market i would say the energy stocks were caught up in that value cyclical trade that has come off the boil and that was across the board this week. >> we ended lower for the s&p and the dow. nasdaq just higher for its sixth straight session in a row. 17th out of 20 sessions positive for the nasdaq we're out of time there on "closing bell. "fast money" starts now. >> "fast money" does start right now. i'm melissa lee. jeff mills, peet najarian and mike khouw a major reversal hitting a speed bump in the reopen the chart master breaks down what he sees on the horizon. plus, slacking off why the work from home darling may not be able to cut it against the much larger competitor and later, the fed adding a new layer to its bank stress test. we start off tonight with apple. dropping sharply from all-time highs after news it was reclosing stores in areas seeing

an uptick in covid cases this comes at the end of the week when analysts were becoming increasingly bullish on the stock. rbc upped the price target to $390, saying the company is in a league of its own. citigroup came out with a price target of $400 on potential of the 5g iphone, and today, a new street high from jeffries who thinks the stock can go another 15% higher from here so what do we make of this bullishness, especially as there are still uncertainties about this u.s. economy? pete, what do you say? >> well, i can understand the bullishness just because of the fact there are so many different verticals that apple actually can tap into we're talking about services, wearables all the time, even the mac, which is almost a forgotten continues to be something that's very strong. so there's so many different verticals they have, but when you start closing down stores, obviously, there's going to be effects, and people are going to react like they did today. i think in the longer term,

we're still looking at a stock that because of the growth and it's not just the phone, like it once was, even i think when we get around to the 5g, i think it's more than just the phone. i think it's going to be some of the other categories, the app store included, i think there's a lot of reasons to like apple and dwling ii think it's legiti $400 to $600 stock >> is there any concern with selling a north of $1,000 iphone later this year, as we're seeing beijing, for instance, dealing with its own reclosures? it's primarily a hardware company. if they can't sell the $1,000 phones, i don't go what happens to the story >> fair point. although i would be less worried about apple than i would about another company with much higher cap-x, caterpillar, names like that, where it's a much more of a durable goods purchase i think apple, in addition to the several verticals that were mentioned, i think it's more of a trend. it's got a very sticky customer

base inelas tity of demand, and i think the phone is seen as a necessity as opposed to a durable good >> defensive, the sounds like this thing is. it's looalmost like a consumer staple, but jeff, what do you think of the valuation here? >> it's funny you guys bring that up because i wanted to mention the valuation. number one, i agree with what pete's saying. i said it before, but it's worth repeating. you do have the wearables, the services, they're going to be growth engines and they have to be, but even given where apple is trading right now, i think it's actually a stock that could do pretty well even if the market hits a rough patch. i had my reservations about this market i haven't been quiet about that, but even where it's trading right now, given its cash position, its strong balance sheet,iliti its ability to be ao buy back stock, it does have a little bit of a defensive

posture to it right now. the market was down 30% at the low year to date, and apple was only down 23%, so we have seen that bear out in actual trading, and i do think that that could continue the one thing i would look at is maybe china f you have trade relations deteriorate or if you have virus cases spike to the extent that you're worried about the economy, that's a potential problem. but i think just playing it on the momentum on the breakout and some of the fundamentals i mentioned, i still like it here. >> mike, your thoughts >> yeah, so this is an interesting one. i actually have a small bearish position in apple here, although i think people probably know that i began to get a little skeptical right after the stock started climbing out of the crisis lows that we saw and started to approach the all-time highs we saw in february that was about $327. that was about the price that i began to think, maybe we're fully priced in this thing here. i will say, you know, with respect to the iphone, that is a meaningful and important part of their revenues and their income, and it will be supported by 5g

let's face facts people who carry iphones and actually i'm one of them, everybody in my family is, when they go 5g, we're going to replace them what are we going to replace them with? apple phones the other thing is the mac, as pete was talking about, they have -- i mean, it's a small slice of the market, but it's a growing slice of the market. we have seen marginal increases there but it's a good margin business i think in that sense, it's a very safe company. and if you're thinking about the financials but at 25 times forward earnings, i do think it is fairly fully priced. my inclination would be if you have been fortunate enough to take big profits and didn't sell down at the crisis lows, you might think about taking profits. >> a couple maybe questions about valuation. i have a question about services your favorite apple analyst on the street is katie huberty, right? >> katie huberty and she loves the services revenue, as do you, right? >> yes yes. >> so my question is, what if

