dow's lackluster return because of boeing. >> it was quiet and steady and the market is getting more comfortable with the laggard groups can work. we want to see the results which are so far benign. >> that does it for today. thanks for watching "closing bell." >> "fast money" begins right now. >> life on the nasdaq market site, this is "fast money. i'm melissa lee. tonight on "fast" the pressure mounting on boeing as the stock takes another leg lower. we'll break down what is next for this company in crisis plus a slew of underwriters pedaling positive initiations on peloton today. is the stock facing a major uphill climb and one of wall street's biggest bulls says we're on the brink of a big breakout tony dwyer has three reasons why we are headed back to new all-time highs we begin with breaking news,

sources telling cnbc softbank is coming to the rescue and will take control of the company. josh lipton has all the details. >> melissa, that's right a new dramatic twist in wework story here cnbc is now reporting that softbank is in advanced talks to take control of wework, that's what sources are telling cnbc's own david faber, a deal could be announced as soon as tomorrow. it is softbank led by japanese billionaire masa-san taking control here, after the move softbank would control nearly 80% of wework, prior to the takeover, softbank already invested nearly $11 billion in the company. softbank economic marcello clarette will be involved in the company's management, former ceo adam newman's stake will fall to low double digits. last month wework terminated plans to go public the prospectus revealed a huge $900 million loss in the first six months of 2019

corporate governance practices also causing concern >> thank you, josh lipton in san francisco with the latest on wework talk about a down round for the last fund raised $47 billion valuation to what could be as much as $8.5 billion >> so high single digits wehaven't seen this mark down in an equity valuation in a very long time especially from valuation heights like this. we have seen this in other cycles we can go back and remember amazon lost 85% of its value from 2000 highs to 2002 lows and they lost 65% into the 2009 lows it's important to remember there are other things going on similar to this. some of the other unicorns, doordash, post base, the delivery guys, people talk about the bubbles there. there is a public comp. called grubhub lost 60% of its value in the last year. these are really important situations to keep your eye on it tells you both in public and private markets what investors are willing to pay for growth. >> you used a good word, cycle i'm not sure where we are in the cycle for ipos and how investors

are looking at the story stocks but we are not where we were if ub her er had to come out and think about the pressure on that ceo and the governance issues there, it's a totally different world. the question is, do you look this as a softbank vision problem or a problem for a lot of people at a time when markets are not paying attention to risk right now? i think it's broader than just masa-san vision fund made a lot of people look good for a long time that didn't have much there >> it's probably the latter. you talk about valuation, it has been the ipo market taken higher, large cap tech or tech that doesn't have any earnings so if that's going to be the case, we're not going to see these things rally, where does the market go? but being in eye shot of all-time highs i don't know if we should worry about this as much as we should have worried about it in the past >> i think there is, one ftd things i said the reason why we talk about wework all the time, not because it's particularly interesting because i don't

particularly think that it is but what does it mean potentially for the broader market softbank some of the greatest investment minds on the planet invested a significant amount of money at a $48 billion valuation. i don't know why that is and maybe the right valuation is the current valuation but the dance point down 80%, that is a significant move it's sort of glossed over, because it's not the s&p 500, but who is to say people aren't making the same mistakes in the broader market, as they are in wework >> it's not just softbank. think about the fidelity, for instance, which invested in these early stage ventures when you find out the damper has no closer when it comes to the smartest minds in the room, then you're really questioning a lot of things. >> there's another, listen, you could also say who is invested in the vision fund, sovereign wealth funds and big pension funds, organizations that are also invested in the public markets. i don't think in my career in any of our careers that we could remember where private equity is marked down so dramatically so when you think about that if

you're pension fund and the time of it being back at the levels of $40 billion plus it's years and years, if it ever happens you think about okay what else do i have to think about in my portfolio. >> this is a developing story we'll bring you other headlines as they cross. to the other big story of the da i, boeing falling again as troubles mount for the company following the grounding of its 737 max planes phil lebeau is in chicago with the details. >> melissa, boeing just announced within the last couple of minutes it approved its regular quarterly dividend, that is $2.055. is there an issue with liquidity down the road for the guys hasn't stopped them from approving the same quarterly dividend in the past today we did see a number of analyst notes regarding the documents that came out that were leaked out of capitol hill on friday regarding a technical pilot in 2016, his instant messages and emails regarding

