boeing, keep in mind right now the company is on pace to deliver the fewest number of 737s since 2012. and obviously the longer the grounding goes the fewer deliveries they make, we could see that go back to even lower levels guys, back to you. >> phil lebeau, thank you very much for that. reminder, we ended the day down 1.5% on the dow, but we're out of time. that does it for "closing bell." >> "fast money" begins right now. live from the nasdaq marketsite overlooking new york city's times square, this is tms tms. i'm melissa lee. tim seymour, brian kelly, and dan nathan coming up you'll hear from one long-term bull who says he is now the most bearish he has been in a very long time. also ahead a pulse check on the consumer, the three events coming down the pike that will tell us if the u.s. consumer is alive and well plus a call on bitcoin one wall street firm says the crypto currency is about to break out. the magic number they are putting on bitcoin right now

but we begin with another tough day on wall street stocks hitting the skids as yields head south just adding to wall street's wall of worry wp goldman sachs, morgan stanley, ubs, bank of america all out with new notes raising the red flag on trade tensions hitting the market so what do we make of all this the sort of, i don't know, stuttering in the markets based on trade >> it's interesting that you're getting some of the macro folks around the street starting to become a little more concerned when in fact i do think that we've seen bond yields telling us something very dramatic 164 we closed on the 10-year dollar holding in. but i think the concern around the rest of the world truly that we're seeing major contraction, a couple of pmis we've had over the last couple of weeks we've got regional fed surveys this week we've got a cpi number in the states which i do think the fed will be closely watching to at least give them something to follow through behind in terms of inflation or lack thereof giving them more cover look, the bond market is concerning when you look at european banks trade down 8 1/2% over seven sessions and you can make an argument the real structural problems in the global economy exist in europe, not in china,

that's reason to be concerned. >> i think it's interesting. it was about a fortnight ago everyone was concerned about -- that's two weeks to you guys on the metric system. but it was two weeks ago we were worried about the federal reserve not cutting rates enough all of a sudden we've got bond yields at lows and everyone's concerned about a recession. i do think there's some justification to this concern about this global slowdown because it's continuing to go on to me what's going on in this market is people are pricing in a prolonged trade war that goes on past the election and that's going to drag on growth and it's going to drag on growth globally and then it's hitting the hot spots, europe being one of them. japan banks being another one of them certainly china. and then hong kong >> within that fortnight span, b.k. -- >> a lot of time or little time. >> 10% tariff tweet. you've got also some weak data out of europe. that all adds up to those mounting global concerns >> yeah. there's huge global concerns and quite frankly i was really

convinced we were going to have some sort of a trade deal done by the end of this year. i thought trump was slow-playing this thing, he wanted to get a couple rate cuts in before he signed off on any trade deal and the way i'm feeling right now is now china is in a position of strength they have the ability to slow-play this all the way through the election next year and we might not even get a trade deal at that point trade matters for manufacturing. manufacturing matters for profits. and profits matter for jobs and capex. so you know, it's all an issue right now. >> yeah. and i guess the big issue if you're watching this show because you care about the stock market is that the s&p 500 is basically flat year over year. last august it was trading at very similar levels. and we have a situation where we're seeing one step up and two steps and sometimes three steps back as far as what the ability is for the s&p 500 to make some real progress here we talked about last week some of these incremental new highs we've seen since january of 2018 the real problem i see is that every time you want to try to buy that breakout you get a

flush lower. we've had a 7%, 12%, 20% there's been great trading opportunities to buy those lows. but the longer this goes on and the longer these issues are existing as far as what we're seeing in other risk assets, most notably yields, the risks of buying those lows increase fairly dramatically. it's just that simple. >> i think you're right. the question is is there a headline out there that gets you to change that view, dan and we've been in a place where the trade headlines have been enough obviously the fed has been a major supporter. if you think what got us really to the highs after that june low was set june 3rd, it was really probably the fed but we have had enough headline support where the question ultimately is is the market now becoming completely inured to any of that and are we too late? and ceos didn't tell us in q2 earnings season that they were necessarily -- they were not pessimistic enough and that could be a concern. >> but we've seen this time and time again think back the last 20 years when we've seen this build-up in the late '90s into early 2000. i mean, the ceos were the last

