>> good luck to everybody running the new york city marathon this zbleek that's right on zbloonds good stuff i got a buddy college. bill creek from morgan stanley. >> good luck to you. >> good luck to you. >> that does it for the "closing bell." >> thanks for joining us here today. we'll land it over to "fast money. it begins right now. live from the nasdaq market site over looking new york city's times square. this is "fast money. i'm melissa lee. traders are tim seymour. dan nathan guy adami tonight on fast stocks rocking all-time highs if you missed the record rally the chart master has two names that could be the ultimate catch-up trades. plus restaurant stocks left in the cold what's causing the indigesten for the secretary are. later on setting up a busy week of earning, the key names to wap. we begin tonight by making a list, checking it twice. why you ask? well because we are just 53 days away from christmas. 53 days 6 hours 59 minutes 20 seconds. >> who is is counting.

>> the music, growns on the desk not retail we're talking the santa claus rally. we want to know with stocks hitting record highs. >> don't say it. >> is there room left for a santa claus rally. >> that is. >> or will investor be left with a giant lump of coal >> wow. >> guy. >> along with how was your turkey day. >> gobble, gobble. >> gobble, gobble. >> gobble, gobble coming. >> yesterday the faft day of the year. >> love halloween. >> love halloween. >> but the santa claus makes me cringe like this did you see what i did there? bad news is it's probably feels as though where a right on the verge of one bad news is good news for the mechanic good news good news doesn't matter seems like the market wants to go higher. steve has been alluding to that for a kwhiel if you look at where the vix closed today 12 in the low 12s, the same level bottoming out late july. go back and look what happened in late july if the vix is any indicator of

anything these have been levels where when it bottoms out here typically the market tops out. with that said, i've thought that for a while but again with vix at this level i think the warning signs now are flashing red. >> tremendous price action today. close at the highs of the price action cyclical really rallies. the best parts of the market were energy, industrial, materials. >> we've seen a lot of rotation in the markets the last year and a half and haven't yield add breakout is to new highs incremental new highs though this feels and looks differently. i think a lot of it has to do with the fact where we are in the carl is what you are alluding to. i make one point, think back to this time back in 2017 we were having the same discussion as we went into november and what did we get >> we got catalyst taking the market straight up and kept going into january i think tim would tell you what was the most overbought we had in january of 2018 we had had a sharp look decline everything is in place if the news flow doesn't get worse to

have this break out finally. >> but then heading to decline afterwards >> you were up for the worst call ever. >> no the high he we are we go right now is the next lower we got next year. >> if you talk about reretail as a sector there's been no collective part of the s&p that's underperformed more relative to the peer group you were down almost 20 peppers going through the lows where we started to dig out of. but the s&p has been to me i think doing what it's been doing based upon trade or politics or the fed. but retail has been show me. you have companies in retail combination of they have the secular stories that are broken. you have logistics, dahms that are also part it but the ultimate cyclical story on a day when you saw that payroll numbers tell you people have jobs, that the working hours were there where they need to be. going into the christmas season and that's the part of the economy that has been spending and supporting the overall u.s. economy. so it makes sense to me that

people should be rotating. but i would rather be in a fedex. i would rather be in the uber cyclicals that to me have valuation arguments. if you go for payroll number telling you the kissimmee okay go for the places skouning rezbreegs even better, we had jerome powell tell us earlier this week that the bar is extremely high to raise rates we'll be a long time. >> self if i ask ask you all the reasons the market sold off. i will tell you all of them are better or not as bad as thought. china earnings, powell sop it does the set up but the big caveat we're switching sides here is that we're almost overbought in the s&p. >> what is almost? >> we're literally ten handles away from the overshoot level. i think we can sell off short-term in the s&p and then rally into year end. but we have to give some back. this was much too much much too fast. >> you think so? >> hi. >> hi. >> i thought the 12347 wab topping out a while ago. i hear what steve is saying. in terms of all indicators it

