>> see, the global rice in realized and emerging markets also get traction that would feed sentiment. >> the belief a traud and things get better from here good stuff thank you that does it for "closing bell." >> "fast money" begins right now. live from the nasdaq market site overlooking new york city's times square "fast money. traders on the desk with tim seymour dan nathan guy adami and chris ver own head of technical analysis at stra teige as research partners. tonight shady trump trades or pure luck? a new bombshell report raises the red flag on big money moves in the futures pits. traders front running the next big move the man writing the explosive story william conan ahead. >> why the stock struggled to hold the crown, netflix. following the report what soda pop what you can

expect from coca-cola when it reports tomorrow but we begin tonight's show with bonds, treasure bonds because something big is shaking and stirring the market. if you haven't been paying attention. bonds staged reversal. sending yields back to the highest levels in month. is this the official ends of the. >> i love the booed bootleg bond music. >> we can't use the real one. >> this is a real song. >> i don't know but it's not bond music. >> i hear the lyrics there is a man leading a life of danger that's tim seermt. >> i did ride my citi bank to the studio. >> johnny rivers why you looking at my quizzically. >> i'm asking you is this the end of the bond or bull market. >> i don't think it is, mel. i can be proven wrong as i tip cheh am on any given night bond yields go higher because economies improve. maybe there is somewhat improvement. we're in the beginning of a

turn i think you see it in manufacturing. i think you'll see it here in terms of earnings when a lot of the industrials report although the bond market had a big move from a 10-year from 147 to 178. >> where we are now. >> i think as long as the tlt stays above 135. 19.5 now i think the bond move is intact. >>. >> some of the scary stuff has awaited. china trade looks less bad brexit less bad. now chatter the fed will pause the sort of -- i don't want to say cycle of adjustments but it could be a mid-cycle pause. >> i would take it further bond yeemds recently becoming more immune to bad news as well. october 1st we print a 47 on pmi. bond yields trade back down to 150. yesterday miss retail sales today housing starts bond yields back above 175 there is a message there of some immunity to bad news >> breaking news here on the united auto workers strike

jane wells has the latest. jane >> reporter: guys just a minute i've been trying to -- i'm going off camera a second. hold on peek around the corner to see if they are academic up they are not but at any moment the uaw leadership and presidents will hold a news conference someone inside the meeting came pout and told us that the union leadership has convinced the 200 local chapter presidents to ratify the vote and ratify the contract and send to rank and file for vote. but here is what we also herron learn. the nbc affiliate in detroit, the 200 chapter presidents decided that workers will not come back to work until the ratification vote is completed and that -- the deadline according to the local affiliate is a woke from tomorrow. that means very bold move by the leadership that they would be out of work yet another week it's been over four weeks they've been out of work one of the hold ups. they were in there for over six

hours today. we thought what's going on one of the hold ups may be there is a second strike at gm with the maintainens workers. the uaw didn't want to cross that line. they are reporting a tents active agreement with the janitors that hurdle has been crossed i think one of the biggest issues still facing the vote, despite all the $11,000 ratification bonus and very, very great low health care costs, the lordstown plant in ohio will be closed. and for some members here today that will be a deal breaker when it goes to the rank and file we have to see. >> jane wells, thank you with the latest on the uaw strike the problem here is that the cost, the estimated cost which is now at about $2 billion to gm for the strike will continue ticking higher as long as the workers remain off the job. >> although, the reason they remain off the job is because there is a deal not cut that gm wants to hold certainly their line of negotiation.

i think first of all it was deal day, right we had gm, brexit, turkey, a lot of big news. to the extent this is a -- this doesn't change i don't think any of the deals as we talk about in the next segment for gm is not about the strike the story is really people trying to view where the the profitable model north america suv markets, where we are in the auto global cycle. strike workers getting more pay. the union is robust and full and able to hold out for a better deal if you trade gm stock right now this is not an sbaker of something to trade on. >> yeah, i agree we talked about it last night. remember i said what year is it you looked at me like what's your problem as it's your wouldn't to do. >> i often do that. >> gm was 36.5 and that's where it is now. if gm can't rally over the last five years when the stock market has gone nothing but higher in the environment where the car industry has been the best it's been in history. then when does it rally. my answer is it's not.

