shares have surged more than 160% from that $36 price in which it sold shares in the ipo. i talked to analysts that respect the company and story. they also argued that it looks richly valued. back to you. >> thanks very much for that don't miss tomorrow. exclusive interview on "closing bell" with ceo of box. aaron levy we are out of time thanks for watching "closing bell." >> "fast money" is up right now. life in the nasdaq market site overlooking new york city's time square this is "fast money. i'm melissa lee. stocks are running back to life with all 11 s&p sectors finishing in the green tech the big winner. coming up not one, not two, but three charts telling us where we are heading next slack getting whacked. we will break down the big headlines, but we kick things off with something, this is something that we have never done in almost 13 years on the air for "fast money." >> wow this is exciting

what are we doing? >> interesting but smart >> leading the fed's beige book. >> leading with beige. check in on regional economies is telling two very different stories. how we are adjusting to the trade war. on one hand the beige book highlighting a retail chain that raised prices on furniture but is considering reversing the price hike because consumers aren't buying it meantime, in cleveland manufacturers are feeling the pain by cutting overtime pay rather than laying off workers things looking up in philadelphia and new york. this is like a choose your own adventure book choose your own beige book. >> are you allowed to do that? >> is the economy headed down the path of new york and cleveland or are we holding strong like philadelphia and minneapolis?

gia dam uy adami. >> i'll be optimistic. things look okay, not great. that's reasonable. i think that along with the news out of hong kong where things have been tapered down for a couple of days, that's encouraging. the market is up 3/4 of a percent, 8/10 of a percent i'm still not convinced of anything i don't think anything is fundamentally changed. i think the concerns are still here despite some of the news we're talking about now. i still think the market is headed lower with the fits and starts along the way if you want a bullish signal, i'll give you one. the iwm had a decent day today we have flagged 145 a number of times as a line in the sand. if you want to be bullish in my opinion you use that as your barometer. as long as the iwm stays above 145, you could theoretically be okay in the swp. >> you're presenting the optimistic case, you are not an optimist, you are a pessimist. maybe not that deep actually. >> wolf in sheep clothing. >> is that right >> sheep in -- >> no, you're a wolf -- >> i'm a wolf in sheep's

clothing that's the one. >> scary. >> karen >> let me make sure i understand. >> yes. >> the beige book. >> can you explain what the beige book is? >> a little bit. >> survey that the new fed president -- >> semi, it doesn't come out all the time. >> no, it's not like it's every week. >> i'm wondering, were some of the most recent trade issues felt in the beige book data that we're just seeing right now? >> no. like last weekend's tariff increases, no. that makes me think, okay, it's a little bit backward looking. i'm very concerned about the trade situation and its effects on the u.s. economy going forward so, i mean, there is some stuff to like i like autos seem to be modestly higher there was some commercial real estate that was actually a little bit better. you know, we said that other bit of data, was that yesterday the pmi? >> yeah. >> so i don't know, i'm starting to see some cracks i'm very concerned and i'm not that optimistic about a short term resolution about trade. that makes me -- today's nice and the market bounces because

i'm long. >> you don't believe it? >> i'm going to be long and lose money. >> this is a glimpse into your psyche. >> really it is. >> this is something i probably don't want to know. >> very deep. >> but -- so a glimpse into the beige book folks, for folks wondering why we haven't done this in 13 years and decided to do it tonight, i'm trying to figure that out as well. look, it's a real time measure of where the fed's regional districts are seeing economic movement in consumer, manufacturing, different services and you get an overall read on the economy. the reason we should be talking about it, just yesterday, monday, it's been a holiday week tuesday we had an ism that printed back to three year lows. it was the lowest we've seen since the worst of the financial crisis it's important to take the temperature of where the economy truly is where manufacturing or the ism looked reasonably poor what this beige book showed to me is that you have, first of all, obviously regional