seems as if we are in levels where completely overbought. but in terms of catch-up having the great carter braxton worpgt he is on the parpgtennen. >> that's in greece. >> you have the stealth ral in energy slumber jay off the low. dan gichg me the wap hal burton look at refiners. huge energy. >> can't find help though. >> maybe going higher. >> refiners are great but emps you struggle large integrated names you struggle on a million basis you can get something out of them looking back five years the only etf still negative after five years is energy. the seconder sector energy still troubled. >> you said all the things concerning the market at different points of the year when we have equity selloffs are better that can change on a dime we no he that. i'll tell what you i think is different though i think the fact that we did not see yields go higher ohhen a day

like today when you saw the data we did theshtd interest in way when you think about this week we got the third consecutive rate cut since july taking out a third of the increases we had since the fed started raising rates a few years ago. to me -- i know that peter book made this case eloquently earlier. any cuts we get are addressing economic weakness not the insurance setup that this is what the fed is set to do with, the mid-cycle adjustment with rates going lower now i get concerned about what that means about global growth and growth here and we heard a lot about economic data stabilizing. the manufacturing data did not tell us that i don't think the jobs number as was as strong as the s&p up 1% says it was today. if you look where those gains were coming from, that sort of thing. to me, i don't think it's that impressive. >> you're saying that you -- you're concerned that rates didn't go higher ohhen a day like today preponderatesy up i'm not trying to correct new public. >> no, you are. >> but they're. >> down week over week.

>> are you telling me you're worried if rates continue lower that's a terrible sign and everything the market was skouning >> i'm telling you with if the 10-year it test attentions 1.45 level at a couple months ago that's not a good thing for u.s. equities. >> we have a split screen here. >> retires go we tested that 50-day on rates. and actually we bounced a bit higher today to me, ultimately the market i think has discounted that the fed could do almost nothing until mid-2020. >> i know but. >> that's the case where fts o equities though i'm agreeing we want to see rates higher >> i guess my point is we keep hearing about the rate differential what's europe going to do, the all the weak economy do they have continue accommodative monitor policy pressure on the rates. that's one of the reasons. >> europe outperform the uns look at the dax. >> if that happens i think you wind up the net result is that they're looking for growth where they can fine it that's probably the equity market. >> probably or maybe not.

>> think of all the discounting. we discounted recession in germany for two quarters discounted hong kong pmi we nope what's going on there. >> hong kong, south korea. >> isn't that well in the price? and if you have central banks throwing everything and the kitchen sink at the problem you get some -- >> dairy say, guy, green shoots. >> what was that thing you used to do. >> new beginnings. >> the classic "fast money" fans we want to take a trip to the par thenen the chart master has two perfect catch-up trades. carter at the plasma tell us what they are. >> just a matter of technique there is two things you can do if things are generally advancing. go with the real winner press bets it gets stronger having led or double back and find the real looser and playbook the bet it catches up or do a bar bell approach, a little bit of both but this exercise is picking two names one a dow jones industrial name one a dow jones

transportation name that have lagged and playing for catch-up. 16 stocks only in the s&p 100 down on the year s&p 100 is 95% of the weight of s&p 500. we're top heavy. let's look at two that i think represent opportunity. so walgreen's and fedex. here is a chart. and basically, it's down into the right. they're remarkably the same in terms of performance over the pastier. put in the s&p just for good optics obviously this is the situation. these are laggards there is the benchmark can we make a bet that maybe these are catching up? there are a couple of ways to slice it and dice it let's start with walgreen's and compare it to its direct peer. cvs pmt here is a lag. and again very correlated, obviously very correlated. and then any come apart, right and so i think you've got a catch up trade in walgreen's relevant i have to to cvs but the market it's specify look at

walgreen's charts no judgments or annotations by me gnaw now draw lines we know this is a well defined rounding bottom and you have the potential to quickly fill the gap and what that would be on the earnings beat or good news. that's important another way to draw the lines then is with this kpafrt this is fedex and ups. just as one cvs and walgreen's and dispersion you had the same thing, fedex lagging again quite correlated for what its worth and then divergent here is the thing appealing to my eye we held the prior low. but two gotten to the downtrend line and pushed above it one time and then backed away and now we're probing it again if you come to it once but get above and then try to get it at