the 737 max flight simulators. in those analyst notes, guys, we saw three downgrades, and as those downgrades came out, and there were a lot of analysts who said stay to the side the price target came down more than $100 but the consensus is still $412, still well above where the stock is trading right now all of the notes center around this one question, will production drop for the 737 max? when you look at that production, remember, they're at 42 per month right now the company has told their suppliers they expect to get certification and then ramp up to 52 per month in february, then go to 57 per month by june, then dennis muhlenberg with an employee email saying the company is making steady progress on the return to sever for the 737 max. the company is still targeting to have that certification at least by one of the major regulatory agencies around the world by the end of this year. you take a look at shares of boeing, that is an ugly looking chart over the last couple of

days keep this in mind, guys, we'll learn more on wednesday during the analyst call, the first time we hear from dennis muhlenberg in terms of a q&a situation with analysts and get a better read on where he sees the progress of the company as well as the 737 max. >> all right, phil, thank you. phil lebeau in chicago with the latest on boeing tim you're a shareholder what do you make of the past two days >> here is the issue the free cash flow hit is something people should be concerned about. what we talked about the company if for the last 18 months that lead it to its peak was all about three cash flow. at its peak in terms of forward-looking basis, almost 24 bucks a share in free cash flow. ubs downgraded 29 cash flow by 3.5 billion, downgraded 2020 by 5 billion. if you listen to the analysts maybe they got more relaxed were flexible when the max production would restart, most guys were october/november if you read these guys in the beginning of

the summer they've been sneaking it in to like january, but now they have to address this and there's no question i think the faa has to slow it down if to no other reason until they find out more about this that puts back some of the free cash numbers more. >> i said on friday, how is this stock positive year to date? we talked about this, if it was any other stock it should have been cut in half i feel people are saying they'll always be around >> we saw back in march the decline of 18%, start in july decline of 16% this was 14 rapidly but still positive year to date. it's mind boggling to me >> is that a good sign or a bad sign >> a good sign because it's telling you there's a duopoly in this segment no matter where we go, you got to be someplace, one of the two. sfwli >> i was talking to carter copeland on "power lynch" a $500 price target on boeing stock still.

with all this stuff happening, muhlenberg going to the hill, et cetera, he said at the end of the day it's a duopoly people have nowhere else to go life is good if you're in a duopolyp certainly is. that's the reason he kept with the $500 price target. >> facebook, for everybody that wants one of the things i'd love to hate but you can't because it lives by itself sort of in this world. boeing to a certain extent as well i understand what steve is saying but it's down from $446 >> in january. >> yeah, january/february, that's a significant move to the downside and maybe bolstered by the fact the s&p 500, all-time high how do you trade the stock here? i think we've been pretty consistent the december lows are in place, and that low i think on the 19th was right around $305, and we've said this, why in this environment especially given those headlines on friday about these instant messages, why pile in ahead of earnings i don't see your edge at this point. >> listen, that's just a point in time, december 305.

who knows? what i see from an earnings standpoint is analysts took out what they were expecting 10% earnings growth for 2019 and basically slashed it down 80% and moved it to 2020 and 2021. when you talk about this duopoly they don't have to buy the 737 max. to me this is going to get messy for a while. i expect the ceo will not be the ceo by the end of this year and a long period of time regulatory issues, finds, mes, mismanageme, the company will be cautious on guidance i'd said that consistently since the sad incident it's important to remember 346 people died in two crashes and that's what it took to ground two planes >> on the 12:30 conference call you said today guy, are there any incidents in history comparable to what was going on in boeing. that was a good question

