweeping through the market and one of wall street's biggest bears says it's about to get worse. he'll explain why he's given up on this 2019 rally plus, as the earnings warnings pile up, what do you do if you own one of the companies sounding the alarm don't worry. guy will break it down. and check out whirlpool, getting slammed down 7% after reporting moments ago. we'll give you wall street's first reaction to the numbers. live from times square, much more "ston" teth fa meyafr is minimums and fees. they seem to be the very foundation of your typical bank. capital one is anything but typical. that's why we designed capital one cafes. you can get savings and checking accounts with no fees or minimums. and one of america's best savings rates. to top it off, you can open one from anywhere in 5 minutes. this isn't a typical bank.

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the xfinity store is here. and it's simple, easy, awesome. welcome back to "fast money. we have a news alert out of washington eamon javers is at the white house with more. acting attorney general matthew whitaker in an unrelated news conference just a few moments ago told reporters the mueller investigation is close to being completed we don't know what he means by that and we don't know what format the end of the mueller investigation will take. but it's striking that somebody in the administration, including theacting attorney general would suggest that it's getting close to completion. that's the first time we've been give than kind of high level guidance about where the mueller investigation is in its process. the end game is unclear. what we know is that mueller will write a private report for the attorney general and i don't know that it's not clear what

the attorney general will do with that report, much depends on what it is that robert mueller has found. but the acting attorney general now suggesting that mueller is close to finishing up his investigation, this on the monday after the friday arrest of roger stone, one of the president's long-time associates, his arrest and indictment for lies related to his interactions with wikileaks, the organization which, of course, put out those stolen dnc e-mails so some indication that we might be coming to the end but not clear where we go from here, melissa. >> to be clear, though, eamon, it's up to the acting attorney general as to whether or not he would release the report to the public >> that's long been the asummings that the acting attorney general or the attorney general if there is one in place would make that decision whether to release it to the public, whether to send it to congress for any congressional action that he might feel is required but we don't know knew will be handled and of course the possibility is that if mueller

indicts further officials for any other misconduct related to the 2016 election as he's been doing all along he can use what are called these speaking indictments, indictments that a have a lot of detail and narrative. we learned a lot in the roger stone indictments about what happened presumably mueller could put his words into the indictments of other figures who would be arrested or indicted but no indication that is coming we'll have to wait and see. >> i understand there's developments regarding michael cohen? >> we're told michael cohen is going to testify you remember the president's former attorney was scheduled to testify and then backed out of it and cited pressure from the president of the united states saying that that's why he was not going to testify on capitol hill now we're getting word michael cohen will testify at a closed hearing on february 8 at the house intelligence committee so we were expecting a big,

visible public testimony from michael cohen. now we're being told it will be on february 8 but it will be closed and so there will not be the opportunity for the public to learn about what happened with michael cohen and the president of the united states presumably congress being what it is some might leak but the house intelligence committee likes to keep a wrap on things >> eamon javers reporting live from the white house for us. how do you regard this >> i would think right off the bat you go with closure. if you can get any type of closure on some level, that would be good for the overall markets. we have sold down in the overall markets based on these negative headlines, these tape bombs they're called you've seen the markets sell off and without those the markets should move higher, specifically to this cates. >> do you think we've sold off on tape bombs? i have to say i don't think the market cares. >> day to day granular when you

sere these negative headlines come across the tape regarding trump and the mueller case the market has reacted to it. >> to me the market is and the trade issue and we don't know what will come out of this this is very high up, if the president is ensnared in this was where does that lead with us trad trade? i guess they go forward. >> if there is a sense there's jeopardy involved with whatever will happen with either the mueller report or closed testimony by michael cohen perhaps -- conspiracy theory, of course, talking but maybe a trade deal is more imminent. >> more likely to get done because they need the win. >> we think the market is more focused. this is a huge week. we have a fed statement, we know they won't go. >> the press conference, though. >> we've got the press conference, the chinese coming to the u.s. to talk on wednesday. we have a payroll number on friday, a ton of macro news that will be a real tell in the

