follow-through >> if the china deal is -- as everyone is saying as it's starting to, what is the next catalyst the jobs report on friday. we'll see. >> yep. >> that does it for the show today. thanks very much for watching. >> "fast money" begins right now. >> "fast money" starts right now live from the nasdaq market side i'm melissa lee. thank you for joining our guests tonight, the market selling off today. top strategist says don't stop buying stocks. he'll explain why he thinks the bull run still has legs. plus, f-a-a-n-g bites back they're holding up to day in the carnage. wall street is betting this trade has a lot of fight left in it we have details. first, we start off with the market selloff the dow down 400 points the lows of the sessions. worst session of the year despite the u.s. and china inch is cloeger ser to a deal. s&p 500 up 11%, surging back from december lows

failing at the key 2800 level since the market high. so this is one of the few selloffs we've seen this year. should you be buying this dip? is there more pain ahead >> give the bear some food to say this is a worrisome day for me is an understatement. you say maybe this is all we got. look at volatility we had the biggest move intraday su since january 4th. peck look at the construction spending number that was out this morning on a week when he got, look, we have a ton of macro out this week. we have the ecb on thursday. we have the policy meeting we have normalization. i know we got everything we can out of the fed i think markets are worried about growth i think that's what today is it's monday. i'm not losing any sleep right now. >> does this give us any sort of belief that trade is either going to be an outside catalyst or a sell the news event >> i think today, i told you,

sell the news event. it doesn't mean that we have to goul the w go all the way down to the lows. s&p 500 up 11.5% year today. we've seen economic data declining a bit coming in. surprises by the economic surprise index that is negative that means the surprises are to the down side. the market got ahead of itself a bit. we priced in trade and the fed not raising rates anymore this week it's time to take a break. it tail a little time. we had two months of a rally it's probably going to take a month or so. and today's action down to feed the bears. >> the trend is upwards. >> medium voters error >> yeah. i mean, i think what brian said, i think a lot is priced in i thought we came back off the lows that was a pretty big rally off the lows i think, you know, i'm long. i think we'll get a trade deal i don't know if you saw my performance on "the closing bell." >> stellar

>> the market is pricing in, you know, buy the rumor, sell the news its not selling in this deal and they keep saying we're on track. we're more on track. we're even more on track it wouldn't be surprising to see how the trump administration negotiates if we did see a hiccup in this deal. the market will be lower than it is now >> a hiccup or something that a sign at mara largo at the end of march. >> a trade deal is priced in the question is it going to be a good deal or just an okay deal and, you know, frankly, it's okay for the market to take the breather this has been a v shape recovery a very, very fast recovery over the course of the last two months yeah, we're up 11.5% year to date but we're also up 20% off the christmas eve lows and when we look at the different indicators that we watch, nothing is signalling to us that there is a recession until at least the second half of 2020, maybe even 2021 as long as the fed stays on pause.

so, you know, we think the market definitely has plenty of upside from here >> the quandary for a lot of investors is no recession doesn't mean equity performance. >> right >> very difficult year no recession >> it does if you want to look at where the s&p 500 is going into the highs that we hit in september before the market really started to get concerned about the trade deal, it was happening with at least slower spending. slower capex some expectation the world is slowing down equities is moving higher. i think we have entirely recalibrated the expectations on the earnings growth. i don't think people are expecting earnings growth near the 7% we started the year i think that's bullish for the market but more importantly, i think this is where you go after sectors right no you that have continued to defy either what people think are fundamentals or defy gravity in the case of energy, you keep buying it. look at the numbers you had out of opec. opec first of all, those are 4 1/2 year lows in terms of opec production i think it is the most shorted sector out

there it's not something that necessarily you hang your hat or the market on. there are places to invest i think the industrials continue to get a reprieve. i would be buying europe which is massively underperformed. >> tim brings up energy. the dip you want to buy is when oil goes higher, people start worrying about wait a second, the fed has to come back n we've got inflation. energy prices are rising and maybe the economic news isn't that good. and the trade deal is not as good as we thought that's the dip you want to buy not this particular dip. the reason why is all those things will ultimately get fixed. the fed will be on the sidelines. the trade deal, we'll get something done there opec, it's fine to have high oil prices they price the customers out of the market and they'll lay off i agree. i think you can buy energy here. nothing else until you get that real negative dip. >> you are buying right here anything >> s&p puts, that is the only thing. i like what i own. i think there is some risk if we don't see a deal but i do think we'll see a deal.