>> really? >> for once you had a good point. exxon valdez i thought of wells fargo >> they screwed the entire thing up for two years >> and the stock has underperformed its sector over that same time period but this cultural issues, what people thought were cultural issues and so they had a regulator breathing down their neck, the fed putting growth caps on them, which is effectively what the faa can do in terms of the resecertification process. is that a bad comparison >> i flattened out a few weeks ago. i was ready to jump back into the position last week my view was this is a company that around 350 i wanted to own and what's different about this and so all those scenarios you just discussed, you basically have the issue with a regulator. this is even more acute with a regulator. obviously exxon and bp had to deal with a lot of different

functions and it was really more about liability in terms of measuring the damage, and even though they did some horrible things to the earth, i think people were trying to put a dollar number. it's very difficult to put a dollar number on this. the sense is that boeing and the faa always had a very respectful relationship and if you feel like that's been tarnished in a way it's never been before, this will be a bigger problem for the company than we've ever seen coming up, drug makers rally on an opioid case settlement, what that means for the drug space. tony dwyer says the market's new all-time high is under way he'll reveal what's going there. much more "fast money" right after this with portfolio managers focused on the long term. who look beyond the spreadsheets to understand companies, from breakroom to boardroom. who know the only way to get a 360 view is to go around the world to get it. can i rely on deep research

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welcome back four drug companies reaching a major settlement over the opioid crieses. meg is in cleveland with the latest >> reporter: that settlement news this morning has been quickly eclipsed by bigger potential settlement news. when we got here it was to cover the first federal trial over the opioid crisis settled minutes before it began with the four drug companies involved. then this afternoon news came out a potential broader settlement involving those companies and johnson & johnson

might have potentially been reached. four state attorneys general are leading the negotiations on a potential broader settlement held a conference call this afternoon, and said that they reached a framework with the companies, it includes $18 billion in cash paid by the three drug distributors, mckeson, ameri source and $4 billion in cash from johnson & johnson and $23 billion worth of medication assisted treatment drugs from teva as well as some cash about $250 million potentially over ten years there is a wrinkle, though the plaintiff cities and counties involved in thousands of these cases are not necessarily on board with this framework. we heard that from the attorneys representing them this afternoon, and not all state attorneys general are on board either the ohio attorney general dave yost saying in a statement "this isn't a framework. it's a pile of lumber dropped on the construction site. ohio will wait and see what the detailed plan looks like." this is still very much in flux right now, guys and of course

these five companies are not the only defendants involved in the thousands of cases more than a dozen have been named in the cases and could potentially be involved in a broader settlement at some point and guys, we talked with the plaintiffs co-lead attorney joe rice after the proceedings this morning. he told us there could be more potential defendants named here, beyond the dozen we know about, more companies could be brought into the fray so it is far from over >> meg, in terms of the state ags, how many state ags would have to approve this deal in order for it to be a global settlement >> that's not clear, among the many questions that were asked of those four state attorneys general, and how many of the cities and counties might need to be on board as well right now there is certainly no agreement that we've heard about. >> so effectively if everybody came on board we'd be looking at a total sum for all of these companies in the 20s, billions of dollars for states, counties,

municipalities, and -- for everybody, basically, and that's it >> reporter: that's right, but that's only five of these companies, so you have other potential companies including pharmacies, other drug companies that could potentially be brought in as well for these five, yes, you're looking at about $22 billion in cash, and then about $23 billion more in drugs. >> okay, meg, thank you. meg tirrell joins us from cleveland, ohio, where the federal trial was scheduled to start this morning it seems like a pal tree some at the end of the day for the drug companies which is good for shareholders >> i get the sense the settlements are not the end. i realize a settlement is a settlement, but i think the numbers being thrown around here, if j&j who doesn't like to settle ever, and usually is the guy an entity that is standing in there and fighting 'til the end, except for the fact as you hear about hey we'll trade 4 billion in exchange for 50 billion in opioid cases up against, we also think the pr around settlement may be very

good for us, this is the kind of thing that you start to do the calculus on, except for the fact that we have' only heard from five states and i think this is a case where we'll see much bigger numbers it's a very emotional public issue. >> teva down 47% year-to-date, off of the news it popped 15% today. it's coming from a low base. i'm not saying the sky is clear but if you're going to play this for some sort of a news event, maybe you play it through options or maybe you buy the equity but it is a very expensive option, but it's priced as if it's going out of business >> well the equity is distressed this is an $8 billion market cap, got 30 billion in debt, only 2 billion in cash and if you look at the earnings and their sales, they've been declining every year for the last few years so this is a difficult situation. i think johnson & johnson to absorb this sort of thing is better you make a good point. for these guys saying here is our framework and johnson oo ss johnson never settles.