ones to call it. in the build-up to the 2007, 2008 market top the fed were the last ones to call it the bank ceos were the last ones to call it that's not really their job. >> that's fair but in the meltdown that we saw at the end of last year we did have earnings season as sort of -- they did call it early remember we started getting those warnings early on and that sort of preceded -- >> hold on, we also had a government shutdown that was looming. listen, let me tell you what's going on in 2019 right now >> you do that >> the world is becoming a bit unhinged in all different facets when you think about it. look at what's going on in yields globally. we've never seen this in the history of the planet. look what's going on politically. okay in hong kong it's becoming a little dangerous. think about all the issues that we have related to climate change and stuff like that it's feeling a bit unhinged. i'm just saying. so the one thing that's not unhinged right now is the s&p 500 -- >> wow >> here's the thing. you're saying the one thing that's not unhinged is the s&p 500. so that to me is what makes it more dangerous we're not that far off the

highs. every other asset class out there, every other risk asset class is telling you that there is something wrong in the world, yet the s&p 500 is still lingering near its highs i actually think there's more to go on the down side here, whether there's global warming or you enjoy driving your suv. >> is there a little part in you, tim, that thinks that all these firms are finally throwing in the towel, raising the red flag and maybe that's a sign of the bottom >> sure. the contrarian in me sees that there's also i think positioning which we've talked about you can debate how real time it is but when i look at hedge fund positioning but more important i look at kind of overall investor positioning i do think that the bearishness that's out there right now and certainly that's taking place quickly in the last week is enough to make me say hey, look, we're going to grow 2% in this quarter, i realize things can change in a hurry dan brings up a lot of relevant historic moments in time where people didn't see the whistling past the graveyard or in fact they were doing such, but everything we heard out of

corporate america is a lot of caution on global trade but nobody's saying my business is falling apart here and while i don't think ceos have necessarily always the ability to forecast the future they have no reason to be pollyanna here and i don't think they were. >> all right one lorm bull says growing trade tensions have him the most bearish he has been in a very long time. jonathan gall chief u.s. equity strategist at credit suisse. jonathan, great to have you back what caused you to turn so bearish? >> i think dan, you hit the point. we are flat for the last year. and if you get away from the gyrations that we have a great six months really on the back of unwinding the fourth quarter, markets don't move forward when you have a meaningful deceleration in global data. period and the second thing is we want to believe lower rates are good. when you have rates go from 3 1/4 to 1.60 and change on the 10-year the market's telling you that there's something wrong so what do i want to see i want to see interest rates

level off and start to rise. i want to see the cyclical data get better and we hit our year-end target about tloo or four weeks ago with 3025. everyone was asking are you going to push it forward do you think it's going to go up. i said listen, i think this thing is going to take a breethder for a while. and right now i think that's the case longer term we're not going into recession. there's a lot that's wrong i don't think we're going over a cliff. but i wouldn't be buying -- and by the way, in december i was screaming buy into the volatility i'm not making that comment now. >> do you think yields are going to go a lot lower? and i'm asking you this because so many people are saying i can see yields going down to 1.35 to test the prior low or i can see yields go to 1.25 or even 1 or -- but i don't see a recession on the horizon and i'm just wondering what exactly then is the 10-year telegraphing when we go from that high level to 1.64? >> the fed has inverted the short end of the curve and until the fed comes out and says that we are going to fix

that, the interest rate is going to keep getting pushed lower until -- and it's not whether they do one more or two more the fed needs to say we will not allow the short end of the curve to be inverted because what it means is people instead of investing longer term are just going to roll one-month paper over and drains liquidity out of the system and puts the system at risk. there's a reason why the market hates to see an inverted curve because it is a problem. if the fed gets religion on that i think that interest rates will rise, the curve will steepen and i think it will be good for markets. there's really two stories, though, that and the cyclical data >> that's actually -- i'm glad you brought up cyclical data again because nobody thought that yields could go down here now that we're down here everybody says they're going o'zero what happens is the sequencing important. do we need to get good cyclical data and then yields rise or can yields rise and give us a signal that things are getting better >> it's a great point. but if the fed were to let you know that they actually -- this data dependence means they're day trading the economic data

