know, regulatory credits being pulled forward that's of course what the bears are yelling about right now, to get into the index, the s&p, which has been one of the bull factors as we mentioned. tesla earnings call, always important. >> that's a good question. >> we are out of time on "closing bell. thank you so much for watching "fast money" starts right now. tonight's trader lineup, tonight on fast earnings extravaganza. we'll dig into the numbers from tesla, microsoft plus, the dow closing above 27 k for the first time since june 9th. the bank of america says market rally may be on pause. the company you may never have heard of soaring 50% in its market debut how big is investor appetite we'll get answers. we'll start off with tesla the electric carmaker jumping in the after-hour session, despite

the staggering run into this report let's go straight to phil lebeau with all the details. >> a beat on the top and bottom line and the beat on the bottom line is significant. let's run through some of the numbers. much better than expected earnings per share and it's a fourth straight profitable quarter for tesla. $2.18 is how much it earned in the second quarter the street was expecting three cents profit revenue just over $6 billion as i mentioned, a fourth straight profitable quarter for tesla. we know the significance of that it is the last hurdle the company needed to clear in order to be included in the s&p 500. let's drill down some numbers within the report that are going to get attention operating cash flow, $418 million. automotive revenue was actually down it declined by 3.4% in the quarter, not a surprise given the fact that you had the freemont factory shut down for five or six weeks. but the automotive regulatory credits revenue, that's where they made it up. that was up $317 million

the model y production, overall it is increasing remember, they're building that out at the freemont plant. china made model 3 production, it is also increasing. that is an area of growth for the company. in terms of the next factory, they're teasing us we'll learn more perhaps during the conference call coming up in about 25 minutes they say that they have selected a site for that sect factory here in the united states. they've begun preparations for that site. but they're not going to tell us what the location is is it austin, tulsa? perhaps we'll get more clues in about a half an hour tesla is reaffirming it's 2020 delivery target of delivering at least a half million vehicles this year. there was some question, because they did not specifically reaffirm it during the last earnings call. they have done that today. so, guys, overall if you are a tesla bull, there's a lot to like in this report. >> phil, thank you phil lebeau. steve, i'll go to you, your take on these numbers we have seen so many times, even

if a company delivers and beats, it's a sell on the news sort of event. here we are with the shares almost up by 5%. >> the most important thing is what phil said the fourth consecutive quarter of profitability that's what everyone was focused in on. the door is open and remains open for the s&p add i think that's what people are looking at when you look at the stock, it's overbought, but it runs overbought quite often and it works off an overbought, which means a relative strength index, reading of higher than 70. it's at 72 currently that is nothing for tesla to be working off right now. so i would say deliveries, i wouldn't worry about them. i wouldn't worry about anything until you get to that level where they're either include in the s&p index, i think -- i think that you have to be a buyer of this stock. you're going to see them try to raise some cash here, raise some

capital here this price is unbelievable it's already run over every short that's out there shortages went from 30 down to nothing. so i would think that the s&p is going to be your ability to say let me short the news at that point. but until then, the stock is higher. >> part of this is technical, right, in terms of this move, tim? knowing that there could be inclusion around the corner, there's probably some buying $4.5 trillion in assets are indexed to the s&p 500 either directly or indirectly there's advance buying of the stock and then you have the short interest five-year lows, a short interest in the stock, which is about 10% right now. so that is down quite a bit over the past few months. >> yeah, and i don't think it's zero, but i think steve's point is that it's gone from being one of the things you talked about with the stock, maybe it's something you talk about now because the short interest was

part of the reason you've had the move the two things that i think are the most important numbers or the things you focus on, first of all, an additional $500 million in cash and now $8.6 billion in cash on the balance sheet. at one point this was a big issue. and it's not an issue. will they go out and raise i think it would make sense. i think they should be raising as much as they can. the other thing i would focus on are lower asp prices they're not getting as much for their cars they had lower services revenue. two quarters in a row and back to the red credits where they're really profitable. if you look at the numbers, look, a company can do whatever they want and report within the context of u.s. gap and, yes, it's important that they got four straight quarters of profitability for this how overemphasized s&p story so the company seems to take the good news -- i mean the market, the market certainly from the bull's case, deliveries over 500,000 reaffirmed and yet it's