global economy i don't think this is moving the needle sorry, i just don't. >> obviously in this investigation is coming to a close -- which i don't think any of us have any idea -- but what's in the investigation is to your point. i have no idea where the guilt lies with anybody but let's play it out -- >> look in the mirror, guy. >> that's fair let's play it forward quickly. maybe there's something there. does that force president trump to make a deal to your point. but if you're the chinese, why would you make a deal -- >> knowing there might be something there. interesting. >> that's how you have to game this. we have an earnings alert on whirlpool. the stock is down sharply after the earnings report moments ago. let's get to contessa brewer who's been following this. >> whirlpool lowered its guidance for full year earnings per share. it expects to generate between $800 million to $900 million in free cash flow this year

a primary focus is on cost inflation, dealing with steel, aluminum, plastics, resin and the like much of which has been affected by tariffs and other cost increases customers in north america have seen prices for laundry equipment rise and sales have softened still, whirlpool says it delivered strong earnings and growth of 5% in north america. in europe, the middle east and africa sales dropped 6.3%. the company has refocused efforts on technical innovations, launching internet-connected machines, improving ways to communicate with the machines, working to expand margins through improved efficiencies but there's a real concern that a slowing global economy is going to drive away any a tide for new appliances in the united states, those are two reasons cfra downgrade whirlpool from hold to strong sell with a price target of $105 whirlpool closed at $124.46,

dropping 6% after hours, down almost 7% in extended trading melissa. >> contessa brewer back at headquarters that was very well timed do you match this up with what we heard from sherwin-williams, stanley, black & decker? they say housing here is threatened you're in housing stocks. >> you don't have the global international exposure you have domestic so there f there's a slowdown that is priced in. you don't get that emerging market exposure the way you do with whirlpool a lot of the tariff game was what hit them with steel. >> it's interesting. they cited the dollar, first of all, which i don't think was a factor in the fourth quarter and i don't think it will be a factor in the first quarter but slower sales, that' emerging europe, middle east, africa, big story for these guys is latin america. this stock is down 45%, is near

six year lows and tells you about the cyclicality of where the global markets have been which is nowhere i think frankly slapping a short at these levels is not that brave and i wouldn't short the stock. more on earnings and what to expect, head over to tradingnation.cnbc.com i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide. here's what else is coming up on "fast. ♪ i went to the danger zone >> announcer: stocks are trapped in the danger zone during what could be the most important week for the market yet but one top strategist will explain why he sees a light at the end of the tunnel. >> i am seriously thinking of running for president. okay, not exactly. but as the former starbucks ceo considers jumping into the ring, the traders tell you the ceos esen think would make the best pridt. much more "fast money" right after this

♪ i went to the danger zone the s&p 500 stuck in the danger zone, trapped between 2600 and 2650 which is the range the market broke below despite the runoff, stocks might not be in the clear. bob pisani is at the nyse with more the, is and, 35 s&p 500 has time getting over 2650 and regaining the last 100 points to get us back to the early december highs three things have shown to be consistently moving markets and earnings perceptions the first is perceptions that the fed and other central banks are becoming more dovish not only will they not raise rates but they may return to stimulus mode if they have to. the second is hopes for a

positive trade outcome and finally slower global growth and today nvidia and caterpillar stent message that even with the declines in december earnings estimates the numbers for 2019 are still too high more than 40% of earnings in the s&p 500 occur outside of the united states. it's when both of the companies talk about slower global growth it's a big issue, particularly for industrials and technology but how much slower is global growth that is hard to figure out earnings estimates have come down from 8% at the start of october to below 2% today. the battleground is between those who believe earns will stay low but positive for the full year and those who believe an earnings recession is likely. that is two consecutive quarters of negative earnings growth. one positive development, even as most sectors grouped, banks opened weak and quickly rallied. j.p. morgan, bank of america,

region regionals were ending in the green today. the bank etf, the kbe, rallied as other sectors moved sideways. the biggest sector gainer for the month, kbe up 15% sitting at its highest level since december so melissa maybe rotation going on into the banks and maybe out of industrials. >> thanks bob. our next guest is wall street's biggest bear. he says get used to life in the danger zone. let's welcome back chris harvey, wells fargo securities head of equity strategy. great to have you back one of the most salient points bob made is the fact that even if you don't extrapolate caterpillar and nvidia, the earnings report and the guidance just underscores this notion that perhaps estimates are too high across the board. >> i agree i think estimates are too high

