bullet. >> good or bad for stocks. >> i think it should be good for stocks because september will have not lived down to its reputation as being so bad you didn't have any more stress in the financing markets. but tough to say though because market hasn't been persuasive in saying it wants to go high sfwleer we are out of time have a relievly weekend that does it for "closing bell." >> "fast money" begins right now. live from the nasdaq market site overlooking new york city's time squares s in "fast money." i'm membersa had traders tim syria. steve grasso guy adam judgy and joined by jeff mills chief investment offers at grid more trust. the new twist taking down the markets new reports the trump administration considering blocking u.s. investment in china. that includes possibly delisting all chinese stocks from u.s. exchanges. those headlines sending stocks sharply lower today. let's get the latest on the developing story eamon javers live at the kwhous with the details eamon.

>> that's right. i'm told that those headlines that crossed earlier today, those are accurate headlines that's what got the market's attention. they are considered o considering some measures behind the scenes here at the white house to stop u.s. investors being able to invest in chinese companies in one way shape or form or another. but they're very early on in those conversations is my understanding. and there is no time line at this point for any fundamental decision all of in framed in the guise of investor protection. the idea is there is a concern that there are some chinese companies that may be listed in the u.s. that aren't exactly what they're purported to be bus of the accounting scattered showers and other differences between the way the two countries handle corporate disclosures. so that is being discussed behind the scenes. it's not clear there are a lot of options not clear where they land or when the decision is coming one model for it might be the piece of legislation that senator marco rubio and others are considering on capitol hill. they have talked about that in the past

the idea there would be they would delist companies unless they conformed more stringently to american securities regulations, the chinese companies would. so that's one proposal but rubio's office cnbc this afternoon they have not been in direct contact coordinating with the white house on the proposals that the white house is working on that is a separate idea moving on a separate track but gives you a sense of where this might land ultimately it's still tbd. >> would this have to come from congress, eamon or a vote by the s.e.c. how can -- how can the administration force an exchange to decide the listing standards? >> it really depends on what they decide to do, right some of those ideas would require congress to pass law and the white house would have to get support from democrats to do it because democrats control the house of representatives in a contentious election year that might not be doable

there might be other smaller regulatory changes they can do on their own i'm told the mechanics of this are still being discussed. and they don't have a particular plan for how to roll it out yet because it's still very early on. >> okay. eamon thank you very much. eamon javers there are so many ways to go but what is definitely clear is the reaction in today's markets. a lot of the chinese etfs closed lower. a lot of the chinese did the same the trade war poster children stocks like semi conductors took a leg lower as if micron news wasn't enough. where do you go with in. >> i don't know what ths, number one. however if it's a northbounding tactic getting into the october date whenever that is, the 10th or so when the two sides sit down it's a high-stakes game of poker they are playing there have been rumblings about this over the years. i don't think it's been considered all that serious.

a northbounding tactic but if you told mean 8:30 this morning that the headlines would come out and say where the market going to be i would say given the back drop of everything, s&p will be down 50 to 607 handles nasdaq will be down 150. and and the bond market explodes to the upside. none of that happened. again it speaks to the complacency or the broad are market or strength and resiliency of it i say it's kplasen but i understand the bull case that it's strength in relative strength given the rest of the world. >> probably all those things if. but probably more resilient and not getting ahead of this and the fact that this could never happen i don't think you can delist all the names. i don't think it's going to happen but when you look at- we're at the end of the month, end of the quarter. when you look at where we were 7 handles above negative on quarter we bounced back dramatically from the middle of the day. that's impressive. >> that's true >> and we did buns back right

off the 50-day to the number i think there are a couple of things to think about. number one think about the msci indexes for example. a lot of our clients and clients in general they got exposure to international stocks, emergeening markets. via etfs to track the index. when you think about eem you are talking about 30% exposure to china. that's systemically going up as they've been increasing exposure to china as far as the broad market i think we are range bound honestly to your point about the recovery today, i think it comes down to positioning as well as sentiment. i keep saying it again and again on the show. i sound lake a broken record probably but cftc position attention second week net sure aaii bull/bear survey. bears outweighing bulls. doesn't mean we can't correct and have have volatility but that puts a floor under how bad it gets. >> nice haircut. >> i did it for you. >> the way it's done, right.