>> what does the chart. >> chart has been dead money a long time. but what's interesting if you get something to go right here you have seen competitors break out. volkswagen breaking out. toyota breaking out. maybe there is pent up demand for auto stocks but it has to be resolved >> let's get back to the bond discussion here. talking about whether or not the great bond bull market was in fact over. dan i feel like you're going to sayit's not. >> it's not. i mean i don't say definitively because i don't know chris. if you take a chart of the 50er treasury dwreeld the last 12, 30 years. it's the well defineddown friend and the last 20 years. the high in late 1999 close to what almost 7.5% or maybe higher what came after that was a 50% drop in the s&p 500. and then we had this move back up in rates to 2007 in november. and it topped out again somewhere above 5% en and then what have we been

doing, 2012 we had another s&p cut in half right after that and then we had a 145 print in the summer of 2015 on the 10-year backup 2016 a re-test of that and then we have almost had that again here >> triple bottom. >> i don't think there is anything -- i don't think there are triple bottoms and the more times you test that low after such a sustained period of weakness, i'd say they're going lower. and then take it one step further, stocks are back in again at all-time highs. where do you think that's going? if yields go lower here. >> dan, i'm glad you brought up the dates. if you look at the 10-year yield on rate of change basis, the year over year change in 10-year down 50% yields cut in half over the last year two other times happening in history. january, february of '09 and summer of' 12. and they also put in good tradeable advances in stocks and injury when you look at the character of the equity market it's cyclical.

trucks acting better semis accurating better. rest of world better if a tradeable low is in put in wonder yields -- also know german yield bond bottomed six weeks japanese yields turned i think there is an option to be a trader here with the bond market. >> i don't think so. >> low yields have not been good for equities in the last three to six months. low yields have been fear. people concerned about groebl growth reminded me of q 192016 got you to the low that you talked about, dan i agree if you look at the 10-year chart back 30 years, 12,' '16 and '19 it's the place where we stopped and bounced the question is really in a world where central banks during the time that ehave thrown money on the problem i think we have a global deflation problem, no matter what you say we are fighting deplacing aba credit bubble the biggest problem of the aftermath the credit bubble it's a cancer that needs to be carved out while it was carved out of the private sector and housing

market it was transferred to the public secretary are that concerns me snl central banks reel in the enormous -- the slatting of liquidity we still have -- this is financial oppress pressing for most people terrible for savers it's not working for asset prices >> it was transferred to other places wework is exhibit amount p we work wouldn't have been a $47 billion-dollar valuation if rates weren't as low as they were for as long and if there weren't the unfunded pensions looking for returns they can't get anymore because of the situation that we've been in with the rapts where they are so i mean it is cyclical and it doesn't end well. and my only point is it probably ends with rates lower than here. we soo that goebelly because central banks had no choice almost everywhere else other than here to take their -- you know, their yields negative. >> the three of you guys think that we haven't hit bottom necessarily or that -- right i mean, tim is that -- >> i would also always like the chance to put a caveat on this

or put context on it. >> okay sfla i think over what we have seen the last three to six months, by the way, by any measure a historic move in bond yields as chris pointed out. but i would say that in the -- so because of that i actually think bond yields were overbought yields too low too fast. if you look at the context of the three to five years next right now it's tough to stop where we are >> let me make two points. when you look at positioning right here be mindful of how crowded the long side of the bond market is tp flows into the tlt at record high right now a lot has to go right from here for the bond bull story to keep working. because everyone is already there. i think the second thing, the bond yields today i think are reflecting or the data today reflects what bond yields have been telling you two years we not economy slowed i think the question is after two years of lower bond yields is that getting stim la active for the economy here you already have a german pmi at 41 what's the worst it goes from