strengths and weaknesses but overall consumer spending continues at a moderate pace there's been nothing notable in terms of a pull back the worst kindof story in here what i read with regard to housing, that to me is more structural because of inventory services this isn't growing as briskly as people would like to see despite the fact that things are growing. half full my psyche. >> that's a dig to me. >> you're 3/4 empty in fact. this is in from our executive producer who says the beige book is taken before -- on or before august 23rd. on or before august 23rd >> okay. thanks, kevin. >> that leads me to think, pete -- >> where do i live >> predisposed to be optimistioc you love what minneapolis had to say. when you hear cleveland talking about cutting back on shifts and cutting back on overtime and this is all the way through august 23rd, does that make you concerned that perhaps, perhaps this will filter to the u.s. consumer which has been the engine of strength

>> yeah. i think you have to look at it that way when we're seeing what's going on, obviously the minneapolis numbers look fairly bullish. that was the whole point of this thing is looking at where is it good, where is it not good looking at minneapolis, what people don't understand is you're getting a huge swath of s&p companies literally within 50 miles of the s&p companies. you have a huge number of s&p 500 companies. target to polaris, you can go through a long list of these companies. i think that's probably part of my bullishness sometimes or whatever it comes because of that, what we're seeing it gives you the diversity i think the interesting thing is so far the consumer has held up and all you've got to do is look at this whole earnings season, you look at walmart, target, even michael's stores, it's really impressive to see how strong the consumer remains. now is there weakness on the horizon? i would think however long this trade war goes on, i think it

will continue at least through probably at least december or further, that's going to start being an issue, i think, and slow down the consumer in some way, especially in the areas that are so positive like we're talking about now. >> so as the markets remain a few percentage points away from all-time highs what's the saying, markets don't give you -- >> market don't give you that long to buy the low or in this case sell the high >> are we there? >> yet they have. >> yet they have. >> no, i'm not saying i'm always right. that's my saying i didn't say it was a penny earned that doesn't make any sense now either. >> what would you say now? >> i still think -- look, i have to own up to it and say, listen, the market has been at these levels for quite some time i guess it would indicate we would see a breakout to the up side but, again, when i look at the world and see there are a few reasons to be bullish in stocks, there are a number of reasons to be bearish. just the way i look at it, the bad out weighs the good. i understand that the markets hung in there extraordinarily

well i get it in terms of the consumer and consumer confidence quickly, in my world, all consumer confidence is is an overlay of the s&p 500. the market does well if people feel richer. people feel richer, they spend money. look at october and november how quickly people stopped selling money. it coincided with the market going down 20% in six weeks. >> one thing that makes me start to question how long this is going to last, when i see gold and silver lowering including today, we rallied back up almost erasing everything from yesterday. look at gld, sld, look at what's going on in the precious metals. we continue to see more and more paper saying they aren't done yet. they still seem to think there was more up side. >> as you mentioned, stocks pushing higher our next guest says there are three charts that could tell us where we are next. let's get to mark newton of newton advisors who's over at the plasma what are you looking at? >> let's look at three charts that will put this into perspective. we still have the ongoing range for s&p. this is something that has been

guided the up side and down side for this market over the last month. despite all the issues and worries, policy uncertainty, trade war with china, increasing signs of a slowing economy the market has been incredibly resilient. only 100 points of all-time highs. this is something in the last couple of days we've seen a little bit of improvement. you saw concerns about chinese tariffs. s&p only got down 50% of the prior. it didn't get all the way back down breadth has started to get a lot better today we saw four to one positive breadth versus yesterday it was three to two negative we were a lot more positive on today's strength than we were negative on yesterday's weakness i'm going pessimism. guy adami eluded to the same thing. that sea of pessimism is obviously what can help the market actually move a little bit higher into the first part of september this is the other one, technology the largest sector in s&p. this is about 22% of the s&p