>> j&j is fighting a battle on two fronts, not even talking about -- >> how about three >> a list of drugs >> it's not just >> how about the political pressure on the sector, too. it's not as if -- i like j&j i can't say i go in and buy more of it here but i do think it's something that is held up actually remarkably well relative to all this pressure. >> j&j, probably said 121 is the level it trades down there getting back to abc, cardinal health, mckesson issued a statement, hoping obviously this settlement in ohio leads to a framework but to tim's point, hope is not an investment thesis that stock mckesson has gone from 130 to 152 pretty much in a straight line. evaluation makes sense they report i believe at the end of the month you have yourself where is the next level to get in mckesson might be one of the most interesting ones here, 141 makes sense for a lot of reasons, $2.5, $3 from where we

are. >> read more about the settlement on our website cnbc.com we have much more ahead on "fast money. here's what's coming up next >> break out your rally caps, because one of wall street's biggest bulls says we're headed back to all-time highs he'll lay out three factors that will get us there. and later, pedaling pass activity wall street analysts going bullish on peloton, but the stock has a big uphill ride. 'll explain, when "fast money" returns. your family is duckin' and rollin'... while we stowin' and goin' but that's cool, i know for a fact your suv does not suck. and why is that? it aint got that vacuum in the back, whoo! sucking stuff up! what else are we gonna find? we got to go. vacuum in the back, hallelujah! get 0% financing for 60 months plus $2,250 total bonus cash on the 2019 chrysler pacifica. ♪

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tony dwyer good to see you.. >> thanks for having me, mel >> what brings us higher >> the guys and gals printing the money told you they're going to print more money. ultimately the term don't fight the fed comes from the fact we always come up with the great reasons of why it's right or wrong, good or bad the guys printing the money told you they'd keep printing the money and that means an offensive playbook how do you know the pivot point, mel? for me it's when the ten-year note yields makes a low, defense to offense, happens september 3rd, got retested a couple weeks ago and moving higher, trannies, small caps, offense is playing >> for a while when rates looked like they were low, whatever, a lot of bullish strategists say that's good for valuations here you are saying once thetive odd happens in the ten-year yield and it goes higher that's a good thing for stocks. is there sort of i don't know a

golden area in which you don't want it to be too high, not too low? >> it's more direction than trying to pick a "level. i don't think levels are as important as they used to, except when they hit extremes. is 1.5% the level? you broke it three times by a little bit, so you could look back and say maybe it's anything below 1.5% but again, the pivot psychology that happens, everybody got on to the defensive side of the boat >> it's the psychology not necessarily the actual -- >> its a a human nature game we try to put numbers on our whole bull story for 2019 as you know was wrapped around weaker economic growth that got the fed engaged enough to make the long and realize they'll restimulate growth what are you seeing in the market pmis globally, an inflection point off historically weak levels a lot of economic data, three things the fed easing, the central bank's globally are flowing money at the whole thing and forget about whether it's good or bad.