really never supposed to be about the short-term for this company because there's no way it could be if you look at the valuation. so we've had upgrades over the last month, they've included for every reason as related to their technology, their miles driven, their software and the gross margins in it. but most importantly, what a move after the market, after this move in the stock it's hard to argue with that. >> regulatory credits must be clear, they're up 286% year on year to $428 million of $5.2 billion in revenue. so even though it did jump, that's not the reason why the stock is, you know, not up more. let's get more on tesla's quarter. less bring in gene munster welcome back i want to get your back on this quarter. >> everyone was focused on the s&p 500. i don't think that's the real story. the reason they got there is actually sustainable the tax credits are coming from other automotive companies that simply don't have an ability to

make evs fast enough, so i think that's the real take-away here, is this is not just about getting the s&p 500. this is about a company that is laying the framework for predictability around profitability. hard to imagine we're talking about the tesla story, but i think that's what is driving the stock higher in after hours. >> karen, you got a question >> i do. gene, what about the free cash flow, which obviously was a big surprise to the upside but i'm wondering how much of that is working capital adjustments that could end up turning around once production is back up and they are paying full payroll how do you think about that number >> i think it's going to be sustainable. i think they're getting some efficiency out of shanghai that's ultimately driving that so just taking a step back, the free cash flow, a second big part of the story, very impressive i think it is sustainable. >> in terms of the lower average selling price of the vehicles,

gene, is that mainly because the model 3 or is it also because of the price cuts that we've seen in some of the models either in china or here in the united states >> model 3 and model y, too. i think model y was up to 15,000 units, so it was 5,000 last quarter. >> do you think that we've seen the last of the price cuts >> no. what they're doing is really driving efficiencies and driving lower price to ultimately drive market share and i think that's going to be the piece that's going to surprise investors over the next several quarters. >> and gene, just quickly on the conference call, if you could, what question would you have for elon musk? >> it's really all about what's beyond cars. i think the energy aspect is an underappreciated part of the story so i think we'll hear a lot more about that on the call. >> we'll check in with you a little bit later on. dan nathan, how do you think about tesla at this point?

we do see follow-through after the report in this run >> yeah, well, i think you guys have just said it, it just confirms the fact that a $300 billion market cap company that's not in the s&p 500, but when people talk about how many trillions are indexed to the s&p 500, this is not going to be a massive buy. maybe it's $10, $20, $30 billion. there's people that are going to come out clearly with the calculation. so at this point some of those fund institutions have probably been buying the stock ahead of time, which has helped this story a little bit listen, this has been a very volatile company on the earnings front. they obviously were gearing towards the s&p add, but also there were some other milestones where some executives got really paid so i'm not telling you this company is not doing a good job executing. it sounds like they did a good job executing in what should to be a light's out quarter as far as demand, but it didn't happen

that way steve said you've got to buy it. he's talking like a trader he's selling i wouldn't sell it. at the end of the day, it's a very expensive story everyone was pooh-poohing the auto thing the forward story is going to be about software at the end of the day there will be sizable competition in the next year or two in the high end where these guys play, and i would even add the model 3 as the high end at that price point without those credits, when they're going down, it's probably a $40,000 car that's not exactly a low-end car. >> again, stock is up 5.75%. the conference call will be under way in 20 minutes and we'll circle back to tesla let's turn to other after-hours moving, microsoft dropping despite a beat on the top and bottom line. josh >> so the bottom line, solid

results against elevated expectations microsoft was up about 30% year to date. commercial cloud revenue growth of 32% he says speaks to strength in the crowd. azure growth of 50%, could have been expecting better, kirk says, which could explain some of the weakness. his question on the call, how are linkedin and office franchises set up for q1 if you look at the print itself, they're saying cloud usage and demand increasing as more of us are working and learning from home but transactional licensing purchasing continued to slow, in other words, as small and medium size businesses come under pressure, microsoft seeing some slowing in one-time software purchases. linkedin revenue increased 10% but they say it was negatively impacted by a weak job market. same goes for search advertising, revenue, traffic

acquisition costs decreased 18%. they said the search was negatively impacted by reductions in advertising spend. on the other hand, windows oem revenue, so licenses to device makers up 7% in the quarter. this call starts at 5:30 eastern, at which point you would expect cfo amy hood to give guidance. >> josh lipton, thank you. this is a stock that had nice earnings, but it did have a couple of misses on key line items that investors were watching, and that would be azure. also, the business process segment shy of consensus revenues, operating margin was also below consensus so karen, where do we go with this stock down here 2% after hours? >> well, give than it's had an enormous run and that they didn't sort of knock the lights out in every single category, i think it's actually hanging in there pretty well. i thought it was a really good

quarter. it had to be a really good quarter. so down this much is really i don't think a big deal i'll be interested to see how analysts look at it tomorrow, whether they've changed their outlook at all the stock got expensive 30 some odd times. i'm long, i'm sort of thinking, all right, i'm going to hang onto it. if it's going to trade down a little bit, i probably won't buy more it would have to trade down significant le for me to think i want to have a bigger position at this price. i'm still optimistic on cloud and i come back to it again and again, i don't have a better place to put the money. >> dan >> i think you nailed it with the azure. q4 last year they had 64% year over year growth so 50% constant currency sounds like a pretty reasonable deceleration and i think it decelerated from if q3 last quarter that was in the high 50%.