like we are. no, what they need to say is we are going to fix the curve, that -- you can't have the futures market say they're going to move 3 1/2 and them saying we'll see how it goes. if they get religion on, that i'll tell you right now, the 10-year's going to move up and bond investors are going to lose money. short of that i think it's going to continue to be here or lower. >> what is religion in the context of the reality of jerome powell is it 50 basis points in september? >> right now there's almost no acknowledgment that the short end of the curve is being inverted because they're holding the overnight rate way too high. so they don't need to say we're doing three or we're doing four. what they need to say is this is an important part of our objective. >> we're going to defend this. >> if we want to see growth in the economy we can't have an inverted short end of the curve and that's important to us if they say that tomorrow, i'll tell you right now, you're going to get a pop in yields and they don't need to move at all. eventually but in the near term they don't need to >> i'd like to forget the fed

for a second because i actually think the market thinks -- the market's an atheist right now. the market doesn't believe the fed. i think the fed's rendered itself irrelevant. you're a stock picker, a strategy invest this environment where we stay 1.65 or we go to 1.35, there's certainly been some sectors that have outperformed and there's been multiple expansion here. where is it? >> i kind of think about the market as having are three buckets. growth bucket. how many growth stocks in the s&p 500? 35 of them it's a really narrow list. you have these stable relatively low-growth companies that you have in utilities and telcos and staples and people can't believe that the p/e is so high on them but these are like bond proxies but the s&p, 1.9 dividend yield and the 10-year is 30 basis points lower anything which smells like a bond is too cheap. and they're going to keep going up as long as you have this environment. and then anything that looks remotely cyclical, until that data turns, is a dog and i would

stay away from it. >> jonathan, what would it take for you to feel more confident or have more clarity on 2020 earnings >> well, let's take a look at what's going on right now. the revenues are fine. revenues are growing at 3%, 4% not an issue the buybacks are strong. and you have a margin issue around three issues. you've got a dollar problem. you have an oil problem. and you have a big tech margin problem. and ultimately, though, the average company, the median company in the s&p, looks pretty darn healthy next year i think -- if we assume the dollar goes away as a headwind in oil and some of these big tech issues go away i think we'll be surprised but the market's not paying attention to the earnings story right now, it's all this other stuff. >> have you rachtded your target down further >> we haven't. >> what are you waiting for? >> what would it take? >> you're the most bearish you've been in however long. >> so here's my optimism or why i haven't. if we look out 18 months, and we

were talking before about what's the upside case. the yield on the s&p, dividends and buybacks, is like 3.8. the s&p is so cheap compared to bonds that when you get investors buying stocks for yield instead of bonds for yield i think ultimately the valuation of the market has to go up but you have to wait -- and listen, if you said to me two, three years out or 18 months out, i just don't know how much longer the cyclical data's going to stay weak and i don't have to be early on this one. but if you said to me a year and a half from now the stock market's going to be higher than this >> jonathan goal l ub of credit suisse what do you think of this tina valuation? >> it makes sense. the yield thing came in pretty hard when we saw the dramatic drop in the 10-year so quickly bubbles get created all the time because of this. we know that the staples are going to be really, really expensive trading at 25 times. no growth. all that sort of thing

i guess the concern for me is you talk about the market right here, we just didn't have the confirmation of the new highs. we had a new all-time high on the s&p 500 last month and we didn't see the aga or maga you had microsoft -- >> maga. you didn't have small caps you didn't have the banks. and you say to yourself what the heck is going on here because it doesn't look like a whole heck of a lot of broad strikes in my opinion. >> can we i think just cut to the chase here if you listen to the conversation on the desk tonight and you tloins what the new strategy rifts saying, if you removed the sense there was massive black swans, systemic risk in the world, wouldn't stocks be a buy here >> what do you mean by black swans? >> my sense is people look at hong kong, they look at unprecedented territory -- >> slowing global growth >> people are of the view not that equities are falling apart because earnings are falling apart because the u.s. economy's going straight downhill. they're looking at these other factors and they're assuming there is a black swan on the

horizon. not looking at fundamentals as they are right now >> we're just getting started here on "fast money. up next a bullish bet on bitcoin. one wall street bank that sees more than 20% upside for the cryptocurrency we'll raek down that call ahead. later pulse check on the consumer the one chart that says the american shopper might not be doing as well as everyone thinks we'll explain. 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. you've done a lot of good for the world. but i feel like you have the potential to do so much more. can we build ai without bias? how do we bake security into everything we do? we need tech that helps people understand each other. that understands my business. we've got some work to do. and we need your help. we need your support. let's expect more from technology. let's put smart to work. ♪ ♪