we expect mid-single digits returns for the, is and, 3500. we're on the lower end we want to see companies lowering guidance. we want to see for the first time in a while we're seeing value in a lot of value stocks karen, you're probably like a kid in the candy store because value companies are looking interesting to us and companies with bad guidance that are reacting to the market we think as we move forward you can step over it. it's a walk not run type situation. lower the guidance, have the market react and then we think you can get involved in those things >> how do you view what a good buying opportunity entry point be in this market? are you looking at pe? level? >> we're looking at pes, is the company buying back stock, foreign multiples, book value, a myriad of issues but we want to see where sent system horrific we want to see the company lower

guidance then we think with that bad news you can make money going forward because for two reasons, one, again, you're either going to step over lowered guidance as we move forward and if things get worse you've beaten the rush so on a relative basis you'll look better than other companies. >> so looking at things that have gotten beaten up that lowered guidance, stocks got killed like fedex or others in the space, is that an area where you want to be in? >> what we did last week is added to the industrials, added to the tobacco names and that's where we're finding value. we've been up in quality and down in risk but slowly but surely we're adding value and adding some risk to the portfolio. we want to do it again after the news is out and we think that's a good risk/reward. >> how do you factor in a deal with china on the trade front. >> that is great a lot of these beaten up stocks will react

if you get any positive news out of china, the economics won't move but stocks will so you're sitting on a situation where that you have and that's not baked into its. >> in terms of adding to industrials in other sectors, what are you lightening up on? >> we've been taking away from -- in industrial wes haven't liked transportation but we have like gapped goods.s we haven't liked transportation but we have like gapped goods. and when you look at technology spaces, we've liked software, we haven't liked semis, now we're seeing more value in semis but we're starting to line that up so we're doing intraindustry trades and doing a lot of one off type trades because some of these situations are idiosyncratic and so we think it's more of a stock picker's market this year than last year. >> is this the most active you've been in this model portfolio? it sounds like a constant -- >> we're starting to work. we had nine buys, three sells, we were active this year and

we're seeing the opportunitys rotate it would have years of value underperforming. you had a horrific fourth quarter. we've been saying value companies have been a proxy for risk now you're seeing value as an opportunity. you have to read ttread lightly want expectations to come down but that's where the value is. >> chris, good to see you. >> good see you, too. >> chris harvey. tim, you're a value investor, where do you go? >> i think guy's ego is writing checks his body can't cash, just fyi. i think value in the industrial base is, i said this over the last two weeks, two months, possibly six months is more than flagged and the global environment where we have flagged negative pmis around the world. so so is theed if on hold and can we experience this late cycle stuff? i feel very comfortable with fedex and other names trading because they're giving us fresh numbers. >> it's counterintuitive to me

that if we get this deal done with china we thought it would be a positive but by its nature thest wants to take something for from china that's the whole idea of the trade deal so at the end of the trade deal it has to be a negative for china so counterintuitively i think you'll see china growth impeded once we get the deal one. >> let me push back on that. one of the things weighing most hefly is the uncertainty of the china deal even if it's punishing to china and causes pain there which would cause pain here, taking away that uncertainty i think would be such a big positive to the markets. >> no question. still ahead, nvidia the latest company shocking the street with a dire earnings warning. but if you're caught in the trade, relax, guy will give you his guide to bad guidance. plus former starbucks ceo

howard schultz announcing he is seriously considering a run for president in 2020. is ceo-to-candidate the new norm if so, who do traders think wuld fit the ticket theyill reveal their top votes when "fast money" returns. ok. gonnak only ok? no worries boss, i'm one of the tattoo artists in the city. you mean one of the best tattoo artists in the city, right? something like that. yeah. uh, aren't you supposed to draw it first? stay in your lane, bro. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network, according to america's biggest test. now with 5g e. more for your thing. that's our thing. i that's the retirement plan.e, with my annuity, i know there is a guarantee. 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. his family. his steinway, which met a burst pipe.