here maybe 38. is that already discounted in stuff like autos and housing and semis, these leading groups? >> germany is as big of a reason why we are at 1.44 on lows the other issue for the bond bears, meaning yields go high are. that's what happens yields go up when bonds sell off is the treasury has to refund enormous amount of u.s. treasury. there are taqle reasons eeshlg on the long end of the curve when you look at u.s. government needs to finance in terms of deficit and the balance sheet and the technicals say that bond yields are going higher. and the question is ultimately, what does that mean for that triple b tranche of credit out there that right now is trading at 1.75 over and that is something the minute is widens it's having huge ramifications sending bond yields lower. >> basically you are worried about the fallen angels effect. >> absolutely. >> right >> absolutely. >> slowing down. >> what are the implications i know you don't think about the -- or you don't think the

bond bull market is over. >> no. >> what is the implication for the safety trades in the markets that have gotten so much love. >> safety trades like utilities for example, listen, i think they go high are we had a guest on. >> even from the environment. >> dan suzuki one of the long tradesy utilitypy i understand valuation is a stretch adding a caveat to tim's i think there is more next week when caterpillar reports wednesday and names like robber and triple m report thursday the deepic sole names see what they say i don't think it's gad and if it's not yields go lower. >> the defensive groups are remarkably crowded here. if they continue to work things really have nog that direction when you look at cyclical green schutts starting to show up with deere breaking out we talked about that this week with you see with semis outperforming software that's a change in the character of the market see it with the chinese consumer

names acting better. if there are cyclical green chutes i would be careful in the long side of the bond market. it's crowd you had as well. >> watch copper. process you look at a chart of copper hg 1 it's trailed -- sorry been totally correlated possibly even led .10-year but i want to see how we trade across europe. base because the bund curve is important. the brexit deal may put dollar pull bulls on the back foot if you think about the dixie basket it's 60% you're owe. and you have a structure the europe, the euro should be rallying here. >>way we haven't touched op the yield curving is steepening .getting so much attention when if inverted i don't recall attention when it's uninverted three-month seer is theed widest 2s appear 10s with comfortably process positive that is that

another sign of the cyclical green shoot going. >> the safety trades, state your name staples be proctor and gamble trading a this is the steepest break outout this stock had and been a ramp. what's it done the last couple years as yields come back? it's rolling over and it's blow that up trend in place i don't think you want to be long proctor and gamble above 120 trade oil at 116 right now trading at 25 times expect the mid-to high single digits earnings growth for that dividend just because you think it's defensive that goes for utilities and might go for reits >> netflix losing team after the earning rally are stranger things in store for the streaming giant we weigh in. and the bombshell report all wall street. the market moving remarks of president trump. vanity fair correspondent behind the big story. joins us ve flirom new york city times square, much in more "fast money" right after this.

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welcome back to "fast money. netflix surging after the close yesterday on an earnings bet but the stock lost a lot of gains today after analysts had more time to digest the skrurk

miss saying it would weigh on the company. hit getting hit by analysts at mcacquire. they say competition is skomg and the company doesn't look cheap compared do streaming peers. does the sputtering after the surge mean the netflix binge is over we were skeptical of the quarter and the stock reaction. >> i think we have done a decent job on netflix might trade up to 317. 15% retracement all-time high, the after market that's exactly where it went last night today it traded i think almost five times normal volume gave up most of the gains. again if you go back and look at giepdens it wasn't particularly strong i know their international subs beat significantly but then you heard for the next quarter. it's not you a inspiring i will like netflix again. but i think it told you everything you need to know in terms of price action. >> up more than 8% yesterday after the bell.