>> this felt like an american company here by will no longer -- and so in terms of what listing standards are let's be chlors there are a lot of chinese companies that aren't listing that can't make the standards. the good news folks the american listing standards are high including accounting standards and transparency and corporate governance i think that's the standard and that will win out. but we're talking about jeff is talking about emerging markets which i would put closer to 40, 45% china. and where you can see from the april highs, the downtrend which em is now four, five sessions well off trying to breakthrough. it's a downtrend and can't break through. with the dollar going higher i have trouble seeing this breakout alibaba is a name i'm long and done nothing a year and a half essentially sideways if you look at the upper end of the age between 180 and 190, this is a stock that's been dead money zpoit the fact that you had an invest -- two-day investor day jack ma moving on.

people thought there was going to be more transparency, more insight in the financial a little more insight into how they run the businesses. it's not a particularly exciting time to be investing in emerging markets or megacap names. >> you say regardless of the noise it's not right time. >> i don't think even if the trade war ended tomorrow -- i think niece stocks would get a pop. but the problem -- i'm concerned about the longer term game. >> the 2321 names if everyone goes on 196. if you add in hong kong it's 229. none of them meet the accounting standards. >> what sfwlum of the listed chinese stocks listed on american exchanges >> 156 companies >> it's 156 but if you go with the hong kong number adding in hong kong and chinese stocks, it's about 229 >> okay. >> okay. >> none of them meet the accounting standards of the u.s. listed companies none of them do. some. >> you're saying there is two standards. >> two standards right now that's what the debate is base

and with that equitable act that they're talking about they get three years to comply. once that they delist. >> i i'll take steve's word. i can't speak to the standards to be delisted but the question is is there retaliation now. >> yes. >> that's the bigger concern we pushed the envelop. the chinese push back. it gets back down to does this make a deal more imminent orp make a deal less likely? i would say this makes a deal less likely. again, it's shocking to me and i've been wrong so i have to preface. it's shocking that even off the back drop of everything that's happened the last couple woks the vix mass ma 17 handle and still within a whisper of the all-time high on the s&p 500 the iwm the russell look where it stopped on the up side stopped where with we topped in march. closed lower today to me, the russell has been a

tell-all along and if that's rolling over from here that might pull down the broader market. >> i thought you were going to add in the price action of the exchanges today. >> yes. >> fair enough you're in my head. >> more so than in you're own head. >> on ice. should be troubling to all us. >> on the ice that's a small portion of the revenues. but it's a larger portion. and of course you had people shoot first and then roerch eset later. this is important but going on for years and stems from the house of representatives not from the white house the white house is actually picking up on it. >> i understand this has been going on for years but hasn't been going on until recently with the context of a trade war, with the context of a china going look for ways to guy's point and if china retaliates what can they do? they can make it difficult for u.s. companies to expand in china. to do more business in china, to get their stuff through the supply chains in china do jvs in china and go there.

>> it already was. to be clear companies like apple and some of the technology companies have figured out the rules of engagement and have kissed ring so to speak. i think that's how a quid pro quo takes place. i do think that this is -- guy, you are right. ultimately it's very difficult to see how this doesn't lead to a ratcheting up of a tit-for-tat. and i think we go to october 10, i think the market is a little bit too complacent as it relates to trade i think jeff talks about where positioning -- well, not so complacent, actually. >> right. >> even though i think in the last couple weeks, the aaii bull/bear spreads are things that can change quickly. they're like relative strength indicators getting overbought, oversold but the general poging in equities is under weight. >> and the one thing continuing to be strange but the correlation between trump's approval rating and the deescalation of trade tensions and they're positively correlated truch has to know that he sees the approval ratings and

the approval ratings are directly tied to the votes he is likely to get in the presidential election he has to know in the back of his mind even with impeachment coming up maybe that pushes him to want to do a deal more so to save face there. and to to your point about the positioning the one thing maybe underappreciated is is that look the economy sthant bad consumer confidence bounced a bit today. the housing data is better i'm not saying off to races. but as it relates to support and potential catalyst for the centsment reversal. >> why would china retaliate. >> why wouldn't it retaliate. >> because they don't want the supply chain to change anymore it has with tariffs. we've heard of apple trying to work around china already. why would they give other companies more incentive to try to do that make it makes it less likely a deal is done but i don't see a retaliatory measure that behoves china to do. >> maybe i think what the other thing trump knows and see he is he is always emphasizeding the sfrez