again usually that's the time you get there. and there is a slight gap to be filled this year i think ultimately we do the same thing we're going to fill the gap. just as you had the quick down and that's the nature of gaps can you get the quick up two laggards, big names that are an opportunity. >> come on over carter. >> you bet. >> we'll bring the chair in. >> we never had the opportunity to wish mike the happy 17th birthday happy birthday get your license. >> more broadly for the markets, do you see seasonality kicking into the end of the year. >> it's already. to some extent if you look at the data 1928 to present 72% of the time q 4 is up medium and mean performance around 3, 3.25 what are we up for the quarter 1.5 maybe 2. we're close. the question is this you're never getting a replay of last year. last year was the worst october since 2009, the worst december since 1929

seasonality do we come in in january 1 and everyone walks away last year was a huge january do they keep going over who they are. they are all of us and people say you know now we are worrying about general inabilitiability -- as we were sitting here, the national debt crossed over $23 trillion. just like that process no problem who is paying the bill yeah we'll see january if you are you have trouble is as good a time as any. >> you talk about the gap between the relatively value or talking about relative kmarts ups and fedex. talk to me the other parts of what we want to see. are you. >> >> transports are lagging so many of the industries still below where they were almost two years ago. >> but it's a catch-up trade. >> it depends on which one the chrw one of the biggest truckers dropped 25% on earnings i want a mixed bag you got to pick the stock. >> obviously lots the mixed bags out there. you mentioned two names that

have some kind of like fundamental headwinds to them when you look at letter x big squeeze. what the macy's could you make the case for the left for dead and this is an area where you might see the squeeze. >> one are what the two biggest moves in terms of mochs. heinz ketchup. zbrernl electric sometimes up get asmktle pops on something that's a digger just going down. >> carter see you on "options action." >> love oa zblchlt food stocks leaching investors feeling kweezy are the hunger pangs here to stay in later ass carter mentioned ge lighting up the webb is this the beginning of a bigger breakthugfrroh om suffolk. we'll tell you more later. much more "fast money" right after this from happy to extremely happy. there's also angry. i'm really angry clive!

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welcome back to "fast money. stocks closing out the week with new records. but there was one group feeling some indigesten. the food stocks getting grilled. emmcdonald's, stab starbucks and wendys falling while the broad are market rallies are any of the names staying on your menu, dan why do you laugh so hard when i go to dan.

>> it's the writing nothing to do with dan. >> we'll tell that you in the last couple of weeks on my first chipotle breeder i've had since the event. it was delicious listen. >> you are so loved. >> we're talking about this on the call earlier today these are names obviously starbucks you throw in there mcdonald's there was a lot going for them in the economy we've been in the last couple years. and the stocks trading well. well since the summer they've been trading poorly. broke the uptrends in place. they were outperforming now they've come back in line with the market i think these are important names to keep an eye on, especially a mcdonald's when you think about where we're getting some of the job gains. they may be telling you something a little different thap. >> or is it a matter of they were the safety bets when the market was. >> yeah. >> moving sideways a name like mcdonald's sold off when the market starts ripping higher i would say if you buy anything on the selloff i would buy mcdonald's that would be the top of the list. >> i would just -- i would point out chipotle is up 80% on the year a lot of the names grabted in

the last six weeks or two months, president charts are difficult hooking charts this is rotation totally about big iconic global brands brands. these a consumer which at least we're arguing a lot of did he graphic with the folks with jobs appear and higher wages. you get to a sprays where valuation at some point always matters. and mcdonald's shouldn't trade at 35 times even if the u.s. same store sales comps are oh growing at 5.of 6% there is a limit to what people will pay the rotation in the market is everything about this stock. >> if you see a rotation out of starbucks and mcdonald's shouldn't we see similar rotation out of proctor and gamble let's say. >> maybe you are starting to because people say if the market is value rally why do i need these ridiculous value stocks when i can get fedex. >> can i say. >> you are why even ask. >> there is a stock today i think november 1st

saturday, second november 4th monday shake shack reports after the bell. >> uh-huh. >> if you look it's round tripped as breakout from august back down to the $80 level now tim is right valuations matter. and the valuation is this is ridiculous but 19% short interest one has to wonder that if shake shack says anything remotely god on monday will you get a move to the upside i think you may. >> you worked at shake shack some time. >> i did i was absolute the disdain in your voice. >> is this non-material public information come from shake shack, guy. >> no, tim no, there is not but i did wear -- i did wear a hair net because i just won't do that. >> back to the original question in terms of rotation out of the more highly priced. >> depends on if those staples are still earning money. how earnings look on the other staple. >> is mcdonald's earning money and starbucks earning money. >> yeah. >> why. >> when you have slowing comp