it is what it is the second thing is you get an inflection point in the global manufacturing and you've got a demographic a monster demographic tailwind with the millenials peak birth year turning 30 i went to a niece's wedding, she got married two weeks ago and she had nine gals in her wedding party and they're all going at each other's weddings and starting families and doing what you do like i did when i turned 30, start a family, start spending money >> buy a house >> you buy a house, ten years of income verification at 30 years old. they just cut rates in half, and they're still giving us money. you're in a recession in the consumer, when they cut rates and they're not going to give you money, it doesn't matter >> i thought they didn't buy houses and care about material stuff. >> i was a millenial 54-year-old millenial. all i wanted was experience when i was in new york city >> using the "r" recoword recesn you nailed 18 months to 24 months, once the yield curve

inverts as your time line to still be buying the market >> correct >> where are you on recession? the fed you talk about the party is all in the fed's pocket, they have limited bullets, right? they can't do as much as you're hoping for them to do in the markets. >> the interest yield just got in half. everybody i know that can is re-fiing everybody that wants to buy a house got a cheaper mortgage you're actually having a simulative turn coming from all of this weakness and again, you know, people are so sick of me talking about the third mini recession of the cycle we're in a manufacturing recession. people are looking for what we already found. we're in a mini recession. now we're coming out of it, because rates dropped so much. you only know that because the ten-year has turned and that's the sign you're stimulating growth >> let's talk s&p 500 for a second >> sure. >> i think about q1 earnings cycle into april, the stock

market made a new july time high and came in 7% from the start, and we go into q2 earnings cycle in late july, same thing, new high in the s&p 500, 6.5% decline. we'll make a new high, you told us that, just a percent or so away from that but we're going to be in that last week of the q3 earnings cycle. why is it different this time? >> again, because the expectations are now finally, dan, beginning to come down. so here is a mythbuster we did at canaccord we looked at out year estimates. the out year estimates the argument is still have to come down we found in years this cycle and before when the out year estimate was reduced aggressively, guess what valuations expanded and market went up. the two of the three negative years this cycle happened when the out year estimates were actually revised upward, 2011 and 2018 this is all about the money printing again, this never ends well. you cannot fix debt with exponentially more debt.

it's not going to go good. the dwyer doomsday clock happened, the 210 curve inverted now you watch the credit metrics to figure out when it's imminent corporate credit is booming. household debt service ratio historically low, delinquency rates at cycle low >> the year-end price good for next year is 3350, this year only 295, right now we're above that in terms of what sectors bring us to 3350 you're going offensive. >> you got to go offensive forget my opinion. go with the history of what happens when you bottom the ten-year, financials, industrials, consumer discretionary and cyclical tech lead, in both cases, so in both cases coming out of the i had know recessions in 2012 and 2016 you're up roughly 20%. when you made that low in the treasury yield so the low in the market happened, market rallied 20%, treasury yields made its low, went up an additional 30% plus led by offense. so i'm not going to chase the

target higher. it's silly in two months to try to put a valuation on it but i'm focused on 33.50 and i think it's front-end loaded and if that's right, i'm very conservative for next year >> all right, tony, good to see you, thank you, tony dwyer canafford ingenuity. there are two names that could be coming along for the ride, whose run may be done. carter breaks down the plays >> two good ones, two bad ones have earnings this week. let's look at it together. what is conventional buy a big word in the sense that convention general lay greed upon, everyone knows that a stock at well defined tops has the potential to break out could be nike, could be jpmor n jpmorgan here are two, verizon and vf corp., nothing to do with one another but it's not what they do, it's the setup the weakened of the market, heretofore strong stocks, paypal

has nothing to do with roper but they're virtually identical. we'll start with those two a comparative chart, a one-year chart, literally a perfect overlay. this is $120 billion payment processor, this is a $35 billion global industrial, and it is a virtual perfect overlay. they are both bullish to bearish reversals. you can call it head and shoulders top. you can say paypal broke its trend line, but either way, that's not typically a good setup. now hold that in your mind's eye and look at the next one it's identical i'm not drawing the lines. the lines draw themselves. it's the same setup. they have nothing to do with one another. that's the point of charting in many ways, trying to suspend one's knowledge or purported knowledge and just go with the facts. vf corp., big apparel name, $37 billion brands that you know,

like vans and timberland, north face are these well defined tops at a common level as it works in the apex, is it just now breaking out after two years in a range, it is. does this have anything-to-do with one of the biggest telecommunications in the world, verizon, it's identical. that's the point, why more and more money goes to algorithms to passive investing because it doesn't really matter sometimes what the darned thing does these two look as though they'll continue to break out, the other two look as though they'll continue to roll over. >> carter, thanks. carter braxton worth >> where can we see more of carter, mel? >> on "fast money" or "options action." >> love him. genius coming up an analyst put a price target on apple. we'll break down what could be behind the next big apple rally and the big week ahead for mark zuckerberg, as he gears up for another appearance on the hill much more "fast money" right after this

this is the age of expression. but shouldn't somebody be listening? so. let's talk. we're built for hearing what's important to you, one to one. edward jones. it's time for investing to feel individual.