welcome in to "fast money. following a developing story out of argentina the peso plunging against the dollar after the country's center right leader had a poor showing in primary elections last night the political pressure not only the latest in a string of issues facing argentina the economy's still struggling, unemployment and poverty rates climbing and a host of other pains for the south american country so tim, what do you think? zplt bigger issue for the peso is are you starting to see what was looking like reformist governments that were taking hold again in latin america? again, this is about ten years after the last time or maybe 15. but macry's losing in the primaries was devastating. it was a major shock and then that bleeds into brazil brazil in currency terms, dollar terms is down about 3 1/2% today. and the sense that also in brazil you'd actually seen the pendulum -- this is what happens. it goes back and forth

at least it has in the last 15 years. the question is we're actually getting to a more leftist non-democratic environment over there. that's terrible. the bottom line semiengineering markets so far have been pretty well contained in all this madness outside of what's been going on in china. if you start to see the currencies break down, and again i just bring up the chart of the brazilian real somewhere around here over the last couple of days you started to see this thing break where it looks like it could go straight to 4 e.m.'s been a problem where crisis have spread to in the past that have not start there'd and that is something that people are looking at right now. >> it's not even as if things are that great under macri so far. inflation's been skyrocketing. but the alternative, fernandez and kirschner. when you look at what kirschner did before, currency controls, a multiyear standoff with bond holders -- >> so that's@peso moved 15%, which is a massive move for a currency as well as bonds fell apart. this is -- everybody priced in today the fact there are going to be capital controls and they actually started pricing in the

fact that argentina might default on a bond in 2021. that's what the market's thinking to tim's point, though -- >> we've seen that movie before, though, right? >> well, yeah. but the real play as you pointed out is does this spread to other emerging markets argentina on itself is probably not big enough to impact the u.s. markets or anything else. but if it starts to have that contagion effect that's where it becomes a problem. >> hopefully it doesn't have that contagion effect. but from my perspective argentina does a lot of things really well. they've got great red wine they've got great steak. tango. but then they also have runaway inflation. >> tango do you ever tango? >> i've done it before, yeah it's a lot of fun. i'm not good at it but you know, it's a good time inflation was up 55% last year that's just -- that's absolutely crazy. they've defaulted on debt time and time again their currency is down big-time against the dollar i think the dollar's appreciated 300% versus the peso over the course of the last three years just not a place i'd want to have any money right now

>> whenever we falk about currency instability or potential devaluation we think of bitcoin of course and today goldman sachs hay big call on bitcoin saying that bitcoin will run 23% higher in the short term with an even bigger potential down the road and that run would take bitcoin right to around 14,000 in the short term so what do you think of that call >> i like the call but i am a bit concerned about the bitcoin market so i do think we actually have one more leg in. generally in bitcoin and other commodities, kind of this last leg of the rally is usually a pleat big powerful trade what concerns me about bitcoin right now is we're not seeing the address growth the reason why i look at that is because that's fundamentals. that's new money coming into it. so we really need to see that address growth what's been going on, bitcoin's been trading right with gold for the first time since i started talking about it in 2013 macro players and other investors are actually using bitcoin as a currency hedge. so that's startsing to happen but it's pure speculation. we need to see buyers come in, some real buyers >> it seems like bitcoin has

just kind of owned the entire crypto asset space in the last year and a half or so. are you seeing this massive shift? because this move has been really substantial and one of the bold cases i think back to 17-i can't even remember what they were, other than momentum, was that it was uncorrelated to traditional risk assets are we seeing that play out? is that why we're seeing the ability for this move to kind of stay put because macro players are trading it >> this is the perfect storm for bitcoin. you have multiple currencies around the world breaking down at the same time that institutional investors are actually embracing this asset class. so the combination of those two things have funneled all the money into bitcoin that's why bitcoin's outperformed so much in this environment. >> look at gold. i don't want to take the focus off of bitcoin, but i do think the original bitcoin was gold and if you look at the break of 1500 today, and for someone that -- for the 2 1/2-year resistance we kept running into around 1350 to 14 lunn definitely wrong there and now it's time to go the other direction. there's no question the market

is using gold as that proxy. 1700 will certainly be challenged and if you like gold you'll probably like silver more because on a relative value the gold-silver index it's massively outperformed and silver's underperformed >> you can read more about bitcoin on our website, fastmoney.cnbc.com i'm melissa lee. you're watching "fast money. here's what's coming up on the show. >> the big gamble. en tensions on the rise in hong kong how will it impact gaming revenues in neighboring macau? we're rolling the dice on china ahead. but first, the cannabis countdown. a pair of pot stocks putting out results this week. we'll break down what you can expect frotiay a copm lrndany growth when "fast money" returns.