>> remember we did the the chart they did that. the sentiment for. >> you it will me what it means. >> one going this way. the other one going the other way. what i'm saying obviously we had kinz be comcast, at&t all the ones vertically integrated going berserk over the better of the year and since july, netflix has been going the other way. sentiment got weak and the guidance in july was bad when you digest this last night with the stock trading up 8% you say to yourself wow the north american subs weren't great. two quarters in a row. >> right. >> i don't think international it was a great it was a relief. >> sentiment was really bad and short squeeze. this is a horrible close for the stock. horrible trading today. >> it got back to the 285 level before the earnings yesterday. intraday today, reed hayesings letter assurance to the world

abshareholders sharmds, whoever it was wasn't reassuring. his point was look there is a lot of competition but addressable markets is growing everybody knows people are streaming. everybody knows -- i just -- i -- we rewarded netflix in 150u7 2017 and '18 for raising provides and pass them through to consumers do you think they'll be able to do that? i don't think so and i think the stock's performance was absolutely a short cover of epic proportions. >> i agree when you look at the picture this is a chart peaking in relative terms 18 months ago the relative money in the stock was made in the spring of 2018 not in 2019. and then when you look at the action today, dan, you're right. it was awful price action today. on top of that you think okay what are the competitors doing disney up today sharply charter traded well. comcast trading weapon this seems to be a netflix problem. in the chart for 18 months you sell rally until it changes. >> head to the website cnbc.com

we have more "fast money" straighted ahead here is what's coming up next. >> announcer: a bombshell report that's got all wall street talking today. were futures traders reaping billions of dollars by front running the president's market moving remarks we'll talk with vanity fair's william cohan whether the appropriating holds water. and later how options trader bet on coca-cola earnings out tomorrow morning we'll break it down when "fast money" returns but in my mind i'm still 25. that's why i take osteo bi-flex, to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex - now in triple strength plus magnesium.

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that's what snhu is. - you will march from this arena and say to the world.. i did it. - [woman] you did it. i love you. - [graduate] i love you too. we have a news alert on at&t let's get to julia boorstin with the details. >> melissa, elliott management sent its letter to the board of directors of at&t outlining what it calls a compelling value

creation opportunity for at&t. the letter address ds to the company board says the opportunity could lead at&t to at 60 pluses dollar per share value by the enof 2021, representing a 65% upside. today's share price. and the letter says that elliott made the investment in at&t among the largest ever because it says at&t exhibits a unique existential of historical underperformance and depressioned well valuation, well positioned assets and clear path to generate extraordinary values for shareholders and other stakeholders the letter we are looking at right now outlines in time of the fact -- sort of how they have seen long-term underperformance appear what they would like to do to fix it. you see the at&t shares up less than a% in after hours trading >> thank you, julia, from los angeles. this is a farrell. if they resolve this it was a short campaign for at&t. and will we actually see the full value. >> i'm not sure what resolve

means. >> yeah. >> they want to see outsider brought in break up the old boys network in atennessee. i'm a shareholder in at&t. go elliott, as far as i'm concerned the value in the sum of the parts which is something you could have doing since the days are long as they talked about an underperformer. but i think the inherent value and intrin trinsic value in the media fathers and streaming piece ossan the core wireless which is we this the under yoel is attractive. >> so basically, at at&t and elliott are discussing items including a strategic review and board changes and at&t could reach the agreement with elliott as soon as this month according to sources dow jones is reporting. >> balance sheet was a concern, this time last year where everybody talked about the stock was $31. huge concerns in terms of what they were going to do. those seem to have abated a bit. but it's interesting to every elliott who thinks it's going to pr 60 pep westernants nishlted under perform or market perform in the $36 price target. i think there is upside.

>> are you oelt or bernstein guy. >> somewhere in between, tim >> i don't typically like to answer the question. but in this case i find myself in between. >> you are talking about something completely different, is elliott elliott or sanford bernstein. >> truly, nothing going on. >> the look you guys had -- all right. let's move on here no secret that president trump's comments have the ability to move markets perhaps none more so than what he says about trade. but the timing of the statements is far from predictable in some recent market activity has our next guest wondering if something fishy could be going on vanity fair as william cohan published an article tiemgtsed the fantastically profitable mystery of the trump chaos trades in it he highlights three blockbuster trades he says should ring alarm bells for regulators. >> trade number one, on june 28th an investor or group of investors bought 420,000 s&p e-mini contracts minutes before