the other thing is even if we see inflation, i don't think the fid fed is going to do anything. they talk about being patient as poe posed to data dependent. patient is we won't react to the data i'm not afraid of inflation. >> right >> so i like a lot of the software companies that pulled back so we saw salesforce ahead of earnings pull back these software companies in particular, they really help businesses to become more efficient and more profitable. and at this stage of the game, you know, late cycle, that's what businesses want to do they want to be more efficient and more profitable in these software companies, most of them are generating reoccurring rev knees. there's no revenue better than a reoccurring revenue. >> you are concerned about the guidance >> yeah, but guidance is low across the board you look at just about every single company in the s&p 500 and, i mean, all of guidance has been pretty conservative this quarter. >> are you worried that the higher multiple stocks like software companies been the ones that are the target of the

market that has been comfortable buying value, frankly? i think that to me is the safer spot. >> yeah. so i mean the multiples are high right? so not all companies are valued the same it's not always about a pe multiple as an example there are specific value drivers that can help a company to command a premium multiple whether it is reoccurring revenues or stickiness of t customers. >> let me push back. one of the metrics is growth and accelerating growth or not flat growth or declining growth >> right >> and so sales force, which is a great number and the guidance is really good also. but if you don't see an acceleration of growth, it seems to be priced for that. and, you know, as we get into -- >> let me push back on that. when we look at companies in general when a recession hits us, a lot of those companies are going to watch the revenues fall in my opinion, sales force, mine, that's going to be one of the last expenses a business is

going to cut it helps them to run the engine of the business. it helps them to be efficient. it helps them to be more profitable so i think there's an element there that really helps them to get that higher valuation because their revenues are essentially my opinion close to being recessionproof >> how much do you want sold to you? i think these are going to get killed if you have -- i'm calling it an inflation scale. i want to be careful saying there is not massive inflation we get oil going higher. you get a fed that is worried about inflation. a market worried about inflation. high multiple stocks we'll get killed in that environment. >> all right let's move on. our next guest says don't fear the selloff. keep buying stocks let's bring in tony dwyer. welcome to you we were showing the chart of the s&p 500 and the trouble it's had around 2800. why you are so confident that it's time to buy stocks, to keep buying stocks? >> i also agree that there is a possibility that you could have a blifltlittle bit of a pullback

when you have the kind of thrust that we had, about two weeks ago you registered 92% of stocks in the s&p 500 above the 50-day moving average it sounds technical and it is. but when that happened in the past, you always had gain over the next six to 12 months with main mum of 9% at some point between 6 and 12 months. but that i don't think is the biggest point. i think the biggest spoint what is t point is what is the pullback after that happened? you had a hell of a run. what is the initial -- oh, my goodness it's a median 1% drop. even the two bigger ones in 2010 and 2013 up 7% and 4% came back within the next two months and made money so it's not going to go straight up you want to know -- like on the last show when i came back to the set, you want to know that the pullback can be minimal so can you actually buy interstead of fear it >> so the risk/reward is there given the average performance

when you have this breadth up versus the median down side. >> that's right. let's throw a little fundamental stuff in it soo. the biggest fear i hear from investors is well, earnings estimates are am coming down and the economy is slowing how can the market go up or are you pay more for the market when you have such decelerating earnings growth? you started in the year on january 1st of 2016 with s&p 500 operating profit expectations of 7.6% by the end of the year, 0.6% and obviously the market went up and then went up 20% the year after. that i think we have to be careful to be, you know, people get negative because the economy is too hot and the fed is tight. then they get negative because the economy is too soft and earnings are coming down it's all about the feds. >> you like sectors, financials, industrials, information technology we were having a debate on the desk i think people are having this debate every day growth versus value. you can find growth and value in each of these sectors basically. >> that's right. >> so what is your tilt?

is it obviously growth >> it's offense versus defense i think we play offense. and i think you could have a trade and upside trade and some of the materials and energy names to timmy's point earlier here's why if you look at any purchasing manager index globally, they're a disaster they're all coming down. however, if you look at the data, they're getting a bounce and reflecting off the low it's the opposite of what happened in november 2017. you were on a huge peak. that is the time to be a seller. the reverse is happening here. >> korea, taiwan, pmi last year, 3 1/2 year lows. i talked about a massive week for macro. to your credit, you're a guy that comes on the show and very consistent i love that. what would change that