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welcome back to "fast money. stormer starbucks ceo howard schultz the first big business heavyweight to consider jumping into the 2020 elections so we have a new segment we're calling the fast take where the traders weigh in on some of the biggest

news of the day so let's listen to what schultz said about his potential presidential run last night on cbs' "60 minutes." >> i am seriously thinking of running for president. i will run as a centrist independent outside of the two party system we're living at a most fragile time not only the fact that this president is not qualified to be the president but the fact that both parties are consistently not doing what's necessary on behalf of the american people and are engaged everyday in revenge politics. >> so should howard schultz go from the starbucks corners off to the white house oval office the reaction is interesting because there seems to be backlash on both sides of the aisle. >> well my backlash is the independentness of it.

that's terrible of it. that's just a terrible dynamic that can potentially be counterproductive. i think he is a democrat, he needs to run as a democrat otherwise if he really doesn't want trump to be president, i think this could enable him to become president. >> it's terrible if you want a democrat to win, it's fantastic if you want president trump to be reelected and if you look at president trump's tweet today basically daring howard schultes to get in, he's baiting them to come in. not smart enough, doesn't have the guts it would be a fwindfall for president trump if mr. schultz ran as an independent. >> should by concerned there could be boycotts from both republicans and democrats and shouldly be worried that perhaps howard schultes would sell his stock during this presidential run. >> i'd be very concerned about a sense the company would do

things that are politically correct or politically expedient at the expense of earnings, starbucks had plenty of opportunities to digest this posture for the last two years this is no surprise to anybody that howard schultz is doing this so as a starbucks shareholder who remains long through what has been a good run, i'm not worried. >> i don't think it will be political, i just think it's a backlash against their customers. i'm more to worried about him selling his stock. >> two separate questions in terms of -- >> i don't think boycotts will do damage. rarely to boycotts get that long in the tooth and have a really resounding effect on the stocks so i don't think that is the major issue. karen has the biggest issue. you want him to run as a democrat. >> who would be the best ceo to run for president? we wanted to ask the traders, each have their own picks, guy, what is yours? >> we talk about the company all the time, lockheed martin, but marilyn houston tlab since has e

since 1983, she's been ceo of the company for the last six years. if anybody understood government in that capacity it would be somebody in the aerospace defense industry look what she's done for that company. look at the deals she's done and look at her background i think she'd be a perfect choice for president of the united states. >> i like mary barra the way she's handled gm that's arguably boy's club, she's been in the middle of one of the most important industries in the world, she's well educated, she knows how to run a big business she knows how to operate in a regulatory environment she's had to make you have toug decisions. >> i love both of those two picks. mine would be jamie dimon, not just because i love jamie dimon but i think he's a proven leader in the depths of the worst crisis we've seen. he was so far above everyone

else and he could work together -- when he does his annual letter, he lays out a lot besides banking and the economy. it's about what does america need to move forward and how do we get that to happen. i think stigma of being a bank ceo is -- there is still something to that. i believe he's a democrat, would run as a democrat, i think he would be great and him saying i won't do it but you never know. >> general dynamics, phoebe novakovic. she's steeped in experience, i don't think she likes the limelight but she would make an excellent president. >> don't miss howard schultz on "squawk box" tomorrow at 6:00 a.m. eastern on cnbc coming up, apple down more than 30% from its recent highs

as it gears up for earnings tomorrow but after the company's iphone warning this month, at least one trader thinks the worst is behind it we have the details. speaking of earnings shockers, as more companies spook the street, guy has three ways to weather the wainrngs, he will break them down. >> maverick. for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain.