the difference in chinese markets panel u.s. markets pappen and they're feeling more pain than the u.s. markets this is a way of weaponizing the trade war. saying we're going after chinese stocks making it more difficult for you to raise capital in the best market in the world here. and that's going to hurt you. >> i -- i agree 100% which is my point is the ---en a steve might be right why would -- i think as americans we look through everything where the prism and lens of being americans. it's hard for any of us to understand how the other side would react. but if you take a step back and say to yourself, who is in a better position? who is in a position that can outlast the other president xi doepts have to run for re-election in a year. president trump does my sense is -- i've said this for a while. i think the chinese are better suited to play the long game than we are. >> i think very clearly though our markets are the deepest most sophisticated in the world china wants to be part of the markets i think this hurts. >> quick programming note here

senator mitch mcconnell will join "squawk alley" this monday mpds for a interview catch it 11:00 a.m. eastern time see what he has to say about this we're getting starred on fast. up next the bank breakout on the financials on fire this month. find out what driving the action bettingen oh theland builders the chart master will play with us a stealth way to play a housing boom live from times square in new york city. much more "fast money" right after this hmm. exactly. liberty mutual customizes your car insurance, so you only pay for what you need. nice. but, uh... what's up with your... partner? not again. limu that's your reflection. only pay for what you need. ♪ liberty, liberty, liberty, liberty ♪ doprevagen is the number oneild mempharmacist-recommendeding? memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. woman: what gives me confidence

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♪ ♪ well back to "fast money." shares of well fargo getting a above the. the long search for a ceo coming to an pen. nbny melon chief taking the helm if you haven't been paying attention. the banks on fire. the xl up 7% the past month. but is this bank breakout to go bust, steve. >> i don't like the banks. i look at the xlf and looks like double top to me perfectly from back before the crisis we had peak earnings back then peak leverage. 30 to 1 leverage

that's not coming back i think that's why a lot of the banks did so damn well is because they had had 30 to 1 leverage if that was the key money maker then that's not coming back. regulation has not lowered to the point where you see the banks run further from here. i'm shocked we have up days in the xlf i would abseller >> spreads improved tremendously in the same time period the banks went up. >> i'm with you steve. if you look at the financials chart it looks a bit better than the bank charts. the bank charts are making the lower highs. it's hard "fast money" to get really excited about the banks i understand the valueses there. i talked about the economy still being okay but it's hard for me to see a real economic skrerlgts that steepens the curve enough to be a catalyst for the valuation rerate still not feeling great about the banks here. >> well, and financials if you look at the xlf we know there are other big positions in there that aren't money center banks or berkshire orb blackstone, the outperformed of a blackstone tends to skew some of that but the question is is today's

news that at wells fargo is a catalyst to see a rerating for a stock obviously derated substantially? remember this company used to trade at a premium to the other money center banks i don't think so i think there is so much jury still to be proven let's lead with actions. lead with activity, see if you can win back the trust because right now in company should be trading at a discount and will continue. >> there are investigations and consent decrees open and wells fargo. >> you know in sports, mel, sometimes you want to hire a manager. >> by the way, why did you start that as if mel knows nothing about sports we talk sports all the time. >> all the time. >>s the that wasn't the tone. >> maybe he was just man explaining to me. >> i don't know what that means man explaining no, in sports sometimes like to hierpg the energy and the first chase no second choice. it was like when i was dating. all my choices -- but then you. >> linda is lovely. >> no, no sometimes you wind up

with somebody who you might not have thought of as that great. and they are a star. this guy might be it but to the earlier points banks had a huge fun citi went from 6 is to 70 over a couple of weeks. they've been trading instruments. i think you continue to trade them citi reports october 15th. i think you sell it into earnings. >> coming up, a big battle brewing out west wine versus we'd our own jane wells got the details on the sinful showdown, jane. >> melissa white palacek hoops are being repurposed for cannabis some farmers of other crops saying keep off the grass. thc you when we come back. s the next mozart. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine,