so expectations just got really high i saw a lot of notes from a lot of people on the street today talking about how the whisper number for azure got up to mid 50s percent gains and that's telling you that people are getting a little nervous relative to consensus. i'm with karen if you're a bull and you want to look past what is going to be a really rocky second half of this year as it relates to enterprise spending, then you're saying to yourself i want to see some of these stories come down. it's trading 30 times next year's earnings. that is an all-time high for microsoft, at least going back 20 years so the opportunity to buy some of these stops on the pullback would be very nice for a lot of people who really buy into this story that a lot of this kind of acceleration of some of these trends that were pre-covid are going to exist afterwards. but microsoft, not going to go from 200 to 300 in a straight line you're going to have to have an opportunity to buy it at some place. i think 190-ish would be an ideal place to reload.

>> this stock traded as if it were covid-proof we see profitability coming in short and you think what is the exposure of microsoft to small and medium size enterprises as we go into a potentially tough period for the economy if you think the economy is all right, i guess you think microsoft is all right but if you think the economy is going to hit a speed bump, you might think microsoft could feel some impact from that. >> i look at it actually the opposite way if you think the economy is okay, i think people are going to start to rotate into value. so for me, i've had a pretty good run in this one i actually sold all of my microsoft at the end of last week i sold all of my apple as well, because tech versus value. so, for me, you're right, it is the azure, it is gaming, it is intelligent cloud, regular cloud. but this was priced for perfection i hate that saying, but it was i took my chips and i put them

elsewhere for now. >> do you own any big cap tech at this point, steve >> no, i'm out of all big cap tech i put my bets basically in a lot of these high beta switches, virgin galactic, sonos and a lot of value plays right now i'm out of tech completely. >> let's get to the other big market driver, the race for a coronavirus vaccine. a $2 billion deal from the trump administration sending two stocks soaring today meg joins us with the details. >> the deal is with pfizer and biontech, the german biotech partner to secure 100 million doses of the covid-19 vaccine if it's successful. it has to get through the phase three trials and get fda approval in order for the contract to be struck. but $1.95 billion would secure the doses. there's also an option to acquire an extra 500 million doses and they say that this vaccine will be given for free to all americans

now, the companies say that they plan to start phase three trials this month if all goes well, they could be applying for regulatory approval in october and then be supplying 100 million doses globally by the end of the year. interestingly, this kind of gives us our first real price point in terms of what these vaccines may actually be priced at and trying to make some calculations about their profitability for these companies. they put a note out today saying the $1.95 deal for 100 million doses, that's going to be $19.95 a dose people will get two doses. he estimates the cost of goods sold for this will be in the low single digit dollar range, which he estimates will yield a profit margin of about 60% to 80ers i reached out to pfizer, they did not dmecomment on these specific projections but they did note there are

investing more than $1 billion in the development of this and they told me they are not getting any money from the government unless it gets through the process and has proven a high level of efficacy. >> pfizer is up 5%, tim. there you have it. the question we've all been asking, is pfizer or any of these big pharma companies or buy oh techs going to make anything on any of these vaccines it looks like maybe pfizer could. >> it looks like they could, but they don't have a vaccine. and so if you think about r&d and think about where they are and listen to the cdc or whoever you want to listen to on this, where they may or may not be on a vaccine, yes, i think this is potentially a driver but what we've seen so far is these announcements have changed being spikes and catalysts for the stock to ultimately being more market related dynamics i own pfizer outright. i think you own pfizer based upon it trading relatively trade, about 15% to its

five-year average, a fantastic balance sheet and they're in the hunt i think the headline today is important to send the message that some of the best and the biggest drug companies in the world are hard at work and close to at least having a deal in place with the government. but again, we don't know that it's going to be $20 and we don't know that the gross margin on the underlying is going to be what it is it's not a reason to go out and buy pfizer today. >> so basically you like the stock and the vaccine as an option >> yes, absolutely and i think the market dynamics of all of this are that much more important i wouldn't be playing -- we've talked about whether you want to own biontech mega cap pharma, but whether you would want to own both of those. >> retail wreckage, why one retailer says it is time to ring the register and we're not done with earnings this hour. stick around for all the