right now. so it's almost 1/4 of the s&p is technology until we see some evidence of technology breaking, this is still going to serve as a tail wind for stocks. the stocks close at the highest level since late july. we see stocks like western digital, seagate hit the highest digital. intel had a move facebook started to claw at the bottom this is the key to the whole puzzle which is apple of course. a trillion dollar market cap stock. this has formed a very interesting technical pattern which is a symmetrical triangle on the heels of a big rally. 80% of the time after a big run up these triangles oftentimes are resolved by a movement to the up side, not the down side so my thinking is it's a huge constituent in the xlk obviously the s&p, the qs, right now with charts looking very bullish on apple at least for a breakout to the up side, i don't want to be betting too much on the down side just yet you want to see a break in

technology you want to see return to that pessimism -- turn to optimism, this hong kong could be it that's a key resistance. we might get up to 3050, 3075, that's my target i expect sentiment will get more and more bullish for now, you know, it's really right to bet on this 2940 being exceeded in my view. >> 2940. all right. that's almost where we are right now. >> right >> still a little bit higher mark newton of newton advisors tim, paul hickey said we've been at or around 2900 up and down from there. >> 25 sessions in -- >> the past month. >> yes >> so is that -- are those charts convincing enough to you to say, yeah, we'll go higher? >> well, i think what mark's pointing out is if you're drawing that trend line off of the lows, despite all of the volatility, to be clear, this

150 poimpt range on the s&p, there's been a lot of volatility there's been a number of days that have been plus/minus a number of days ultimately i think if you look at where the market has digested the yuan, dollar, yields, it didn't break out, stayed at 147 on the ten year, i think that's bullish. i think sentiment which had gotten certainly a month and a half ago was way too bullish, certainly overly corrected to the down side. i think the risk is the up side. you've been beating up there 11 times you failed at 2940, that's bullish. >> talk about apple. so i'm not a macro trader, but i am long apple and, you know, i'm nervous because i do think they're somewhat in the cross hairs of trade, however, i do want to own it i'm willing to ride some volatility which you've seen we may see more. i believe in the evolution of the story and i want to be there for 5g i don't know when we'll really start to see that going, but i'm

not going to be good at selling it before then and hoping it trades in front of that. i'm happening on and nervous but i want to be long. >> look, i think the bull case is you understand the president has the market i guarantee he watches it all day long he's laser focused on it if it gets to a certain point, he's going to do whatever needs to be done to get the market higher i think that's part of the bull thesis i think that's legit we looked at a chart that looks like it's breaking out at the up side we had b.k. and braxton worth talking about the megaphone. you can look at the charts and have two different outcomes. i look at the chart. i'm predisposed to be negative i've said that from day one. what can go wrong will go wrong. i look at all of the headwinds the vix at 17.5 is too cheap. coming up, slack getting whacked in the after hours the company's conference call is just getting underway. we'll break down the big headlines. later, high risk/high rewards. the booming cannabis industry.

pot stock folds are betting on another big breakout we'll debate that ahead of tonight's big premiere 6 p.m. eastern time we're live in times square much more "fast money" after this do you have concerns about mild memory loss related to aging?

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welcome back to "fast money. we've got an earnings whip for you. slack fell tumbling after reporting lipton is on in palo >> reporter: that's right, melissa. to give you some idea, morgan stanley puts slack at 20% on a growth adjusted basis. so slack really had to come out and justify that pricey premium. it came up short shares are plunging. about 14% in the after hours, 15% now. within striking distance, just 40 cents above that direct listing or reference price of $26 a share. in that joining other newly public unicorns, uber and lyft in their post ipo slumps the call is just getting underway it started with founder and ceo

stewart butterfield. he said the next five years will be very different because they came out of the gates with a near perfect market fit but over the years they've begun to see real product market fit for larger enterprises he says that they saw win after win from some of the largest companies in the world now butter field also calling out one use case that uses office 360, a customer, but he notes that that company still chooses to use slack for communication. in talking about this, he's speaking directly to some of the biggest jitters and some of the biggest concerns around slack and that is competition from microsoft teams and slack's ability to win paying and big enterprise customers the company saying they grew paying couples by 17% year over year to 100,000. slack ceo and founder stewart butterfield will be on don't miss that. >> deidre bosa in san francisco