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upside i feel like everybody's finally moved to the other side of the boat >> that's been part of the move here, right? i don't think going into this refresh there was any expectation, so when you actually heard about slightly lower prices, you got a sense shipments could be a little bit better, people have woven in their 5g into next year, but i think the only way you can do this, i'm long apple and pretty bullish here is by the multiple. that's how analysts play with numbers and make it go higher if you believe that the blended multiple takes you to somewhere 18, 19 times where at 12 times historically starting to say apple is expensive. with the capital markets activity they can throw at you and the dividend and the ability to continue to execute on buy-backs i think they get there. >> part of this call was the lower price launched at the beginning of next year a bridge to the 5g cycle which could last two years instead of one year according to raymond james >> i think everyone threw out hardware, everyone thought it would be a services game when you enter back in and say

hardware is going to be something, it's going to move the needle >> tailwind. >> now it's a tailwind you have to remember technicals. 233 was resistance that becomes support, breaks down below that, exit the trade, and it is overbought on an rsi right now, relative strength index. wait to get back in or buy more if you're still long apple >> 280 left becomes the math problem, giving a 22 forward multiple off next year's $12.75 or so apple expected to earn, so you could understand where the number is coming from if that's the right multiple who is to say? the 232 level that was a previous high and blew through they have something to trade against. they report on the 30th. market seems to be okay, maybe it levitates into the earnings >> if you're buying the stock at all-time highs, after trading 70%. because of the 5g cycle, let me tell you, people, people are not

in this country going to be upgrading their iphones that they just spent $1,000 or $1200 for a 5g phone >> they're already on the market in other places. >> the networks don't really are not ready for it >> the whole bullish thing, dan, people lower their estimates so far on hardware. >> >> largest trillion-dollar stock in the world we avoided that as a newsday it was actually pleasant >> last year at this time it had a trillion-dollar market company and by january 2nd it had below a $700 million market cap. >> that's my point we shot well through the trillion dollar level. >> thinking fresh 2020 cycles, have at is it. >> i'm not we can do this all over again but probably time for a commercial >> they'd have a ball. >> knock yourself out. >> that's in third place from one tech giant to another it's a big week for mark zuck

zuckerberg, he is headed to capitol hill to testify before congress julia boorstin has what we can expect >> mark zuckerberg is looking to get his message out there ahead of his testimony on wednesday before the house financial services committee he spoke to nbc's lester holt in an exclusive interview >> i get a lot of people are angry at us. part of growing up for me has just been realizing that it is more important to be understood than it is to be liked, and i believe it very strongly, and i do think that people can make up their own minds about me or the work that we're doing, but this is who i am. >> coming up on wednesday, he'll be questioned about facebook's push to create cryptocurrency libra, high-profile backers recently dropped out of libra, the treasury warning it could be a tool for money launderers and terrorists and there are privacy and anti-trust concerns about the cryptocurrency ahead of the testimony wednesday

facebook unveiling its latest in its work to protect elections including labeling posts they deem false on facebook and instagram as misinformation. mayor pete buttigieg's campaign confirmed zuckerberg and his wife priscilla chan recommended staffers to the buttigieg campaign zuckerberg's spokesperson saying that they haven't decided who to back yet in this presidential election melissa? >> in los angeles, apparently pete buttigi pete buttigieg they were at harvard at the same time >> no kidding. were you there with him? >> no. >> you predated them >> it was pete's idea for facebook it wasn't thewinklevosses. >> now he's making things up what to expect here? >> this is a stock you were penning op-eds last year >> yes, bleeding edge. >> this could be a front from the perspective of getting in front of regulatory service