>> if you get a sign the fed is going to be super hawkish. what scared me in october and we did a show on the correction early in october >> there is no sign. the fed is not going to come out and be super hawkish >> correct i've been horrifically wrong three times with three declines over 15% they're very temporary because the fed is okay. because credit is okay the barclay's total return index is at a record high. it changed that fast you get a slight resteepening and bofrpgs aanks are relending >> if the ecb gave any indication that they're getting tighter versus easier with the pmis, you would wonder if it's 2011 again they were on -- >> seriously >> seriously i think really the only thing

that investors have to worry about from a time perspective that i'm involved with is if you get what you got he end of september and early october. a fed policy mistake and a communications error on the back of it. >> right tony, good to see you. >> great >> have a safe trip. >> thank you very much >> tony dwyer. >> i'm with tony fed driven market which we've had for the last ten years, you have to be long and bullish until they decide that they're going to be hawkish. and so, you know, what we saw is a massive reversal in the fed. i do think they're in the midst of a policy change, trying to describe how they're going to change that policy and that could create some scare. it could create some concern they haven't done a great job communicating yet. but short of that, until they actually have to raise rates, until we get some reason for them to really have to go on a rate tightening cycle, i think you buy the really scary dips. >> amazing that president trump is criticizing jerome powell

even after this pivot. you are going to go after the guy now? >> it's all about being patient. >> right >> it's patient, patient, patient. >> it's like orange juice. >> yeah. trades that i think continue to work, we talked about energy china over the weekend said they're going to have a $90 billion tax cut. i think the rest of the world, you're seeing some basing. i think we have a lot of data out this week as i talked about. i think the em trade continues to work. the energy trade continues to work the ag commodities work continues to trade if we get a little inflation, that's good. >> health care under attack. worst performing sector today. regulation to the upcoming election hits the stocks is this sector becoming a no touch? plus, check out shares of salesforce reporting earnings moments ago we'll tell what you the ceo just told jim cramer. and later, fannig bites back

we're live from times square in new york city. much more "fast money" right after this ♪ ♪ dear tech... let's talk. we have a pretty good relationship.

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a number of headlines rock the space. eli lily hit an all time high this morning a half price version of the most popular drug humalog that is down 1%. two senators sent a letter to eli lilly as they began an investigation into insulin prices and specifically they singled out it in the price increases there. also, dialysis providers in the spotlight today. the trump administration is looking to cut down on costs by turning away for more clinic based treatments for kidney disease patients to home dialysis in all this, washington debates a medicare for all plan. house democrats unveiled it last week despite the cost of the program undermining the initial popularity, it is weighing on a number of united care stocks so are all of these unknowns turning this secretarior, health care, into a no touch? >> yeah. it is for bk add in there that purdue is

going to file for bankrupt to protect themselves from the lawsuits that hit endo pharma today so from every single angle the stocks are getting hit it's very difficult for many pharmaceutical companies to raise prices given the political environment. and then adding on to that the only thing they can dpo o to gr is buy the more speculative companies. until the dust settles, no touch. >> this was a haven, a safe place last year. this year not so much. >> yes i would be sticking with the companies that have a more diverse revenue base like merk take merk as an example. 75% of the revenues are coming from classic biopharma 25% comes from vaccines and animal health. think have a great pipeline. they're number one in phase three right now. phase three trials

this is expanding right now. so i think you have to be selective. >> well, i think if you look he sector also, there is names like lily which is a monster. lily moved 75% off the lows back to last summer it's not as if the stocks haven't had a good run and in many cases relative to themselves trade expensive i think health care continued to be, you know, if it was 2016 like that market that tony is talking about, he's a good guest. >> he's literally gone >> yeah. >> but the point is that in 2016, we're in a place that outperformed i think can you pause. >> i'm afraid of the pharmacy benefits managers. i think that is just coming under such scrutiny. anything that's been that not transparent, right, is -- >> you can't go on the street and ask somebody what a pharmacy benefit manager is and say the guy that causes pritss to ces t

jacked up. >> that is a name like cvs that got the double whammy of amazon is going into stores that have beauty care and, you know, that's not good for cvs. express scripts merging with cigna. i don't want to own that business >> you're also in the hospital providers, right >> i'm in anthem i've been in anthem for a while. i have mixed feelings about it i think i sort of fall non love with it because it's worked. but that's a terrible, terrible -- it's a psa that's a terrible reason to own a company. >> don't fall in love. >> but you're still in it? >> i am. >> but you're warninging the company not to make that same mistake. >> it's like when someone has a drug problem, don't start taking drugs. you fall in love with a stock. >> head on over to etfedgecnbc.cetfedgecnb etfedgecnbc.com for more information. here's what else is coming up on