sales. wendy's making a $20 million investment in breakfast. are they getting back that's why it sold off. shake shack margin getting squeezed they're expanding and not getting premium dollar like in new york city locations everywhere else they expand. >> i think if you're a longer term investor and investing on fundamentals, i'm not going to -- i can't say with generalization to the entire group, but a lot of them and i think mcdonald's fundamentals are fantastic with the exception of the valuation are you being overly tactical in how you trade mcdonald's at home in i doubt it. you want to know if something is suddenly changed in the chtds or something wrong in the business model or structurally something going on in the sector regulatory period. otherwise i'm long the stock just be to be clear. but it doesn't mean i trade out of it based upon the move with in type of end. >> what my point is this starbucks was trade sg 50 in mid-2018 and traded $100 this summer since then it sold off 17%. couldn't even rally. rallied a few hours after the earnings today

i think this is more than just a rotation because they're moving into other things. i think this is something being said about some names that got really expensive got really crowded and i think that we are likely to see that in more we've isn't in sas stocks in tech different pockets and groups doing this i don't think it's that healthy. >> speaking of food cnbc stat down with starbucks ceo earlier today. you can see that hon cnbc.com. in the meantime here is else is come up on fast. >> shares of general electric closing out one of the best woks of the year. is the turn around for real or flash in the pan later, will we see fire works in the magic kingdom when disney reports earnings we'll break down what the options market is yi aadsanghe of the report. all that and more when we return mation. flying south for the winter. they never stray from their predetermined path.

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monday when omega advise earlien cooperman joins "halftime report." the hedge fund investors engaged in a war of words with elizabeth warren monday noon eastern on cnbc. talking the tape this woke up more than 15%. the big gains after the company posted better than expected earnings and raises cash flow guidance for yeater. ge closing out the best week in more than a year shares up more than 40 peppers since 2014 you're long the stock. >> i'm long it the $10 level is big when you look at power stabilizing at this point. free cash flow guide moving higher layer kupp has been doing it you buy more when it dips below ten. the bears not consequence convinced it's a binary outcome

i goe with the slogan ge 20 in 020. >> it was certainly my number one pick in the power lunch stock drop in april. it's nice together the 30% move out of the bottom to get on out of the cellar on this. the free to ge is free cash flow the question is are you encouraged by what you got and this is reason to upgrade right now a free cash flow yield of 2 to 3%. when asked about debt repayment which to me this is all a balance sheet issue. they said we're making progress, not on track i was reading jp morgan report they pointed that hout as a big deal that concerned them because it says you know, i want to marry on track, not making progress i need more free cash flow that's the question here. >> jp known the axe sticks by the $5 target. >> he has been the axe he has been right. >> he has been right on the way down not the way up. >> on the way down. >> the last three months he is incorrect. he has done extraordinary work in the stock if he says five who am i to

argue. >> you stick with the five too. >> yeah. >> all right time for the final trade >> boom. >> we were talking about industrials we were talking about rotation and fedex certainly carter gave us a lot of room on this one to look at whether it's relative value to ups and other transports this might be the one. i think this is indicative of an oversold assessment for the entire economy fedex get long >> steve grasso. >> bauch health company a bit long on this sometime. it's off the bottom. larry robins, the fourth largest hold ner bauch health companies. price targets $30 on the street. up theside move from here. >> daniel. >> you in a power puch last night on report next week. stick around on oa we're teaching you -- we're telling you how to play this thing for the longside into the print. >> he won, guy. >> i wasn't watching i was on -- i was in chicago. >> time of my life. >> having the time of his life.

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well it's 5:30 on a friday here at the nasdaq market site that can only mean one thing it's time for "options action. here is what's on tap. >> coming up on the big show. >> vegas. >> vegas, baby. >> vegas. >> we're headed to sin city. and the chart master's feeling lucky. he'll tell us the one name he is rolling the dice on. plus -- >> a whole new world. ♪ >> that's right. it's a whole new world for disney as the company gets ready to launch the new streaming