the market closed. the next day president trump ee merngd from meetings with china's president xi and said trade talks on track the market shod shot up and the trader off with 1.8 billion. trade number two on august 23rd in the last ten minutes of trading a purchase of 386,000 contracts crossed the wire three days later, trump claims he got a call from china to restart trade talks. the s&p shopt up 80 points and the trader made 1.5 billion. trade number three on september 10th, a trader bought 82,000 contracts in the last ten months of trading hours later, china said they would lift tariffs on u.s. goods. the markets popped and the trader walked away with $190 million. >> vantty fair special correspondent william cohan joins us now. >> great to see. >> you great to be here. >> what's the allegation here. >> no allegations. >> no allegations. >> observations.

traders who i talked to who have been doing this for longer than almost i've been alive have been noticing this strange phenomenon that every time trump talks especially when he talks about trade, the market reacts either up or down depending what he says and people put in the trades, you know with a few minutes before the close of trading. it's obviously not just one person it's probably a group of traders or coordinated evidence efforts because the number of e-mini contracts is fo large for one individual traders in the pits at the cme have been noticing this and wondering what's going on. so i'm just being repertoirial i'm hearing this and lay going out there for people to consider >> but embedded in this -- in stringing the facts together. >> sure. >> is the notion that perhaps these traders or group of traders could have been tipped off if they're placing large trades minutes before the market closes on information that has not been disseminated publicly

yet. >> insider trading it's no different. >> okay. >> frankly it's no different -- i was an m and a guy 17 years. if i work on a merger next thing you know you see the stock price goes up up before the announcement which happens all the sta time and the s.e.c. investigates when amazonen buys whole foods and you see the whole foods stock shooting up merger announced s.ec investigates that i'm saying there are regulators here, the s.e.c., the cme, the exchange and the cftc, the futures regulator should be investigating the trades maybe there is nothing there but it sure looks coincidental and sketchy to the people trading the future contracts every day. >> on the surface it does look fishy. >> sketch kry. >> suspicious. >> yes. >> at the same time, i mean, it -- it almost seems like you could cherry pick on given day large trades in decent volumes one of the trades the june 28th trade actually 32% of the day's

volume that was unusual volume. >> that got female's attention. >> but you could go on any other day perhaps and string together a number of other circumstances and say, those are suspicious too. >> look, you know, you could -- you guys are all traders, right. you could do that trading every second of every day. there is always a buyer, always a seller i'm just being reportial people say they notice inconsistenty. people making outsized money and bets with perfect timing and news related to it who actually knows this news about the trump trade talks, the tariff talks, how they're going? not a lot of people. but there seems to be a dissemination of the information somehow just like you know not a lot of people know that amazon wants to buy whole foods but sometimes people get that information and trade on it and the s.e.c. investigates it i guess really what i'm saying here is there is a strange pattern of trading behavior. let's get the regulators looking at it and instead of being flippant and indifferent which

they basically were to me then why not look at it maybe there is nothing but somebody is making allocate of money that's of course assuming they sold and obviously who knows how many people are involved. >> we don't know how the trades closed >> i'm just -- i'm just a reporter like you guys >> how did we come up with the gain amounts though? in other words. >> so. >> you don't know where they got out of the trade how do we know it was a $19.8 become victory. >> fw if you read the article you seep there were skreets periods of time were taken we had to make some assumption about the time period. so you know a week goes by, the s&p is up 80 points. when did they buy the exchange -- the mini at that point divided by the $50 a point times the number of contracts they had. >> and i did read the article my point is i want to you explain it. >> yeah. >> is it through the end of that run in the s&p that you're taking the profit. >> basically, yes until the news cycle changed or the s&p momentum changes

and there is no guarantee obviously that anybody took those profits. they may have held on to them and lost them. >> right. >> bill implicit in this discussion is the idea that the market will perceive the news as you and i perceive the news. but as we know markets perceive news however they choose we sit here and the s&p is at all-time high roughly. yet talks of brexit impeachment china trade. so what i struggle with in the piece and i read it, is the idea that even with the quote inside information as you talk about i'm not sure that would help anyone make an informed trade. and i also struggle with the word profit that you use i think tim touches on this. for a profit the trade must close. and i don't think we have enough evidence to say any of the trades closed. >> no, but hypothetically you're aid traer and if you make a trade and a few days later you sit on $180 million profit, i don't know i might take that i may not.