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. amazon on the rise following a big upgrade today. this is as the majority of the fang names remain strong let's kbo to bgo to bob pisani

>> thank you good to see you. amazon had another strong day. up more than 1% on heavy volume as evercore upped the price target to $1965. also helping to day, "wall street journal" report that the company was planning to open grocery stores that would be different from the whole foods brand. now amazon is now back above april until second place for the largest u.s. companies with a value of $832 billion. fa in. g stocks are having a great year led by netflix, up 31% huge move in january facebook up 27%. amazon up 13%. and apple and alphabet both up about 11%. but many strategists think there is even more upside. and that fang will continue to outperform the rest of the market now analysts have an average price target for facebook of $195 that's almost 19% higher than

the current price. $2122 for amazon that's about 26% higher than the current price. $400 for netflix that, is 14% above the current price and $1341 for alphabet that, is 17% above its current price. these estimates are well above the average analyst price target of about 3,000 for the s&p 500 in 2019. that's only 7% above the current price. you seat fang stocks way above the market average so why all this bullishness for fang growth is still very tough to come by on a global level. the one thing most of the fang stocks have is growth. when growth is very hard to come by, investors will pay up for growth even if the prices drive companies into bizarre valuation levels like the 60 times forward earnings multiple for amazon or even worse, 87 times 2019 earnings multiples for netflix back to you, melissa >> all right, bob. thank you. bob pisani he is mentioning the high

multiple stocks. you're in two stocks that could be argued are value stocks in f-a-a-n-g. >> facebook and alphabet right. facebook as we know has had the idiosyncratic, not totally just to them actually, but i think it's still attractive. it's at a very nice bounce from the bottom i think alphabet is more traf . attractive i don't know why it hasn't gotten more of a lift from lyft and all the focus on autonomous driving and the rest of the business is fantastic. it's an extraordinary cash flow generator. my only beef with them is the lack of any significant buyback. >> what happens when the market is up? you were just scorching high multiple stocks. >> i was but without growth that's why i want amazon google is interesting. they have multiple levers to pull >> yeah. >> levers, that's what the

british say. amazon is the play here. i understand they're high multiple nobody carried about amazon's pe for a couple years a couple incidents we get worried about it they have levers they can pull as well. >> i'm saying amazon as well unlike with salesforce, i'm saying amazon. we talk multiples, of the four f-a-a-n-g stocked, they have the lowest proo is to sales. part i'm most interested in is the cloud. now it's only 11% of revenues. its growing at 50% per year. we expect the cloud usage is going to double over the course of the next two to three years there's more and more data in fact, 90% of the world's data has actually come from the last two years. so that's how high growth this industry is. i love amazon here >> by the way, if we're getting psyched on f-a-a-n-g, you know, everyone at the start of the show should have been pounding the table on the market. if this is all happening without the participation of f-a-a-n-g

outside of facebook -- >> and maga. bottom line is people should be lofrg this let me pound the table with karen on google. this is the best combination of valuation. the top line growth is still absolutely fine. youtube is growing i think it definitely mitt gates the margin pressure. i think this is a stock with more levers to pull than any one else. >> for more on the markets and best way to play the f-a-a-n-g space, go off the charts let's go to the plasma what are you looking at? >> well, let's start with the market here. down tick today. i wouldn't read too much into it now what is interesting about the move in the s&p 500, around important resistance level at 2815 that is the november peak. we think the emphasis should be on the big picture recovery that is taking place because of the very strong internal breadth readings that we're seeing for instance, the percentage stocks on the nyse above their

ten week moving average, that's about a 50-day moving average. recently topped above 85% for the if i ever time since march of 2016. and i think can you see similar behavior as we saw in that 2016 period after the strong run off the low, the market moved side ways for a few weeks to a few months ahead of that strong uptrend i think that's what's at play. history would support that as well let's look at the forward returns based on that indicator. six months out on the s&p 500. first off, for any six month period, the average gain is 6% excuse me, 4%. that's the horizontal line right here now it is good to buy oversold when you buy and there is very few stocks below the 50-day moving average you tend to have above average returns. look at this returns are even stronger six months out when you're buying very strong overbought raidings.