on work which is a ticker for slack. for them to say, oh, if the customer uses windows 360, still uses slack, i mean, that would be a huge concern. >> i think it is a huge concern. it's something i've voiced many times about this company because of the fact that my concern is they're going up against the biggest of the big who can really get after them and they already have matter of fact, microsoft already has 13 million daily active so they're already going in front of the competition. i just look at this, mel, as this is going to be a brutal competition. and we've seen this go on with snap, with twitter, with all these various -- instagram and all of this stuff. it's amazing how much competition is out there i look at this i love that they have growth revenue growth is great. you look at the weekly users and microsoft is really beating them badly. i think when you look at that, you have to say it looks great for microsoft in my opinion. for slack, they're still losing money. when are they going to make money? this is like uber, lyft, some of these others show me the money. when are you going to make

money? i don't know that they're on the path to make money. >> especially when you're looking at the premium compared to sas peers. >> that's the problem, price the revenue growth is great although the rate of acceleration is slowing. we see that in many other companies. it's just a question of valuation. this market is really not -- they're not going to give you the break that you would have had maybe, i don't know, a couple of months ago these -- i think we just saw a headline of sales and marketing going up in the second half. so they're going to lose a little bit more. i don't think you've got to -- it should be down a fair amount because the valuation is just too high. >> let's get to palo alto. that stock is also lower josh lipton has more on this josh >> reporter: lower but well off the lows they had been down a whole lot more i did check in with a couple of analysts two issues they flagged as a concern here one they would argue the ceo took over 12 months ago.

he's been making acquisitions and focused on free cash flow. that did miss by 25 million. if you look at the product segments, product as a segment, that's legacy, on prem, fire wall, hardware, software, 306 million, that was a miss as well he was sort of laying out his strategy for this company. he's telling analysts, listen, almost every customer he meets is on the way to the cloud he sees this growing strongly and he sees big opportunity for cloud security that's why he's making acquisitions he announced another one, i.o.t. company called xing box for 75 million. he intends to build the best platform out there he's thinking about this company and be sure to check out the interview tomorrow on cnbc on "squawk" on the street >> i.o.t., internet of things. >> palo alto continues to take share from other firewall vendors.

in a world where we were talking about the multi-cloud vendors, microsoft and google being so dominant and i think going to be beating up continually, i think there's a fire wall between those guys and these guys in firewall space i think it's way too specialized. i think they continue to fly in this vein. >> we have a market flash. that stock is plunging in the after hours session. meg terrell has the latest. >> mallenckrodt is down. they're restructuring and has hired the law firm latham and watkins and alex partners to advise it. this is a report from bloomberg saying that they may choose to seek bankruptcy protection here if its legal liabilities aren't manageable this has to do with the opioid lawsuits that are happenin around the country right now it's one of several companies named in all of these lawsuits more than 2000 of which have been consolidated in a federal

kasen terd case centered in cled already under tremendous pressure over the last year. if you go back even five years the stock was at 120 it's now creating at about $2 down a lot in the after hours. this report saying it may choose to seek bankruptcy protection, mel. we've reached out to the company that declined to comment we'll bring you any more that we get on this. >> i think a couple of days they drew down their last credit facility so they were really reaching in terms of liquidity meg, how many companies are still viable, shall we say, that are swept up in the opioid lawsuits. >> reporter: that's a really important question this encompasses companies that are as large as johnson & johnson which is incredibly healthy to other companies that are facing a lot of debt lik endo pharmaceuticals and teva which is bigger. the companies are watching their bonds very closely and saying they are in sort of dangerous or scary territory because of these potential liabilities but, of course, it is also very hard to

tell what could come in this situation. there is a trial that's set to start in october and it sounds like companies are trying to avoid going into that trial. we know that endo and allergen settled just with those companies in ohio. it looks like mallinckrodt is trying to do so as well. >> guy >> i'm somewhat reluctant to talk about this. i don't know what the enterprise value of this is now, but the market cap is probably after this move a couple hundred million. >> $150 million. >> $150 million. let's put that out there number one, number two, the short interest in the stock has been seemingly growing every day. the shorts have been leaning into this. tomorrow is one of those days, again, i have no idea where this stock is going tomorrow is an event unless you think it's going to zero, shorts will cover on the back of this i think the short interest is probably close to 60%. again, no idea but i've got to point out the huge short interest and my sense is this is what the shorts were waiting