welcome back to "fast money. retailers like macy's, walmart, and tapestry all reporting results this week. we also get a slew of economic data including the consumer price index, retail sales and consumer sentiment with trade tensions heating up the consumer could get crunched. mausy's ceo jeff gwinnett telling our own courtney reagan last quarter if tariffs are levied on the remaining $300 billion worth much goods which looks like is happening now it could "really impact our categories it's not in guidance and when you do the math it is hard to find a path through that would not impact customers." so with that said, now that we know the tariffs are coming, what do you think of retail? >> i don't like retail for that exact reason the one thing that retailers have been doing across the board is they've been absorbing some of these tariffs and they've been keeping prices low. china's actually kept prices low. but now it's getting to a point where you can absorb 5%, 10% but at 25% tariffs if we start to go 10% to 25%, that becomes a

real problem prices start to rise and sales are going to go down so any of the ones like walmart, that chart looks terrible. any of those names that have exposure to that, to me are just no touches >> i think there are certain pockets of opportunities within retail one of the companies we like is tj max right? kohl's and macy's, they can participate tariffs on all these goods coming in. they're not going to sell them those goods are going toned up at t.j. maxx and they will sell them because people love going there for the treasure hunt experience beyond that there's an opportunity in companies like lulu that's a canadian-based company, not going to be hit by the tariffs. strong brand loyalty i was just on vacation in california all my girls wanted to do was go to the lulu store. people go there, they continue to buy it even if prices go up they're going to continue to spend money there. >> you were i can mag the point earlier they're the staple retailer which are doing okay and then the department stores that are not going to be able to

weather the tariffs very well. >> listen, we don't even have to talk about the -- literally year after year the last five years one of the worse charts in all the sectors of the market, it's a disaster the issue with some of these big box guys like walmart and target and costco is their margins are really narrow. that's a big issue that being said, i'd rather be there. just one other point i think is really important to think about. we were spending a lot of time talking about rates. what are we seeing in autos? what are we seeing in home sales? we're seeing them down year over year so when you start thinking about where is the strength of this consumer that's 70% of our gdp is in, i don't see it in the same way >> i just think the operating margin in walmart has been priced to perfection i think there's going to be pressure there and if you look at best buy, that's a name always trades -- guess, what they to me are the ones in the greatest line of fire from this trade war >> let's turn to the charts. consumer staples and discretionary, they've been among the s&p 500's best perform's sectors in 2019. but despite the gains the chartmaster says there are plenty of potholes on main

street carter's over at the plasma. hey, carter. >> hi, guys. that's just it there are potholes and there's also what is perceived to be and really what is one of the perceptions that consumer discretion as a sector has been a great performer and the reality is of course it's not a great performer let's try to unpack it two lines the blue and orange. the blue this is since january '18. 18 months plus up about 15% that's essentially double the market market's up 7. the sector's up 15 you say what's the problem now, it's always a few names holding up the group, keeping everything alive if you make the equal weight sector let's add it in all i've simply done is taken the blue line and not given amazon the weight it has in home depot and others 62 stocks, almost $3 trillion. what we know is it's a big old goose egg. the sector itself up 15. equal weight

unchanged. actually down a fraction that's the real story of consumer and it's what dan was talking about with xrt it's been with us a while but it continues and that's kind of the issue. here we're moving the s&p, here are the two. the actual and then the equal. and one could say so what? the actual's the actual. but it makes it that much harder to outperform because you had to be in just a handful of names. in fact, and we could talk about this later, five names are half the weight of the sector a couple other ways to draw the lines, this is going back the same time frame. and what we know is that the equal weight sector, right and its relative performance and this is the problem. consumer discretion equal weight relative to the actual is making new two and three and four-year relative lows. now, compared to the s&p, here's the equal weight on top, and it's the same thing, making new fresh 52-week lows despite the belief that the sector's outperforming. pull this back even further. here it is we're approaching the '09 low. all of this for nothing.