you get to that 85% level. so history going back to 1967 would suggest that the breadth readings we're seeing historically followed by above average returns and the upcycle. i like tim's point here. not only are we seeing the strength, we're seeing it without some of the biggest stocks in the market for us, amazon and apple as well really having participated here's the amazon chart. more or less underperformed over the last five months now we're starting to see this decline become less bad. it's building a base it reversed the down trend more recently it moved above the 100-day moving average as long as you're above 1600, you still have completed the space. i think you get it above 1770. amazon after that big run final a tactical play again. it was also asked to chart netflix. here's one that is a little bit

more extended off the 100-day average. but nonetheless, has reversed its down trend and has made higher highs we like it for the long term we think the high growth companies do indeed lead the market higher in this low growth world. i think net plichl becomflix bes attractive. >> so f-a-a-n-g is in a good spot how about the other half of f-a-a-n-g and if they continue to stall then throw in, you know, parts of dan's mega trade. really the aga of the maga he did create that acronym in particular but if we see the -- if we see the stall of these stocks outside of the two that you highlighted are in good spots chart wise, can we see the markets go higher? >> it's more than just these two. i heard karen's fundamental pitch on alphabet. the charts are aligned 1150 a graekout thebreakout there facebook is the one i'm a little bit, i think needs more work to

be done. i think it's in the process of basing but for the most part, it is f-a-a-n-g. it's the entire market very strong breadth in the market >> all right thank you, ari who likes what ari is selling here >> i like that he agreed with me that part. i think we all agree >> he threw us all a bone which is smart >> on netflix this is a company that hit their all time highs in june of 2018 you hear me talk negatively about netflix. you know, i've been wrong. the stock a long time. i tell what you, i think the valuation at some point, people started to understand there is only so much growth you can price in there of all of them, that's the chart -- again, underperforming the s&p 500 by 15% since last year >> facebook concerns me. it looks cheap my issue is they really diluted the advertising platform they got rid of demographics

it makes it more and more difficult for businesses to get to the right consumer. >> growth doesn't -- the growth doesn't substantiate what you're saying that was a massive quarter >> yes >> it's to come. you think it's not priced in enough >> no, i -- so from digital advertising standpoint, i like google much, much more better than facebook. >> i agree with that >> yeah. >> the one thing i say is the market can go side ways to down. we have seen that. we have seen that. he pointed out we had this side ways action here yet the market has rips. i think can you see rotation we've seen multiple rotations. you see rotations out of the stocks like the materials, health care that we saw today. those type of things getting out of that and maybe getting into the higher growth areas, you've seen the s&p 500 go side ways to down and these stocks go up >> all right still ahead, check out shares of salesforce they're sirpginking after repor earnings today

we'll bring you the comments from jim cramer. and car trouble as monthly auto payments hit record highs. interest rates on car loanare s soaring. this is the beginning of the auto apocalypse? we'll explain. (vo) we're carvana, the company who invented car vending machines and buying a car 100% online. now we've created a brand new way for you to sell your car. whether it's a few years old or dinosaur old, we want to buy your car. so go to carvana and enter your license plate, answer a few questions, and our techno-wizardry calculates your car's value and gives you a real offer in seconds.

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welcome back we have an earnings alert on salesforce the stock is lower let's get the details. >> hi. shares are sliding on a weaker than expected earnings and revenue forecast salesforce guided for revenue of 3. $3.67 billion. the company's q 1 eps forecast was 61 cents much the street's estimates, 63 cents. saelsforce full year guidance was in line with expectations. in an exclusive interview with "mad money," the ceo told jim cramer his outlook remains sunny. >> here we are coming up on the year that we're going to do $16 billion in revenue that far exceeds my expectation. i still have never been more excited about sales force than i am right now and when i look at the short term, you know, i see $20 billion right around the corner. i see $30 billion right around the corner in fact, we initiated a four-year guidance today, jim,

of $26 billion to $28 billion. >> during the call, he also talked about the acquisition, something that analysts were looking for. he said the deal is creating value for customered like suntrust and un liefer adding that salesforce also hired an additional 450 new employees in fiscal year 2019 and nearly triple the architect's driving customers digital transformations. >> thank you so q-1 falls short full year, they're sticking by so they can make it up what do you think? >> look, i -- i'm not surprised to see this move everything you raend tead, peop very appreciative of this service and demand to full a lot of the underlying service that's they're unable to fulfill. a demand the product is strong it's a valuation story