for. >> should we be worried about johnson & johnson? i understand johnson & johnson is a much bigger company, deeper pockets, much more diversified business at the same time as the bankruptcies -- >> momentum. >> and there's precedent being set. >> when we think about the last settlement where it came in significantly lower than people thought it could be, they didn't admit, they certainly said in other states it's a clear-cut case i think it is state by state and i, therefore, think right now johnson & johnson has a very different fate than the other companies. >> mallinckrodt trade, 32 cents on the dollar. >> before this. >> wow >> maybe it could go up. equity goes away. >> they were buying the 3 1/2 calls, 10,000 of those traded today. you know why it's brilliant actually. if you're shorting and shorting and shorting, what a great protection you've got owning the 3 1/2 calls against your short position to the down side and a move like we're seeing today.

>> very smart trader up. up next, hot spots seeming to close down. three global hot spots cooling we'll debate this. later, looking good. pbh went soaring today we're digging in when "fast money" returns ♪ ♪ i've been a caregiver for 20 years. no two patients are the same. predicting the next step for them can be challenging. today we're using the ibm cloud to run new analytics tools that help us better predict and plan a patient's recovery. ♪ ♪ ultimately, it's helping thousands of patients return home. ♪ ♪

welcome back to "fast money. stocks rallying today in part thanks to things that happened off our shores hong kong withdrawing an extradition bill the u.k. clearing a major hurdle

to prevent a no deal brexit. argentina containing capital controls these global hot spots appear to be cooling down a bit. is this an all clear for investors. >> all clear >> well, for these extraneous -- >> all clear >> i'm not throwing up -- >> you're all clear. we learned that about you. >> we've eliminated some of these extraneous concerns. >> we have we have. but i think there's still a lot they've got left to negotiate. that's something that will hang around as well it's interesting i brought it up earlier and i'll bring it up again. when you see a market that goes up 200 plus points and you see gold and silver and different areas in the market, we have a great move in oil. i don't know how much that was covered. up 4%, that's pretty big on a wti. back over $56. we got a nice push there as well i hate to be the guy to say all clear so i'm not going to say that i feel more comfortable probably but i don't know i would say, you know what, it's time to go in like a bull. >> all clear is a horizon call

how long is it all clear for >> tomorrow. >> well -- >> all clear has been the last two weeks of investing in germany over the u.s. >> right. >> investing in emerging markets over the u.s before last night's news and even in fact with a dollar getting stronger so to me you have more room on these trades i don't think you have a ton of room there's no way to call all clear except for the fact as we said last night we spent a fair amount of time calling hong kong, china's options and gaming and all the collateral damage. i do think this is their way of squaring this away ahead of a very important event in china on october 1st. you do have room here in the back drop where the dollar maybe in the short run was over bought. >> which ems have more room? >> if you look at latin america, brazil's been outperforming. the currency there has gone to the abyss and looks like it's found stabilization and is in emerging markets more than 50% of your trade is currency so i would take you there. >> let me ask you. do you think this is enough that the extradition bill being -- is

that enough to calm the protesters it doesn't seem like it. the rhetoric doesn't seem like that way. >> this was something that could have been done a month ago my sense is that there was an understanding that this was going to mollify, if i may, the biggest part of the outcry, and i think in the short run it has. it doesn't change anything, although i don't think hong kong was any different five years ago than it was today. i don't think it was free. >> the protesters put up on one of their chat rooms, two out of five they got two out of five of their demands. >> yeah. >> is that enough? >> since then last night this was going to be rectified sooner rather than later. it wound up being less than 24 hours. well, in part less than 24 hours later. again, i don't think anything's -- today things look better tomorrow the world could look a lot different again. i think that's the environment we find ourselves in we continue to be a tweet or two away from being up 500 dow points. >> who said two out of three eight bad?