regulators here in the united states or in the eu start saying to apple, hey, take a look at how you deal with your app store and what you force developers to do and what you charge them. 15% to 30% of subscriptions, because microsoft's president was complaining about that at an event today. >> yeah, that's pretty interesting. obviously, that would be a hit, mel. i think that would be something that certainly would be a concern. although i just wonder how much there is to this whole thing in terms of are they going to be able to go after apple, because i heard both sides of the story throughout the day on cnbc and a lot of great coverage of this sort of a topic of where does apple go from now? are they the big bad guy they are the big bad guy because they are so big. they own the space and because of that, i still feel very, very comfortable about the services i get a lilt less comfortable if they do start to regulate in some way, shape, or form, but the reality is, it was services. it still is services but i'm still looking to wearables where they have incredible growth. that has caught up to or at

least catching up to the services in a very, very quick way. it hasn't gotten there quite yet, but getting -- the growth there is incredible, and the margins, mel the combination from the wearables i think is the place i i'm focusing even more now than it was years ago at the services now it's wearables >> big tech going after big tech i mean, the microsoft comments caught my eye when brad smith said, this is worse than when we were found guilty of anticompetitive practices way back when, 1980s or whenever that was it was -- this is worse. this is a worse situation. >> you know, i still think it's kind of tbd. listen, we're in an election year there's a ton of headlines swirling right now we have seen similar instances with facebook and some of the other larger players clearly, it's something to keep on the top of mind however, i think before there's a little bit more meat on the bone, we would be a little bit early in making a decision one

way or the other with regards to that >> fair point. check out shares of disney, falling today, as well as fargo published a bearish note saying it's a long road for park goers. in the past, you have loved disney, and of course, this fell, disney did, when we got the headline about apple closing some of its stores because there's a fear that there's going to be some backtracking when it comes to some of these openings >> yeah, it's a story that long term i still like very much. but obviously, in the near term, you have a business model that's going to be challenged you have the parks, you have studios, the content creation, all the things that disney is known for. it's going to be under some pressure when we last talked about the stock in early may, we were still at the beginning of the momentum and the reopening trade and the virus count going down you had parks opening in certain international markets, so i felt like there was a catch-up trade between disney and the broad market over the next three or four weeks, you saw disney make up ground to the tune of maybe 6% or 7% versus the broad market.

now i think we're in a little different situation with disney. you have had the stock turned away precisely at the downward sloping wo00-day average now you have cases rising in parts of the u.s., rising in other parts of the world i get a little concerned that some of the momentum of the catch-up trade is now behind us, especially at the valuation where it is now. if you look at the price in the mid-115, 116 as an example verses forward earnings, the valuation looks a little ridiculous even the wells fargo note that came out recently is talking about looking to 2022, where earnings would be more normalized they're still talking about 23 times at a price of $118 i still like the company long term, if i'm an investor and i already hold the name, i would continue to hold it, but if i'm looking to buy it, i would be much more exciting sub-110, closer to 100. >> mike? >> this is an interesting situation because, you know, this is a company that's been caught squarely in the crosshairs of this crisis, this

health crisis. they have a significant portion of their revenues that are obviously coming from parks, as everybody was talking about, and other things like the cruise lines. but even things like theatrical release delays and things like that affects your studio business as well the one bright spot clearly is disney plus. that is a bright spot, to be sure, but the size and scope of their other business segments is such that it is really hard for me to comprehend this is valued approximately where it was in april of 2019. that was when the stock got that big pop that we saw on sort of the disney plus thing. now we're in a different sort of a place, and i would be very reluctant, i think, to dip my toe in the water and buy the stock here >> the market's sharp swings probably have some of you wondering what's coming next we're getting chart master carter worth to break down the key levels he's watching for the week ahead carter >> sure. well, i mean, in a way, the market is sort of just in no man's land here. and so in that sense, you can

make the case for the bull, for the bear, but let's look at a few charts and figure it out three in total the first just simply, you can see on your screen, it highlights the high for the year, the low for the year, and then the midpoint. what we know is that equities peaked on that tuesday, february 19th, they plunged and bottomed on that monday, march 23rd, and this impressive gain, 47%. and now the churns stall the midpoint is that 2800 level, which you can see sort of highlighted there. so now, the second chart it's the same chart, but i have also included the trend line, in effect, since the march 23rd low. what we know is, of course, we have broken that trend line. and we're churning, we're stalling we broke, we tried to get back to it, but we're still under it. and ultimately, i think this is whether you're bullish or bearish, it's good because if you're bullish, it's the pause that refreshes if you're bearish, you think the churn is the beginning of something worse. to that end, the third chart, if