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welcome back to "fast money. forget the hatfields and kmois this is a turf war breaking out between we'd and wine. jane wells on the front lines of the budding battle jane >> i'm in santa barbara county this is an illegal busted pot operation next to a vineyard but there are plenty of legal cannabis farms santa barbara handed out 35% of all the permits to grow commercial marijuana in this state more than any other california county. and covered cannabis grows are now often next to other crops not just grapes but avocados. >> there is like one, two, three, four projects right there. and then there is tup more just right over that hill another one over there >> vintner blare pints calls it an existential threat to his business he is concerned about the odor which can be strong in placen. a lawsuit in oregon suggests the

odor could maybe affect tease of wine even though there is no proof of that. when will you know whether it's affecting the taste of your wine >> it could be a couple of years. if what is being proposed over here happens we're going to find out real quickly. >> this is our buy biojiesk odor cole. >> autumn shelton auto many brandt spent 100 grand upon a system to reduce the oetder around her operation and john defreely says he is trying to cut down odor by freezing rather than drying product. >> we don't want the odor to evaporate. the molecule i'm selling any of the molecules evaporate into the atmosphere that's lost revenue. >> now, some farmers on both sides are trying to work things out without lawsuits we got a statement from sanford winery, the original vineyard in this valley. they say everybody just maybe needs to get better educated

stay tuned >> i would imagine, jane it's more profitable to grow cannabis than wine at this point. >> absolutely. they are estimating in this county uc santa barbway ray says the wine grape value is 120 million. the cannabis value is 180 million and grow it on lest land and turns around much faster. >> nan wells at the forefront. >> jane, just getting it done. >> perfectly. >> perfect. >> always getting it done. >> getting it done. >> what does it mean for the industry >> well, i tell you if you think about some of theis mr.s the emerald triangle in california process hum bolt and mendocino counties grow 60% of the marijuana, cannabis. and some of the best certainly emerald triangle sell by far the best. in terms of the pricing and in terms of the competition for that land, in that part of the world, you know it and also, you know, some of the folks in the winona and spirits industry obviously feel some of the kablization of the product moving towards different types of social lubrication.

i think that's another part. >> if you think of the action of cannabis stocks. obviously some of the winds taken oh out from the sails >> i disagree with that keep going. >> fair enough longer term short temple volt tilt longer term tink it's a reasonable place to be. and if you think about the momentum in the cannabis stocks it's probably not going to pick up near-term but look about what's about to happen in canada in terms of the legalization of drinking of edibles, companies that are levered to the products in canada, they have a list of items to sell and companies that partnerwood the consequence slayings the molson core cures of world they have an advantage as it relates to selling the products in terms of names i'd want be exposed to the big are companies. >> you've had a ton of the names, the whole vaping issue has been a headwind to all the names. you want to clare that that's the biggest headwind for the entire sector. but you'll be able to pick up a lot of bargains in this entire space. and it will be business

darwinism on acreage wherever they make the most money they'll make it. a cannabis cabernet. >> i like that now far be it from me to go -- on tim emerald triangle did you just try to throw that in is that a real thing see what you learn on "fast money" as i said many times. >> lots of nos useful things. >> the more you know. >> and a viewer the emerald triangle i love that constellation brands reports october 3rd. that's how i play this. >> time for the tienl trade tim. >> talk bag money center banks there was a time bank of america was bants are painted with not a bad brush but certainly on relative value would rather own this relevant i have to wells fargo. >> jeff mills. >> echo guys point from earlier be a seller of small caps here it's fourth time it's bumped against the top of the range i think it's likely to go more downside especially if the risk off buyer continues. >> grasso carnival cruise line hit yesterday spilled to the

pace buy norwegian on the dip. >> guy. >> the oa guys are chomping at the bit i can't even wait. big week for gold next we can. new month mining, melissa lee. >> have a great weekend. pgs ohs action right after this break.

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hey there, happy friday everybody. i'm melissa lee live from the nasdaq market site here is what's coming up on the big show "options action." >> on the big show tonight. >> the whirlpool duet. >> carter werth finds a way to catch up on the home builder stocks. >> chant as much as you want the dan nathan warns the semis aren't coming back. >> costco run, huh. >> yes and mike khouw says it's over he scripts out the next plot twist. it's time to risk less and make more "options action"