things, earnings are expected to rise 1% this year so they're gone, okay, but this is one of the most toxic stories we talked about boeing we talked about johns son amson johns johnson. i have teenage girls, more concerned with what goes on their platform than i am with drugs and alcohol, and cigarettes and stuff like that it's a toxic product, this is going to be something that our generation is going to face right now and how we deal with it and so to me, i was reasonably constructive last year dealing with all this stuff. i think this is going to get worse. i think 2020 will abe disaster for them he's not the right guy to steward them i think this is a huge story >> it's not zuckerberg's role at least i don't think it's his role to decide on what is going on you could take malicious, you could take hate and all that off but it's not his job to police facebook >> i think it is >> it's too difficult to do. >> i think it is what we're learning and 2.0 or 3.0 of social media, it is their

responsibility and we're getting to a place where not only is the trust and the privacy and there's multiple layers of that but from a regulatory perspective we can believe in free sxeepeech and expression ad not having stuff on our sites. i think some is figuring it out and the more important part i don't think they know how to value their company or the cost of doing that, the cost literally and the cost of their viewers. >> my point is different from all that, it's equally as important. advertisers leave platformsor leave products all the time. this is going to be the issue of our generation from an addiction standpoint let me tell you something, they left the cigarettes and left the vaping and they left this other stuff. it's going to happen to these guys i'm telling you that >> have at it, dan but into october 30th -- >> the stock stalled for the last few months, hasn't made a new high in a long time. we've been saying this, until users and advertisers leave, but

they may haven't done that yet. >> it's a decent stock to trade you would agree. the moves have been interesting. technically it's done everything right. i said for a while i want in my heart to hate everything about it, but in terms of the stock, in earnings on the 30th, it pains me to say to your point, people aren't getting rid of their facebook pages, and advertisers aren't leaving, because they have no place to go, so i think it sets up well in earnings next week or whenever october 30th is up next it's mystery track time, options traders are betting on a bigger bounce when it reports results plus analysts initiating coverage on peloton, following one curious pattern that ergmeed with recent ipos

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welcome back to "fast money. we have a slew of earnings on deck one big name gearing up to report tomorrow is procter & gamble the heavyweight is on pace for its best year since 1997 a big run cooled off this week managing director of xp investments breaks down the options action welcome back, bono take it abe. >> thanks, melissa

taking a look at the weekly options, you can see the at the money is implying a 4% move in line with what we've seen over the last two years so options are pretty fairly priced let's talk a deeper dive now this sticks out to me. if you look at call and put volume for the month you can see that calls outstrip puts 2 1/2 to 3 times to one, that's significant. seems like there's bullish sentiment coming in to earnings here which is interesting, because taking a look at this next chart, you can see that there is a long-term up-trend here i want to focus on this place right here, we're kind of testing the lower bound of that up trend it will be interesting to see whether we hold trend and bounce or if the stock rolls over and sells off. two things that come to mind, a couple ways to play this if you compare procter & gamble to the xlp, the consumer staple

etf of which p&g is 16%, you can see focusing again right here, this spread, sorry my drawing skills aren't working today, this spread here is at pretty significant statistical highs. xlp looks cheap versus pg. taking that a step further, skew for pg, procter & gamble's skew is cheap why is this actionable there's a couple ways i like to play it. selling put spreads or selling 1x2 put spreads. in other case you sell at the money or there about put and buy one in the case of buy one or two downside puts. both situation also protect you if that stock does roll over, and the 1x2 you realize profitability if that stock continues to sell off. now to add another player to this, i also like overlaying either one of those strategies with the sell of an upside call and i typically do not like

recommending the sale of calls but i'm comfortable here and i'll tell you why. the options are implying a 4% move if you sell that 6% or 7% out of the money call with the proceeds you take in from that package, if the event they make an aggressive move to the upside, you will get called out of that stock at all-time highs. now, keep in mind that pg is trading at 27 times price to earnings compare that to xlp, 21 times, walmart, coke, pepsi, 24, 25 times. so again, in the event, and that's if you do get called out of that stock, you can take those proceeds and rotate into other defensive secure counter cyclical names that still give thaw safety in your portfolio. that's how i'm looking to play pg >> thank you tune in the full show this friday 5:30 p.m. eastern time. up next the one wall street analyst that might have signed, sealed and delivered a bottom for fedex. we'll explain. look at the kramer cam, jim

talking with the ceo of stock x. that coming up at the top of the hour on "mad money." much more "fast money" still eaahd. ♪ ♪♪ ♪♪ ♪♪ ♪