it's a comp story. i think there is, you know, stock, you said this before, not you but i could have someone could have said i don't see this stock doing a lot in the short run. >> far from broken who are they winning at the expense of in your view >> i guess other pie expenses within a business. because the entire gist of sales force is just to increase the efficiency of a business i don't know if that is employees or what it might be. they're increasing by making data more accessible >> not been oracle or some sort of -- >> right they're without a doubt the leader in crm serviced >> the problem is the groenl of t growth of the growth it's the slowest year on year growth since 2010. wall street was expecting and going just hockey stick style. and you're up 16% year to date that's a stock that got ahead of itself if you get a correction, you're going to get a chance to bite

stock. it will be closer to a 140 level. >> are you in microsoft? >> i'm not in microsoft. i regret it terribly it's been an excellent place to be i look at something like sales force, what a great business they have. i just can't get comfortable with the metrics i certainly wouldn't short it. i can't get long >> of course, don't want to -- you don't want to miss jim cramer's full interview with the ceo at the top of the hour coming up, new cars breaking the bank for consumers with interest rates on loans soar to decade highs. we'll tell what you it means for the stocks retail reeling today and there is one name traders are betting could plunge even more we've gothe tat deils when "fast money" returns

welcome back an auto apocalypse could be on the horizon. car loans hit the highest level in a decade. phil lebeau has details. hey, phil. >> this shouldn't come as a huge surprise given what we've seen with all interest rates in a variety of areas take a look at the data in terms of what's happened over the last five years with auto str rates right now the last month, february it was 6.62%. compare that with last year and compare that with five years ago. there has been a dramatic

increase in auto loan interest rates. as a result, people are looking at ab you'll auto sales and they're saying, is it possible that we will not see a fifth straight year with auto sales topping $17 million? most on wall street, they have forecasted the rate to come in between 16.5% a and 16.8 millio vehicles let's look at the detroit three automakers over last year, these stocks really haven't done anything and gm, by the way, it's only getting benefit because of the collaboration or its subsidiary with cruise auto make. they're not getting much credit for the fact they plan to improve profrtability later this year and when you look at the auto dealer stocks, they are also suffering from the perception that we're at peak auto. and, therefore, people are not going to be buying as many new vehicles they totally discount the fact that these guys make the bulk of the profits either through

service or through the sale of used vehicles. by the way, when we're talking about used vehicles, even those stocks are under pressure. car max, carvana there is no love in the auto sector the general feeling is that you have to see these guys manage profitability during a recession. really general motors is only getting credit because of the s subsidiary and cruise. >> but in terms of why the rates are going higher, i mean for mortgages, for instance, we haven't seen a huge rise at all. interest rates are very, very contain contained is part of what is going with auto rates, are there other factors involved >> there's a couple things one of the big factors is that automakers and auto dealers used to offer a lot more zero percent financing two or three years ago than they offer now.

when you look at the averages, they're moving higher. that is a factor there >> got it. phil, thank you. phil lebeau joining us from chicago here you two are in auto stocks are you concerned? >> my concern, no. he says they're not getting a lot of love. that is certainly true we've been talking about peak aoos f a aautos for a while gm still is really running the business very, very profitbly. nobody seems to care trades are under six times earnings which is not a peak multiple for sure, right no lover but i'm sticking with it i think mary barr is going an outstanding job. >> look at the europeans and americans. gm has done nothing for five years and we've been hearing about peak auto for two or three. so to the extent that people might have been starting to price that into gm for a few years, broken record agree with karen

5.88 times freshly updated 2019 numbers will make $6.75 a share. north america is kicking it. china is fine. gm financial is going to make $400 million last quarter. europe is a mess but they're getting out of that business phil just talked about how can you navigate in a downward psych snl i think gm is giving you everything you need. >> where are you on the auto trade? >> as vehicles become less affordable, more people are going to opt to fix their own cars so we like the auto parts retailers. so you look at o'reilly, autozone, advance auto parts you've seen great earnings out of these companies lately. the s&p 500 was down 38% over the course of the time frame o'reilly is up 4% over that same pan. >> the problem with the big automakers, they can't get out of their own way that has to do with the fact that this is an industry that is also being disrupted we know that mobility is changing people are not buying the buying habits are very different than they were in the past. so i think it's not to say you