meaning the relative performance has collapsed. we're getting back to crisis lo lows and let's look at two popular etfs this is the etf. the weighted one and what we know, there's no way around this, is that we're hovering and the risk is that we break. and then of course here's the xrt. the disaster it's the same thing, just in a ditch form it's a well-established down trend. you can draw the lines and circles and it all suggests more to come. not good >> carter, come on over. [ applause ] thank you, jonah so many questions for carter today, right >> a lot of questions. zblif a few. >> you want to kick it off >> why not >> first of all, welcome >> thank you >> those charts don't inspire a lot of excitement. but the discretionary chart relative to jan 2018 when the s&p had the all-time high, blew off the top, to me it looks marginally better and that would be an xly.

that would include a big boy like an amazon orring? you're talking about but is that a disaster it seems like it's just performing in line we're really talking about relative performance >> right i guess there's two ways it's the circumstance where just a few names, in fact five names are worth half the weight. 62 stocks but five, and you know the names. it's amazon, it's home depot, it's nike, mcdonald's and starbucks, are basically carrying the day one could say wait a minute so, what macy's has been going down for five years, jcpenney you're always going to sift out the winners and losers in life and these are the ones that you're -- but more and more money in fewer and fewer names is a circumstance that almost always ends badly and that is the problem. >> that means that the winners in the xrt, the five names that make up half the weight, are also going to be losers? >> ultimately if you think about the circumstance of bifurcation, it's good technique. people say i'm going to stay away from the things that aren't working. it's musical chairs. and i'm going to go and stay on higher and higher ground at some point you just get to be a valuation issue.

you get to be a money flow issue. and we have to be very close to that point >> so carter, i'm curious. you come on week after week. you talk about these equal weighted and you're saying there's only this narrow bunch of stocks that are working and you go sector by sector. and it happens to be never sector right? >> industrials, financials >> right at what point does that become a huge problem for the market as a whole? >> that's just it. you have fewer and fewer -- >> you just fed him a softball >> i'm wondering if there's precedent -- >> it is a circumstance that makes sense because as technique goes you want to try to favor winners but at some point it's just too much money pressing in on too few names or guess what? it gets down to the fundamentals at point they're expensive. >> has this been going on, though, for a long time? >> it goes on, then it ebbs, hen it goes on and it ebbs but it's particularly, well, poignant now, and it shows how fragile.

it's a circumstance of fragility. >> in your note this morning you said june lows were in play. 2022 or so >> ure, you can do that in an afternoon, you know. but the point is that there's a breadth issue. that's why you'll never hear me talk about the advance-decline line that is a concomitant index. it is a coincident index what really matters is the structure of the market. the structure of the market is a lost extended names and a lot more weak names. the bifurcation usually ends with generally lower prices. >> beyond 2022, though >> i think so. >> beyond. >> sure. >> to what, though >> why not the december lows and then some? >> december lows >> sure. unless you don't believe there will be a recession again, if things are so good, you hear about the fed model and dcf and all the stuff people -- and inverse the -- well, then stocks should be surging. we shift 30 times p/e. where are the buyers something's wrong. >> carter, thank you

mr. sunshine here. carter paxton worth. december lows. >> i would make one point. to think about it, so far the hardest hit for farmers. now we're really starting to focus on the consumer here farmers got a bailout. farmers got this really nice socialist chunk of cash that our manufacturers, right we're paying for these tariffs and then they got the money. so then pretty soon consumers, they're going to need a bailout, right? and we've bailed out consumers before if we keep ratcheting up these tariffs are consumers going to get a bailout? what do you think that means if we just have these tariffs -- >> what are you talking about? >> tax cuts. >> well -- >> first of all -- >> i would be more worried about corporate america. >> real tax would have to go to zero and below this is how it all starts. >> but if anything the place where there's an issue when slow growth, the first place you're going to stop is feel that triple beat tranche of debt that will very quickly turn to junk, some of, it if you get a lower

growth -- the -- back to the s&p. 2825 is the 50-week moving average. there's very good support there. does not mean that has to hold and in fact your next spot is probably 27 and a quarter. >> coming up more on today's sell-off one options trader just made a $2 million bet that tech's troubles are just getting started. we've got the details ahead. and later, hong kong on high alert as massive protests intensify. the one sector that could get hit hard as demonstrators dig in stay with us "fast money's" back after this quick break.