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welcome back to "fast money. if your he a loyal "fast money" fan, we covered the downgrade of fedex, saying the bowl thesis has been shredded. take a listen. >> shredded, dead money, not working, spending unchecked, downgrading, just a few of the scathing words bernstein had for fedex and you expect that to tank the stock but you'd be wrong. fedex hung in there under a barrage of pessimism >> and it's hung in since climbing nearly 10% since that call so what does this mean for the stock? was that the bottom? guy? >> they rang the bell and we alluded to it that day after you went on your rant, diatribe which was fantastic but doesn't mean they're wrong their timing was miserable this is a great bounce you've seen bounces like this

before in fedex. at a certain point you fade it i don't think it's right here but there will be an opportunity around the 160 level to sell this sucker when it. >> seasonablity i said this a couple weeks ago, november is the best month for fedex, december is the worst month. so you do have some, just specifically for that 30-day range, you can't find in the last five-year average any year that was negative for november for fedex. i think you're okay staying long analysts initiating coverage on peloton buy or outperform rating, it's a pattern playing out with a number of other recent ipos. look at uber, smile direct club, beyond meat, zoom went public this year. their lead underwriters are often firms initiating with bullish coverage on the stock and the same bullish calls diverge from the stock's performance since they went public, uber smile direct or peloton have plunged and beyond meat and zoom fallen off their

highs. are underwriters too bullish what does that mean for investors looking into the names in i feel we should play the more you know kind of thing. this is sort of what you suspect goes on, on wall street anyway >> let me add one point. tim probably wants to have at it a little bit we use the term underwriters and the pricing on the deal is entirely wrong they are one player in this. early vc investors, growth investors, mutual funds that get in while they're private a lot of people have a vested interest in pricing very high including the company. so when you think about that, the only people that don't have it are those that are buying on the deal for the first time on the day of the ipo to me those investors are often giving unrealistic indications of what they want, too, so it's easier said than done finding that right price and i don't think it's all about the underwriters >> the bankers and the research guys are supposed to be sitting in different rooms having

different views on things. i'm going to take the view that's what's going on here but we have seen with a number of ipos is more in line with what dan is saying. i think by the time these companies have come to market, everyone who wanted to own those shares owned them and there was nothing left to do and it was all about lockups coming out for companies that the private world has never been that big. that is what this has been u about. >> up next, final trades or th. no commission. no matter what you trade, at fidelity you'll pay no commission for online u.s. equity trades. at fidelity you'll pay no commission whether your beauty routine is 3or 57,...

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"final trade" is sponsored by interactive brokers minimize your cost to maximize your return. >> welcome back to "fast." a big interview tomorrow disney ceo bob iger will join julia boorstin from the vanity fair summit tomorrow just past 1:00 p.m. eastern time. tim? >> the banks have outperformed the violent rotation we saw in august/september is happening again quietly. >> steve >> this is a tough one, snap i'll say buy but their report tomorrow, a slew of analysts getting positive on the name upside to 18 but this one could get hairy. i think you're okay to buy it. >> dan >> unlike guy, i think you do

not buy facebook into the earnings, it is an epic looking head and shoulders top rated >> i love feisty, dan. >> dan is always feisty. >> it's schlumberger, nice litt. >> see you back here tomorrow. "mad money" starts right now. >> my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to cramer america, i'm trying to make you some money. my job is not just to entertain, but educate, put it in context, call me, 1-800-743-cnbc, or tweet me at jim cramer no other stock in this marke