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you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. welcome back to "fast money," take a look at shares of apple in freefall since the october highs after a series of disappointing iphone sales

numbers and a gloomy revenue forecast to kick off 2019. the tech giant reports tomorrow after the bell and some traders think the worst could be behind it mike is in san francisco with options action, hey, mike. >> hi there, apple typically moves a little over 4% on earnings, or at least that's been the average over the course of the last eight quarters that's pretty much what the options market is implying now, about 4.5% and bullish bets outpaced bearish ones by 20% so modest optimism going into earnings and where we saw the opening activity was in the february 1 weekly 157.5 calls. those expire this coming friday. they were spending about three bucks for those so those are bullish bets that it will be above 160.5 by the end of the week they started trading when the stock was lower and closing on its highs although it was lower overall. so that represents a boost 306% from today's closing price. >> who would agree with this particular options trade that the worst is behind snaem. >> the setup works for apple.ape

. >> the setup works for apple so i would think that should bounce in theory with the first in, they should be the first out. >> underperformed the s&p by 600 basis points and 10% since the lows it would be -- just speak to obvious. if these guys have another guide for us, it will be a disaster. the risk to this announcement has never been greater in my view. >> thank you mike for this that options action apple is far from the only company to sound an alarm. look at the names of lower guidance, ford, fedex, macy's, constellation and american airlines but don't worry guy adami is about to tell you

how you should make a weather warning. >> next time i'm going to play that live on stage here at cnbc's "fast money" at the nasdaq guy's guide to bad guidance. number one, percentage off the 52 week high or low. what does that mean? so how that has stock been trading? are they warning as it makes a new 52 week high or is it warning as it made a 52-week low. maybe if we've seen a trough that warning puts in a short term bottom. maybe there's more room to fall. we've seen that a number of times number two, past warnings outcomes how often has this company done this are they prone to give negative preannouncements or this the first time i'd go back and look at the companies you're interested in to find out and the last one is it is a trade or an investment

why do i mention that? if it is a trade the first thing to do with the bad position is take some off whereas in investment maybe it's giving you an opportunity to buy more at lower prices but you're either a trader or an invest investor and i think i have an example if the crack staff can put this up. if you go back to october 8 and you saw ppg pre-announce and the sk stock tracratered to this level that pre-announcement gave you a good entry point on the long side and you saw the subsequent bounce now we have seen the stock trade back down but for a trade that was a great opportunity so that is what i'm talking about in terms of trade and investment and in terms of where the stock is in term of 52-week high and

low. >> guy, when you say it could be a good setup or bad depending on whether it is declining or ascending, how do you know when you cut bait and say this is the second time. because you use ppg as an example. that was october 8 what do you do with it now when it's repeative the >> i think that's a great point. hopefully this doesn't come off as glib. trust your instinct. if your instinct says get out, get out. we get ourselves in trouble in life when we fight against our instincts and in every facet, especially trading. >> thanks for that, guy. still ahead, pg&e up 70% in the last week and conflicting reports the company is considering bankruptcy but if you're thinking about buying the stock, you might want to listen to what the chairwoman has to say first we're live at the nasdaq in times square much more "fast money" right after this see that's funny, i thought you traded options. i'm not really a wall street guy.

what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade what do advisors look for don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. ♪ ♪

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over 70% from their 52 week highs, karen is issuing her own buyer beware on the sock so why is it a no-touch >> it's complicated. this is a potential bankruptcy that unlike a normal bankruptcy like a toys "r" us where there's too much debt where you can make a reasonable guess about what the business would be worth without that debt, you have no idea here. nobody has any idea what it's worth. just because they said they weren't liable for fire -- wildfires two years ago doesn't mean there isn't a huge liability still out there and it's a very uncertain size so that's one. you read the headlines and oh, this is interesting, elliott and citadel, they're going in ahead of the equity, if you're the equity they're going to probably be smarter probably certainly they're going to be smarter than i the third thing is, when you look at the capital market, they're always ahead of the equity markets, they always understand better so let's look at very near maturity 2020 debt.

this is a utility, we should have that chart. now look it's in the 80s this is telling you be very afraid don't touch. up next, final trades.

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tim? >> never leave your wing man, alibaba. i was waiting for picture. >> karen >> fedex. >> steve >> ge, staying long. >> altria, ahead of earnings. thanks for watching, "mad money" with jim cramer starts right now. here at 5:00. "mad money" with jim cramer starts 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 cramer america. i'm just trying to make you some money. my job is not just to entertain, but educate, teach you call me at 1-800-743-cnbc or tweet me did you know i used to be a decent bowler? enough that you'd want me on your team.