welcome back to "fast money. key names like tilray and canopy growth kick off. let's get to aditi roy with more on what to expect. >> both those companies have very different tasks at hand with those earnings. one factor favoring top line growth at both companies, canadian adult use sales were up 22% in april and 15% in may month over month as more stores opened in the country. it will be a lot tougher for those companies to blame friction in the space for lagging sales revenue. you may remember last quarter canopy growth reported a decline in revenue from gross adult use and medical cannabis sales in

canada tilray will likely be talking about domestic sales in canada but also pointing to international investments. the company just announced it is increasing its cultivation capacity in portugal we'll see if that folds into the guidance we'll also look for any comments on tilray's investment in the u.s. cbd space the company's been partnering with authentic brands which is behind nine west and juicy couture among other brands we'll see if tilray has any color on the types of cbd products and timeline we can see those things roll out from that deal canopy growth, though, has its own challenges given that last quarter was rough and this is the first earnings call after the ouster of co-ceo bruce linton the numbers canopy will report will reflect linton's last quarter with the company mark zakulin who's now sole ceo will likely set a tone of fiscal discipline, a slowdown in acquisitions and a focus on the local market morgan pasia of poseidon asset management tells me he'll be watching margins for both companies because if they're

having to cut prices to get shelf space that would have a margin impact. melissa, back to you >> aditi, back to you. before we get into this trade i want to mention that tim has a cannabis etf cnbs and for disclosure purposes all the components are listed on our website, fast.cnbc.com in terms of declines we saw last quarter in adult use marijuana was that because mainly theres wasn't enough supply available >> yeah, there were issued our last segment was called potholes on main street. this could be called main holes on pot street. what was going on in canada i don't think it's representative of really what you have. if anything what we learned from aurora and efri who already reported there's been a slight surprise to the up side some people actually feel first to canopy that we're expecting somewhere around 110 million canadian as their top line number maybe there could be a little bit of weakness there. the most important thing for canopy right now is gross margins based upon how they came in at 16% last quarter

people want to see them up around 23% aditi talked about the change in leadership look, i think there's a major driver for this company for them to articulate exactly who is going to be taking the helm and most likely it's going on someone who is a very large cpg background, which is what this company is just like their parent in constellation brands i think tilray is a story of many different very interesting strategic global partnerships. she talked about the authentic brands i think the manitoba also acquisition will be one that starts to show some returns. i think frankly in canada tilray lags badly the other big boys. you want to see what's going on. this portugal deal is one that's very interesting that is playing into their distribution into germany which people are very excited. and let's remember they're also partnered with novartis, a.b.i so they have these strategic partnerships by big consumer players. >> are supply concerns exacerbated by can trust and the finding that a second facility was not properly licensed by

health canada? >> i think in the short run we don't know the answer to that but there's no question this has been a major disruption and the corporate governance around this is something that's giving all investors pause and it's affected all of them even though i think different companies -- and this is why you really need to do your work, folks, because corporate governance risks are a big deal demand in canada, and again, this is not why you're investing in the sector and again, 25 times ebidta for tilray is not a valuation that even makes sense. it's the global footprint. it's what these guys are doing in the u.s i think that's what people are focused on >> coming up, escalating protests in hong kong threatening one big group of stocks we'll tell you how to trade this group. plus tech still the best performing sector this year. but one trader just made a $12 million bet the hot rally is about to cool off. we'll lay out the trade. much more fvt fvt right after this

welcome back to "fast money. we are keeping an eye on the latest developments out of hong kong demonstrators digging in today, forcing hong kong to shut down its main airport the growing protests could have major impacts on casino operators in neighboring macau let's get to contessa brewer back at headquarters with more on this story. contessa >> las vegas sands today dropped more than 3% and down 14% month to date.

over that same time frame wynn has lost 18% off its share price, down 1.7% today hong kong-based melco resorts lost a percent today and mgm lost 1 1/2%. but over three months it's actually up. 11%. of course it has the least amount of exposure too and reliance on its macau revenues hong kong is a major port of entry for macau and a summer of protests is having an impact last week we heard wynn ceo matt maddox on the earnings call blame cancellation of hundreds of flights for some of the softness in that vip segment and that was before the entire shutdown of the airport. gaming analyst harry curtis at nomura instanet writes today, "while the protests in hong kong and the closing of the hong kong airport will likely have a negative near-term impact on visitation to macau, the impact should be transitory and visitation should recover once the airport reopens. but of course trade tensions and

a weakening chinese economy are also creating headwinds. melissa? >> contessa, thank you contessa brewer back at headquarters i don't know if it's just the reoechth airport that's going to magically turn things around we already saw the impact on just tourism in hong kong and retail sales in the month of july were down 7%. so it's already -- it's feeling an impact in terms of consumers' willingness to get out there and spend money. >> absolutely. i mean, the airport -- today the airport closing was stunning it reopening is going to get some trickle back but i don't think you're going to see just this huge influx of people until this unrest is resolved. so you have a couple dates that are important. you have early september when a lost kids go back to school. potentially that could be it and it has to be resolved in my view by october 1, primarily because that's when china wants to celebrate their independence and they have a big holiday on october 1st. they can't have hong kong in unrest that being said, a lot of this is kind of priced into these stocks you look at something like a wynn, that was a $130 stock at the beginning of this month.