>> meatloaf. >> "bat out of hell. >> sing it for you. >> i'm glad i know that useless fact now up next, starbucks getting a bit burned today after the company slashes its outlook. later, we are gearing up for lululemon's results. why one option's trader will stretch higherft aer reports "fast money" is back right after this

welcome back to "fast money. the stock jumping for pvh. on news that the ceo purchased roughly $10 million worth of stock. also worth noting, pvh owns tommy hilfiger and calvin klein slachd the revenue forecasts so is this a sign that there's a bigger turn around ahead for the stock. karen, you pointed this out today. >> hopefully there is. $10 million is a lot also, it's a very significant increase in his position this was almost a 50% increase he now has $30 million worth of stock. so that is really significant. stock's obviously up a lot if you look at where it's traded, if you look at the pe of this stock, even though they

guided it a little lower, the expectations were so far below that that that was actually kind of a big beat and here with the pe in the high -- high single digits, it's well below its historical average if you didn't know any of this other stuff, the stock here, i don't think, is particularly expensive. >> does this attract -- >> yeah. i love driving into dangerous, you know, ugly situations. >> really? >> what has the trade war meant for them in terms of their -- >> uncertainty. >> right. >> uncertainty it has priced in uncertainty already and, you know, they have a lot of exposure in department stores that's been a bad place to be. all of that may be priced in here. >> carter worth is one of the great technicians. >> pantheon. >> he would point out the low in the beginning of 2016 in this name was roughly $70 i encourage our viewers if you're watching do a little homework and see what the recent low was. you have a huge for a double

talbot tomorrow. on the back of which is valuable and reasonable not that it matters, but this was $170 stock basically this time last year so i think you have a lot of things lined up for you if you think the move's going to continue to the up side not unlike what we have seen with j.w. nordstrom's, which has surprised some people to the up side as well, melissa. >> interesting, guy. i would agree. i would also say if you're looking longer term, not just the next three months, six months, pvh right now, it's a good reason why he bought $10 million worth of stock i think he's thinking to himself longer term this is a great investment i still might go a little bit lower, but i think when you see some of these stocks, i keep going back to richard kinder buying kmi but he doesn't. he continues to rebuy this stock. i continue to buy because i continue to watch him buy his own stock. i think in pvh i think there's much more up side too. you look at kmi right now, you're getting 5%, that's great in terms of a dividend yield

longer term once we get through the trade war, whenever that is, i think we will, this could be a buy that we all wish we had made. >> while pvh soared, starbucks was feeling some heat. the company cut the earnings guidance for 2020. the one-time tax benefits from 2019 will be a significant head wind for the coffee giant next year the comments come a little more than a month after the coffee giant raised guidance following a strong earnings beat we had a lot of analysts say starbucks is back. the story is back. the growth is back, tim. you're in the stock. what do you make of this >> the stock is back the big issue is what do you want to pay for starbucks? you want to pay north of 30 times on a multiple. what the stock did, this is the first cold water we've seen on the stock for the company. through the last earnings period we saw u.s. comps were up over 7% they are able to bring through

higher prices. their margins are going higher the question is, what do you want to pay for the company? the company has traded sideways. it appears to remain defensive in this environment. i think it will remain defensive. >> i don't understand why the guidance was -- >> adjusted? >> adjusted today in light of the guidance they gave a month ago. >> if you were referencing a tax rate that was out there. >> is it new did it change? >> i don't know why we got that. >> pete. >> i would be concerned you brought up where it is now in terms of pe. i bought the stock and i am selling calls against it because of the inflated volatility i like that name because i see the growth they've got in front of them and the pricing power. they're attempting to go head to head with starbucks. they got a great position. the fact that they're in tea, coffee, lower price, mel, i think that's something that's much more appealing to the chinese. >> they have less overhead they have quick print. they don't have places to sit with free wi-fi and open bathrooms all day long. >> which is something we're