i may have faith it's going higher but i might take that and be okay with if i'm sittingen oh a 1.5 billion gain i might take that every trade has two sides. somebody who believes for whatever reason the s&p is going up somebody on the other side believes it's not going up but you have to admit in the trump era when we've been talking about the tariff negotiations which seem to be on some sort of roller coaster and nevered ending basis which no one hassed idea of what they're trying to accomplish we know of volatility around the pronouncement whether they go well orp not if you the g 7 i says the talks back on call from china leaders they disavow even people in the white house saying trump conflated several conversations. he even says i was trying to make the market go up. and then george conway, no

slouch obviously he is not a big trump fan. but he is a walk tell lipton partner. he makes the poirnt this is of course it's not technically insider trading. because there there is there are no technical insider trading laws but it's a bunch of judgments. it's something in my view the regulator should look at and not brush off. by the way, i'm just being reportial. tradeners the pits tell me this. >> i think your reporting is fantastic. it's hard to back test this because this is a president that talks about the market more than every other president probably combined but was there a period of time if you look back, for example -- i'm not trying to diet him but president obama in early 2009 i believe said something to the effect i'm par phrasing but the stock market looks cheap here i'm cherry picking now were you able to go back in time and see if anything like this happened before? >> so, i mean the answer is no i

didn't do an explicit text on the history of the market. and by the way, i was a banker okay i wasn't a trader but i've been doing in reporting on wall street now for 15 years. people call me up. they seem credible i validate the credibility they tell me what they're hearing and seeing as experts in those pits and so, no, did i -- they never called me in 2009. they could have or 2010 or 2011 and said you wouldn't believe what i'm seeing. they called me now because they've been watching the vicissitudes of this market go up and down the value at this time of the market goes up and down every time trump opens his mouth about it and they notice the people making the trades timely and well place >> the same people because traders on the flew are have an idea who puts an order in i'm trying it understand. >> i don't know why the pushback here think about it you see a defined period of time. >> what's the pushback.

>> the june 28th was quarter end. that's where i would push back, bill i think the reporting -- quarter end you might have seen a massive rebalancing of a big portfolio. you see all the time on massive trading desks you'll see delta hedging in the last 15 minutes of the trading day which may be balancing off another portfolio. that said these are rarj targeted trades. they're in -- they went both ways weren't always just long some were short. >> right. >> and when you think about the grift charged about the administration you say to yourself, okay maybe there is something to this. and regulatesers should be looking at this. because it seems well timed. >> the sect has a lot of work to do and as one trades i don't want anybody cheating in the market i think everybody feels that i think there is a lot of work to do. >> bill, when i was an intern at the "wall street journal" ages aigt, the one thing i learned sticks to me the to be sure appraise to be sure the caveat in this thing. the as a reporter what would you say that would be in your view

>> you mean to be -- >> well. >> is there one thing where you would say -- you would say, you know what, here is where this story could fall short >> look, the story could fall short when the regulators investigate it when the s.e.c. or the cftc actually spends the time seeing who made the trades, actually has conversations with the people who did it and they say, oh, no, i didn't even -- i was -- i was on vacation i was traveling through arizona. i had no idea that trump was in china. whatever they happen to say. just like if amazon is buying whole foods and whole foods shoots up and somebody whying a million shares, the s.e.c. is going to call them up and say what's going i want to look at trading records. i want to say to see what the broker says. they can do that i can't. so if they do all that and it's perfectly fine, no harm no foul, then fine. it's just an observation that some traders in the pits told me

and i reported on it. >> okay. bill, thank you so much. >> thank you for having zblee me. >> up next well hear from the regulators side of the story a former soek lawyer joins us ni f what he thinks of the vatyair report stick with us. "fast money" will be right back. whether your beauty routine is 3 steps...