go and short gm and anything like that they're a great valuation it's just that what's the catalyst going forward in terms of the interest rates going higher, we did see a slight, slight uptick in junk yields over bonds when we had that stock market selloff with consumer credit all time highs at the margin, you're going to start to see some delinquents. i don't think there is anything to worry about with autos. i'm much more concerned about the fact that people don't want to buy three cars have them sitting in their garage anymore. >> target is begt a ral qui and they could unravel reports tomorrow we have all the details. we're live at the nasdaq in times square much more "fast money" still ahead. that there's a lobster in our hot tub? lobster: oh, you guys. there's a jet! oh...i needed this. no, i can't believe how easy it was to save hundreds of dollars on our car insurance with geico. we could have been doing this a long time ago. so, you guys staying at the hotel? yeah, we just got married. oh ho-ho! congratulations! thank you. yeah, i'm afraid of commitment...

and being boiled alive. oh, shoot. believe it. geico could save you 15% or more on car insurance. that guy's the worst.

take a look at shares of target some traders think the company could miss the mark when it reports earnings tomorrow. let's get out to mike with option action. >> yeah. so about half way through the day to day we had already seen about double the average daily options volume we saw three times the volume by the end of the day the high volume we saw on the call, some may take that as

bullish. a lot of the call were sold. one trade ways looking at that basically is taking a look at what options traders are looking about is a purchase of the weekly 07 puts we saw 1300 of those trading for $1.10. buyers are betting that target will fall below the $70 strike price. that means the 6% implied move is going to be to the down side. and it's understandable when you take a look at the last eight quarters of earnings for target. it has moved about 6%. they average a 4.5% to the soun side that explains the activity that we're seeing today >> you own the stock, karen. >> i do. i remember last quarter the stock traded off sharply and i thought it was very much overdone it's cheaper than that i think the valuation are attractive i think the big question is the evolution in the business with -- is the evolution of the business really going to hurt

margins enough >> yeah. >> and we've seen that time and time again >> and, you know, purely from training, it is at risk. on january 10th, they reaffirmed the guidance they said sales were good for the holiday season is that as good as it gets? a lot priced in. i think it's a smart move. >> so target doesn't excite me there is not enough growth in the company. i'd rather be in dollar general. this stage of the cycle, they're going to see an increase in store traffic right now. nair a lot of rural areas where there is not much competition. >> i think the entire space is not a place i want to be >> all of retail. >> no all of either broad line or -- >> again, target, walmart, even dollar general i mean, i think if we were -- we've been talking about the consumer to night. i think there's a lot of

headwinds. there is so much competition we're so overstored. aim done is competing every day because of that tril yn dollar consumable market that i think they really have the driver seat for. so i like target relative to walmart. but i really don't need to be in any of these names i'll be in best buy and home depot and lowe's >> is there concern about labor costs, mark, when it comes to dollar general which i assume has very,very thin margins at the price point it operates at >> absolutely. they're doing such such a good job managing the stores. when you looshg at them versus dollar tree, the amount of revenue they're getting is so much more significant. so, yes. i think, you know, industry wide it's an issue. >> walmart is one i would sell it got very extended the good news is out on that one. i think you get out of it. >> thanks for the action in san

francisco, mike. check outhfu sw t e llhoon friday 5:30 p.m. eastern time. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

tomorrow, closing bell will have three big airline executives on from southwest, delta and united all kicks off 3:00 p.m. right here on cnbc time now for the final trade let geese aren't horn. tim, what do you say >> great discussion on, you know, peak auto which i think is really again a question more of where is the consumer at but in terms of the autos that i think are the best position to execute and do have upside in terms of autonomous, i think gm has levers to pull as relates to capital allocation i don't think they're raising the dividend gm, i like it. >> mark? >> the good stuff forever the off price retailer, tj max. >> we talked about f-a-a-n-g and f-a-a-n-g with value it's my biggest position, alphabet it doesn't get the love it deserves, for sure so many great businesses hopefully with autos we get some of that unlocked but even without that, this is a superb business. >> levers. >> levers. >> so here's the thing, levers

is the metric term that's what people don't understand you say levers if you want leverage in the market, check out gearing, check out tlt. that ratio hit levels we have not seen until december. >> all right that 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 other people want to make friends, i'm just trying to not let you lose a lot of money here my job is not just to entertain, you, but educate you, so dia