seeing coming from other places. ca caribou in minnesota, they're calling it cabins. >> nice. >> they're not going inside, they're walking off. >> what the folks at home can't see, mel, is when you mentioned bathrooms, you looked directly at me, as if you understand like there's some problem with my constitution, which i find -- i have feelings, too >> your digestive cyst testimony is like -- it's like an orchid. >> i am as well. with that said, i'm shocked the stock didn't trade lower. >> it was unclear what they actually did. >> earlier it did, but it came becquereltivelily well maybe that's a function of the broader market, i don't know given its trading 31 times forward earnings, you have every opportunity to sell the stock today. the fact that it didn't sell off. >> 50% here is pretty encouraging, i think. >> all right coming up, it has been a mixed bag for pot stocks this year we will lay out what big catalysts could put a spark back into the space the booming cannabis industry.

there it is. tonight at 6 p.m. plus shares of lululemon lifting higher this year one trader is betting on a bigger rally in reports earnings tomorrow we'll see what has the market so zen on the stock "fast money" will be right back. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory...

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is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today. welcome back to "fast money. 2018 was the year of the pot stock in cannabis. bulls predict there's another one on the rise. right now may be the best time to get in. >> reporter: are we going to look back at this time and think, that was the time when cannabis really took off

where it was really publicly accepted where the money could be made. >> absolutely. >> oh, yeah. >> oh, for sure. >> when we opened our first store one of our investors was learning jujitsu so that he could better handle himself in the event that he did go to prison. >> steve white, ceo of harvest health and recreation, one of the largest cannabis companies in the u.s. >> what's changed? i mean, what is it about right now? >> historically for the average investor cannabis was way too risky. in a couple of years your question is whether or not everybody's going to be on board. so right now you're in that sweet spot where you can have -- where you can make tremendous returns if you invest in cannabis. >> we're at an inflection point, the golden era of cannabis investing? >> yes, i will say this is the golden era i will say that. >> danny moses, legendary

investor aka the big short. >> danny moses, the optimist of the bunch and a hell of a trader. >> so that was the big short >> yeah. >> is this the big long? >> this is the big long. it's the best macro economic opportunity i've seen in the markets within my career. >> was there a light bulb situation when you thought, this is it? this could be a huge business? >> well, i went to a dispensary in denver when the market opened and it was eye opening. >> vivien azer, the first pot stock analyst for the cowan company. >> there were old people, young people people that looked affluent and not. >> in five to ten years how big will this industry be? >> cannabis in the u.s. should be as big as tobacco in the u.s. >> those are a few reasons why bulls say now is the time to invest hear more from them. plus, fascinating arguments from investing in the space the risk factors all of that on "high risk.

high reward cannabis inc." at the top of the hour after "fast money" on cnbc tim, you are a long-time investor in this space you have an etf that has various positions. i'm wondering for you what do you see as the biggest risk factor >> first of all, you have a lot of companies that are still relatively immature companies. but the environment where corporate governance and really assessing that landscape is the toughest thing to do in an early asset class. the regulatory environment to me is a tail wind i know it feels like we've had so many tail winds but when you think about the industry, there's been a fair amount of headwinds relative to what people thought for example, the east coast hasn't flipped and gone fully recreational everyone thought new york and new jersey would have made their approvals to be ready by year end. the dynamic with the doj, so the hsr holdoff, which is the hart scott rodeno act which you don't

need to know all of those initials which is to know that there have been a number of very big deals in the sector that have not been approved because the doj hasn't signed off. a lot of people felt that wasn't the government signing off in talking to a number of these ceos, they're quite pleased with the doj. they're doing thoughtful work. the doj is taking this industry extremely seriously. i think that's a catalyst. the big catalysts really are the banking acts the safe banking act which will allow states that have approved and where the people have voted and where as we know constitutionally the states should do let them be banked let them have accounting practices to follow normal accounting practices i think the tail wind's out there. it's not a polyana view. there's obviously a lot of pitfalls that can go on and i think it's very, very early stages, but this industry is still so disaggregated that there's a lot of room for aggregation. >> it's not the medical research to back up the medical claims which is a big part of the