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welcome back to "fast money. before the breck you heard from the author of vantty fair bottom shl report opinionle many of the trades ahead of the market moving comments of trump our guest is plugged in listen to the conversation. let's bring in jacob frankyl former seen yerp enforcement lawyer for the s.e.c he used as a criminal the prosecutor of corruption and financial crimes bill cohan is also still with us just to add to the mix here. jacob, do you think these trades should be investigated is there enough to go on >> yes there is enough to investigate. i think the only thing that could be misleading was the headline itself. the waybill summarized the story was accurate that is is that for there to be insider trading investigation interests there is a nominalist trading in advance of announcement that announcement cause as sudden price movement up or

down and oft be particularly in the equities markets, you know, the regulators tend to find that there may have been people who actually were in in possession of material not public information. and traded on that and anomalous trade something the reason you investigate that's the obligation of the investigator as bill said in his segment a few minutes ago. he wasn't saying there was -- that there was a violation but there are grounds to investigate. i would agree with that. and to me it's not just the regulators who should investigate. the other proper party to investigate are the firms for which the traders work in that unlikely event that there actually was a problem here, one of the things that's always stress tested is a firm's compliance system. and so there should be at least on some level a mini internal investigation in each of the terms to determine whether there was anything anomalous that gave rise to the raids. >> the bar in terms of opening investigation and the bar of actually finding wrong doing,

they're completely different though, jacob i would assume i would assume the bar to prove that something was actually a crime was committed is much more difficult than simply opening the investigation. what's your take on based on the information we have now how a case would unfold. >> well most of the time, you know, you actually have investigations that open based on some generalized information that in and of itself may not be the foundation or may not be sufficient to establish a violation. obviously with whistle-blower programs, regulators are getting access to much more and better quality information that often let's them be further along in that -- that that investigative process. but to get to the end game, if we are talking about a civil case, you still need to -- you know, you still intoed to prove recklessness, prove some element of intent. you know, we're not talking about equities here. i mean a lot of trading on the -- when we talk about

futures trading, the classical they ares of insider trading would apply in the equities markets do not apply it's more thes miss arpz theory somebody had a daut it was a breech of the duty the person trading knew about the duty and ininherited the duty to keep the information confidential and trade to do i think the bar here to bring a civil case is very high. but, again, a lot of investigations open, are pursued and closed i think that's ultimately what happens here if there is an investigation by the regulators. >> so i'm sorry, jacob let me just get in straight. process this sort of investigation a case would be built wouldn't be insider trading there wouldn't necessarily have to be insidered? terms of disseminating the information to the trader or group of traders. >> in the classical sense that we think about using the -- using the whole foods example with amazon, you know, the that

bill used before, that scenario would not apply in the futures markets. but the misappropriation theory. the fundamental concept is was there fraud in connection with the trading. that's the simple way to look at it that's how the cftc is looking at cases post dodd-frank establishing the insider trading rule that talked about fraud and deception. it wasn't the classical insider trading looking on the equities side yes, it's not the classic corporate insider. but if we look at cases that involve political insiders, obviously if for some reason in the course of investigation that someone was able to find that an adviser to a senior government official who knew that these announcements were going to be made and that person picked up the phone and called somebody and that person knew about the duty, yeah, that's a game changer. but it's unlikely that that's

what we're going to find but that's really what would need to be found for there to actually be a case >> bill, it sounds like if they were able to make that link that would be at a whole other story for you. >> it would be that would be a blockbuster that would get people on the street talking. look, i appreciate what jacob said very much and i've always frankly wondered, you know -- i know the insider trading laws apply to equity markets but obviously as we have seen there is a ton of money that could be made on whatever it is misappropriating money in the futures market same with bond market. the bond market is four times the size of the stock market we know there is a lot of information conveyed in the bond market and for some reason that's outside insider trading laws too i've never understood why insider trading laws such as they are exist only to -- in the equities market. they should apply obviously to the bond market and the futures market because information is valuable and is obviously key to making