this is the beginning of something worse, that's my hunch, and we do give back more than we have given back, a reference point would be the midpoint, and so you can see here on this chart, the high for the year is anotated, the low point, you can see we have broken trent, and now where to i think we get to 2800 at that point, there will be real jockeying for position. we know vix is elevated and there is still a lot of issues with all of the things that people are hoping on, banks, industrials, and so forth. >> carter, thanks. we'll see you next show, options action and jeff, you also were looking at the charts. you're noticing a relationship between airlines and the broader markets. >> yeah, i mean, look, i had my reservations about the market in general from a fundamental perspective. i think we're in the beginning periods of healing, but i think the market has priced in a lot more than that i'm not sure what's going to be the catalyst from here to something more substantial in the market i was looking at the

correlation. i talked about this last week, but early in the trading session, actually, the correlation between cruise lines, airlines, casinos, we were up, but you had some red on the screen there, and even within airlines, you had some up and some down. it was interesting typically, in these really strong days in the market, you're seeing green across the board, and the reopening trade, you did not see that early in the trading session today. although i didn't know it at the time, it was perhaps a foreshadowing of what was to come for the rest of the day that's interesting, and carter also mentioned the vix this is something i'm keeping my eye on you have a negative correlation between the s&p 500 and the vix. s&p 500 is up, vix down, and vice versa you have started to see some days where the s&p 500 is up and the vix is also up, where the s&p 500 is down and the vix is down today was one of those days. if you look back over the last number of years, i think in the last three years, you only the four occurrences where the 20-day rolling correlation between the vix and the s&p 500 turns positive one day doesn't make a trend,

but when you see that 20-day correlation turn positive, it's actually been problematic for the market in the coming weeks it was early 2018, late 2018, mid-2019, and early this year. and just intuition speaks to as the market continues to rise, if the vix is also rising, the options market might be sniffing something out. we're not quite there yet on the 20-day correlation number, but we are hooking higher in the correlations becoming less negative, so pay attention to that because it's been a good signal >> funny you should bring this up because we happen to be in the company of three options traders on "fast money." pete, i'm going to toss it to you and see if you noticed this and also sort of does it raise your eyebrows? >> well, i have noticed it it doesn't really bother me as much, because of the fact when we look at the intraday movement we have been seeing, and i go back to the idea it's not a fear index. it's an index telling us what are the expected moves so you call it just north of a 32, you're talking about a 2% move on the s&p every single

day. we get something close to that if you look at the vix from the perspective of or the markets from the perspective of the lows to the highs and all that movement in between, i think it's warranted to be here right now, and we have had days where we have actually seen the market go up with the volatility index going um, but for me that makes sense because we're seeing movement like we have never seen before in the marketplace when we see some of these swings so it doesn't bother me. i have noticed it, obviously, and i'm using the vix when it's high, i'm using it to buy stocks and sell calls, and on the opposite, when it gets cheaper and closer to 30 or below, i'm then once again adding more option positions than i am stocks >> professor, what say you >> yeah, i mean, i'm kind of with pete here one of the things that's important to remember about the vix also is that options prices are not necessarily trying to forecast the direction of the market as how much it's going to move and you can suddenly incorporate new potential events or catalysts that essentially require the premium or the

insurance cost for the market to rise so do we have some things that are taking place over the course of the next 30 days that would justify a higher vix level or a higher implied volatility price of options even if we weren't seeing the kind of relatively violent swings from a historical context we have been seeing, and the answer is yes. we have things like bank stress tests and things like that when you have that situation, that's partially what the options market is looking forward to >> have to head to break coming up, a big bearish call on slack, taking the wind out of its sails today. what's next? and we have a special edition of fast at the top of the hour. we'll count down the five biggest ors stieof the week and how they impacted your money i'm working from home and here to help. here's a tip: get half-off the amazing iphone 11 on at&t, america's fastest network for iphones. second tip: you can put googly eyes on your stuff to keep yourself company. uh for example, that's heraldo. he's my best friend. oh, sorry nancy, i forgot you were there.

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welcome back to "fast money. we have a developing story on robinhood, the brokerage platform implemented some policy changes following the death of a 20-year-old user let's get to kate rooney for the latest kate >> hi, melissa robinhood updating its platform in the wake of a customer suicide last week. in a blog post this afternoon, the co-ceos announcing three updates. first, eligibility they're considering additional criteria and education for customers seeking level-3 options trading. second, user interface they're rolling out improvements and alerted as well as emails for option spreads and the way buying power is displayed. third, more educational resources and content related to options trading. the ceos saying in a statement they were devastated by the death. they say it's, quote, not lost on us that the company and services have become synonymous with retail investing and that this has led to millions of new investors making their first investments through robinhood.