investing story. because some of these companies are very immature and they're new, there are corporate governance issues that investors need to be aware of when they go into the space. >> it's intriguing there's two part bifurcating the medical with recreational i'm sure you know, is there another giant tail wind of the pepsis and whoever, constellation brands, giant companies in, you know, the snack space or related or spirits or beer or whatever becoming buyers of all of them and the valuation just going up dramatically. >> you would need federal legalization for that for an outright acquisition, right? >> you'd need federal legalization for these companies to put their own listings and a lot of their core businesses at risk. i think they are waiting i think that hemp, cbd, farm bill legalization has given a platform for a lot of companies to get involved now and lay out that infrastructure. what's that infrastructure

that's cvs some of the biggest retailing chains are involved and have partnered with some of the existing multi-state operators i have to say even though we know the industry is going to change dramatically and a month is a dog year. it's moving so quickly that i think you do need to be investing and staying close to people that are following the sector i think you're going to get to a place where you see some of these regulations play out where you can get big companies to come in now. the multi-states have a head start. i think some of these big players are going to be able to box people out. >> by the way, for all of tim's disclosures go to fast.cnbc.com. at the top of the hour the show is coming up. up next, lululemon gearing up for quarter earnings. they're betting the stock will soar on the results. we'll break down all of the vetion li at the nasdaq in times square much more "fast money" still ahead. that's why, your cash automatically goes into

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welcome back to "fast. presidential candidate tom steyer will be talking about the race, the white house, the economy 8:45 a.m. eastern on

cnbc. also happening tomorrow, lululemon reporting results. shares of lieu lieu bucking the beat back. options traders are betting the stock could go even higher let's get the action with mike khouw in san francisco. >> reporter: 10% higher or lower on the earnings event. some of the activity was some options traders believe that 10% move will be to the up side. interesting trade we identified was a buyer of the september 6th weekly 1.80 callings paid about 7 bucks and helped finance that trade by selling the september regular 200 calls at about 3 bucks. all in they were spending just under $4 to buy that spread. the idea here is that the near dated calls will appreciate if the stock pops.

you would expect it to see 30. that's how they'll expect to see the bullish bet after they announce results. >> pete, you probably saw this action today how do you feel by lulu? >> i'm very bullish. i've owned the stock it was a pitch stock i thought it was terrible. men's, kids, ecommerce those three are the legs that are going to push this higher. they have more exposure to the asian markets as well but a lot less than people would ever know i think there's a lot of growth. >> how do you feel about spandex, pete? >> i'm a big spandex guy. >> long spandex. >> no, the home viewers might have been negative, but i remember the power pitch. >> yeah. >> fast pitch. >> that, too i think i gave a giddy up. people were knocking on valuation. look at the eps. they have it operating margins continue to hang in there. you remain bullish in lululemon. i have -- >> you have a pair of lululemon

pants. >> multiple. >> are they yoga pants >> no, underwear, boxer briefs. >> too much information. >> pete's been on that. >> we talked about the briefs. >> for real. >> thank you, mike khouw full show friday that's more than anybody needed to know. up next, the trade fitrade. natra. e e , 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. ♪

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let's quickly recap some of the big hours after movers mallinckrodt down. it could hire a firm to advise it on the company's opioid lawsuit costs. palo alto making a huge reversal the company conference call got underway the company shares are up more than 5%. more on our website cnbc.com final trade time pete >> i'm going with intel. >> first trade should be to tune into the cannabis special. second should be go check out brazil and the rest of the world outperforming again. not forever. for now. >> chair woman >> yes, if you want to be long or have to be long, you have some protections

>> pete. >> talked about a lot of things tonight. pvh -- >> sure did. >> despite the fact it's had move to the up side, i think there's further room to the up side melissa, back to you. >> back to you tomrow orat 5 for more fast, don't go anywhere cannabis, inc., premiers right now.