huge amounts of money or losing money. >> jacob last word and i'll put that question directly to you. do you think those insider trading laws should apply to the other markets out there aside from the equities markets. >> well the answer is they actually do apply. and the cftc in 2015 brought the first insider trading case involving a oil trader another one in 2016. the cftc was clearly expand that to tip or tippee liability but it's more about the theory of the fraud, the theory of the insider trading that is different when we talk about the futures markets. and i think there is a framework that does apply. but i think to look at fundamental nature of both markets, equities versus futures and really see -- identify and accept how they differ from efundamentally and that's establishing the basis for determining whether you would or would for the have insider trading. but here ultimately i think the only thing really misleading was the headline to sort of create the fire storm, i don't think this

actually rises to a level we find a duty -- breach of a duty under the misappropriation theory resulting in a case. >> reef it there fascinating discussion, thank you both, jacob friending friendingle and thanks to bill cohan. big bets on software lay out the top stock picks omfr the brightest minds as this year's zone conference. stay with us we will be right back.

up next, coca-cola earnings on deck and options traders betting the soda giant will pop on the results umbrella break down the action when "fast money" returns. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis.

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welcome back to "fast money. consumer giant coca-cola reports earnings before the bell tomorrow the beverage behemoth has seen refreshing gains in year when the market gets a taste of tomorrow rules options traders bet coke could physician higher dan is here to crack open the action. >> yeah, here what we do is look at the at the money stralt straddle a cooling in, sr. 54. about 2.8% of the stock price. one-day implied move for coke after earnings tomorrow morning. call volume is 1.5 times that of puts a little greater than expected on average, the stock moved 4.5% the last four quarter bes. a big move interesting enoughly mel said about the punning a gains. actually underperforming the market right now down about 4% from the recent highs. look at the chart. that's the one-ier had a nice ramp this year

but again like proctor, below that up trend sorry to step on the toes big guy below the up trend this interesting if we roll in stapings that that's going to 51 that's the 200 day moving ank breakout earlier this year. >> you have a storied past when it coca-cola. >> i've been arguing with dan about coca-cola a long time i think i've been right. what changed about coca-cola in the last two years that allowed it to rerate maybe underperforming a bit. but certainly a moment where it was the stock that never grew the top line they structured the company. gotten boltsers in sword order process you think vitamin drinks the new way people consume athletic drinks and nutrition drinks and koobl will not at the center are you kidding me this is a global brand it should trade a high multiple and it's a global company. i stay long. >> what do you say about the charting. >> dan has it right here. >> wow >> we have seen a 4, 5% crawdown in stock

i think another 5 to go. 51 and change is a timely long but not there yet. it's a good long-term. >> i'm good over here. >> you guys want to high five over there that's -- >> i think there is work to do. >> it's expensive. 24 times forward earnings with an 8% eps groepgt, as dan would say knock yourself out. >> starbucks, what do you think for everyone unof the iconic brands. >> i think six months aigt you liked it for the cbd opportunity. >> they're not in cdbd. >> thanks for the action full showriy, fda tomorrow, 5:30 p.m. eastern. up next, final trades. ♪ ♪ ♪

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welcome back i'm eamon javers at the white house where we have a significant reversal from the white house. a statement from mick mulvaney once again the media decided to misconstrue comments to advance a witch hunt let me be clear there was no quid pro quo between any ukrainian and military aid and the 2016 election.

this is the chief of staff walking back a statement he made earlier today in the press briefing room suggesting exactly that melissa, back to you. >> eamon, thank thank you. >> that does it for us here on fast back here tomorrow at 5:00 for more in the meantime "mad money" with jim cramer starts right now. >> my mission is simple. invests there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job is not just to entertain you, but to educate and teach you, so call me at 1-800-743-cnbc or tweet me @jimcramer. if there is one word, one word that defines this earnings season so far, it's nabaf!