20-year-old alex kearns died by suicide last week and in a note to his parents seen by cnbc, he blamed robinhood for allowing him to take on too much risk melissa. >> thank you kate rooney. >> it's great that the retail trader sin, pete, but education is so important. >> right, that's exactly right i mean, it's incredible. it's sad beyond words. i can't even describe it, and when i first read about this, but i think the reality is, it's all about education. i know mike and all the rest of the option guys would agree with me you have to understand the risks. you have to understand every trade that you're putting on, and unfortunately, too many go into this world just jumping right in this is a very, very difficult complex area, the derivatives market you have to have a full understanding and you have to be educated >> let's move on goldman sachs spending a firm message on slack they down graded to a sell, saying competition from microsoft teams is setting up for an enduring battle also setting a $30 price target.

shares are down, but up a massive 114% since march lows as investors bet on the work from home trend where do you stand on slack? >> it's been a darling of the work from home protocol, for sure but i think i would like to differentiate between the target markets of slack and microsoft teams. as mike has alluded to several times, listen, microsoft is a behemoth, top in class in what they do. any time, you know, you're kind of staring down the sights of microsoft, it's something to take into consideration. however, i would say sack is more associated with start-up vc, smaller businesses, and a yz mentioned in the note, some of the travel and leisure businesses i think microsoft is associated with much larger business enterprises, enterprise software, things of that nature. i do think there's a large enough market for both to be playing in, but as we have mentioned several times, now that stocks are starting to decouple from the overall market and you're seeing a bit more deferentiation between names, i

would rotate into a name like microsoft. it's less of a speculative play. clearly, if you own slack, i wouldn't rush out to sell it, but if i'm adding positions now, i'm being extremely picky and choosing, and clearly, i think most of the work from home is behind us, as opposed to the amount of time ahead of us >> it's precisely that exposure to the small businesses that they pointed out as a risk here. those are the businesses that might churn higher, you know, churn faster off the platform because we're in this phase of the economy where things are kind of tough here, jeff and microsoft has the ability to package up teams into its bundles. that's very powerful >> yeah, i would agree if you look at the note, i think 25% of slack's revenue is associated with companies of less than 100 people so i understand what he's saying i agree they can play in a little bit of a different space, but you have companies like zoom and slack where during this work from home, they have really

benefitted not only from a stock price perspective but from a business perspective, but it's also made that space look a lot more attractive to some of the really big incumbents that could come in and take market share and potentially reduce the growth rate that they're going to need to ultimately justify the valuati valuations i would rather own a microsoft at ten times sales versus slack at 20 times sales. for me, it's just as simple as that >> all right mike, quickly. >> yeah, i mean, we're users of slack, but i have always used teams and its integration is pretty seamless, especially when you consider they have the same ful functionality that zoom also offers, and i have said it before, i'm a bigger fan of microsoft than i am of slack, even though i am a slack user, and i continue to feel that way. >> pete, from day one, you were questioning slack and its ability to beat teams. >> yeah, and microsoft, their teams grew 70% in april. it says everything they're a monster. they want to kill slack, and i think they're going to >> coming up, we're getting ready for options action

why this consumer staple stock is setting up for a big pop. first, we have your final trades fast moneys ckn o. iba itw firm with a truly long-term view that's been through multiple market cycles for over 85 years? with capital group, i can. talk to your financial professional or consultant for investment risks and information. it combines powerful vacuum suction and spray mopping. to lock away debris and absorb wet messes. all in one disposable pad. for a complete clean, vacuum, spray mop, and toss, in one click. the shark vacmop, a complete clean all in one pad. (drum beats)

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jeff >> so i was a seller of ibb a couple weeks ago as it struggles to break out against its 2015 highs. i play the momentum, ibb >> pete najarian >> i'm going to go with chewy. i love those pets online >> bonowyn >> i still like buying upside calls in d.g.o.d >> mike? >> avoid the temptation to get long dividends in financials in a couple minutes, we'll tell you why. >> now that is a tease mike is going to stick around. coming up, by the way, we have a special fast five edition of fast money at the top of the hour, 6:00 p.m., but don't go anywhere options action is up next. where will you go first? wherever you make go, lexus will welcome you back with exceptional offers. get zero percent financing and make no payments for up to 90 days on all 2020 lexus models.

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it's friday. it's time for options action when you hear crakraft, it likey brings to mind shelf stable pasta bathed in orange cheese. when carter hears the word kraft, he sees green if you need more than mac and cheese, tony is running to walmart. he'll help you load your cart with a little of that name, and finally, no way to make another food pun out of this one so we're going to give it to you straight bank dividends, what is going on there? it's time to risk less to make more