there is going to be a buying opportunity in these names once you see some of this unrest go away >> we were talking eem earlier as it relates to south america but when you look at eem, the etf that tracks supposedly all emerging markets really heavy china, taiwan, south korea so to me i think that's the one that if you continue to think that this is going to play out over months i think as maybe a hedge against your u.s. portfolio that would be a good short in my opinion. i think 40 was a big level i think if you go back and look at 2016 there was a double bottom low down in the low 30s and i think that's a level that you can see this thing moving down toward ten cent largest holder holding alibaba we know taiwan semi. and samsung obviously. >> that's a good point i'll talk back to christina. i'll say that wynn, if you listen to their last round of numbers we got information that they're basically flat year over year in terms of ebidta. but i do think if you look at the free cash flow here it's something that while not an issue for the company it's

something you're starting to see the brakes being put on. ultimately if you look at the gamers, macau peaked in may and it was actually at five months high i think part of this is sentiment was so strong for the sector at least coming into this period the final thing on hong kong to me for gamers is back

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after staging a huge turnaround last week the options market isn't convinced that tech is out of the woods yet. one trader just made a $2 million bet the pain may be just beginning. dan's at the plaza with the action >> let's talk about the qqq that's the nasdaq 100 etf. and we know that 40% of that etf of 100 stocks in the nasdaq is really weighted toward four that make up 40%. that's maga, microsoft, apple, google and amazon. today put volume was two times that of calls. and there was a trade right out of the gate. minutes after the market opened this morning when the etf was trading about 185 bucks there was a buyer of 7,000 of the november 176/157 put spreads paying about $3.11 for that. that breaks even down 6 1/2% at

172.89 on november expiration and the trader can make up to $15.89 all the way down to 157 that would be down 15% from the trading level here and one of the things when i see a trade like this i don't know if it's a bearish bet. maybe it's more like a hedge against a portfolio of some mega cap tech stocks. but it's at least interesting to look at because you know, from the chart standpoint here's the one-year chart here. and look at this up trend that's been in place since the december lows if i was carter i might be saying, you know, draw a couple circles here and saying this is some pretty important support here i just want to draw at line. this was all last year it was a really steady up trend. a series of higher highs and higher lows. once it broke we had a 20% peak to trough decline. i'm not saying that's going to happen again but if you live through that you might be cognizant of the fact it could happen again but let's go to this chart this is since the lows of 2016 what i think is really interesting is this was massive support all the way from the lows in 2016

and when it broke it last year we had a meaningful break but what happened here this trend line has now, which was support, is now resistance and these two highs, we have failed over the last year to break out above that prior level here so to me we did not have a confirmation of amazon, of apple and of google of the new highs in the broad market here and that could be one reason why this thing is lagging on a relative basis to me i think it does make sense when we get to these relative highs to start thinking about taking some gains in these mega cams or thinking about cheap dollar protection in the options market >> all right, dan, thanks for that ti" eck an for more "options aconchout the full show this friday 5:30 p.m. eastern time up next final trades 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

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time for the final trade tim. >> we talked consumer discretionary, and i do think that best buy runs into? problems here just below 65. a stock i would actually sell. >> b.k >> if you don't like the new kid on the block try the o.g. gold which is actually gld -- >> i like 'n sync. >> do you like 'n sync >> mark tepper >> i like cvs. valuation is at rock bottom

levels because of this fear for medicare for all love the aetna deal. they continue to beat and raise. >> dan >> i think veelt a bit of a disaster the xrt is one of the worst. when it breaks 38 it's going much lower >> see you tomorrow with more "fast. "mad money" with jim cramer starts right now. my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm trying to help you save money my job is not just to entertain but educate and teach and put this in context. call me at 1800-743-cnbc or tweet me @jimcramer. after another brutal day and shakin