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getting hit card, both stocks have been downgraded to sale ratings. the analysts say they can no longer rely on malls and department stores to ensure growth they're saying nike, levi's, sketchers are focusing less on third-party retailers and more on direct to consumers karen, i thought for macy's ubs went down to a $30 price target. what i thought was interesting is they talk about the real estate, which had been a source of strength for macy's balance

sheet but they say it will probably get levered up and macy's will have loaded debt on its hands. >> right they have done that. they've been doing that for a few years now, trying to monetize the real estate and they were sort of slow to make progress a couple of years ago and i don't know right now what the value of that real estate is relative to where it was a few years ago. the piece talks about an acceleration of the decline of department stores that had started pre-covid and this just sort of sped it up and so i've been concerned about macy's for a really long time. i often talk about look at the debt and the debt investors have a much better sense of the health of the company than equity often so if we look, i think we have 2 7/8 maturing in 2023 that's not that long from now. and the yield is high, telling you there's a concern about whether or not this will be paid in full at maturity, not that far from now

so i don't know if $3 is the right number i can't really argue about it. but i think he's absolutely right to be skeptical and concerned about -- actually, skeptical and concerned about macy's and kohl's. >> the kohl's price target goes down to $14 a share so these are dramatic cuts. part of the call also is that these department stores are using resources on their balance sheets to deal with covid, and they really needed those resources to restructure their own businesses >> we've all talked about the fact that covid just exacerbated whatever the situation was before going into this environment. so we all knew that macy's was weak, we all knew that kohl's was weak, but i don't know what the risk/reward is to make this call now seems a little bit late. and with an over 50% short interest, one headline that's positive, and macy's will rip

higher, based nothing on fundamentals this could just be anything to do without macy's falling off the face of the earth into an abyss and this stock can move aggressively higher. so i don't know how great this call is. >> dan, i think once upon a time you made a call that amazon could buy kohl's could this be close to the moment with kohl's being sort of distressed >> yeah, i don't know if that's the sort of brand they want. you think about the barbell approach they're going to take they obviously bought whole foods as it relates to groceries, so maybe something on the apparel front. maybe macy's would be a better one. it gives them storage and logistics facilities i would expect amazon to make another purchase i don't think there would be big regulatory hurdles when you think about it, especially if they're going to save a lot of employees and save a company like macy's. i would also add one other name in retail that might have a

tough time until there is a vaccine, and that might be tj maxx. this is a great company and i think it's one of your favorite stores, mel. >> yeah. >> this is a company that is going to have a hard time going direct-to-consumer when you think about what their merchandise is it is one of those ones that i think should pop and catch up and get back to those prior highs if there is more visibility on vaccines. coming up, jmf shares soar in it's trading debut. what is heck is it first, does this rally have more room to run. bank of america's top strategist joins us next to break it down

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over the next period of time and we have today a short position in a high-yield index. we are bearish on highly levered companies to some extent i view that as a hedge on whether they're going to make money or not but the highly-levered businesses will struggle because it's going to take time for the economy to open. >> that was bill ackman on "squawk box" today the stock managed to head higher today. he said that long-term he is bullish america, he is long in the markets, he's long on a lot of the reopening trades that he bought close to the march lows, names like hilton, lowe's the home improvement retail, as well as chipotle. he remains in some of these

trades and i thought the hedge using a short on high yield was sort of interesting as well. >> yeah, it's been interesting high yield, because the government's professed defense of fallen angels and some high yield and buying the etfs that occupy the space has been interesting. bill's in broad brush strokes have been tactical in this and it seems like he's been on the right side of the trade, buying near the bottom wherever he remains in some of those positions. i think the key is ultimately we are in a credit crisis, whether the government is there to defend ever balance sheet or not, so being cautious and having that as a hedge i think is fair. talking about a couple of those trades, lowe's and chipotle for different reasons have been big winners because they either were in the right space, whether it's home improvement and nesting and lowe's spent three years to turn their business around and raise their gross margin and invest in their digital world.

whereas chipotle was investing in digital and we just learned today in their earnings that's 60% of their sales last quarter. what do you pay for those companies now is really the question they're trading rich relative to themselves but i don't see the market getting away from that. >> karen >> well, i, too, am short some high yield i think i am long bank so clearly any credit issues, any credit crisis, this would be a hedge for that i think we're going to see more pain i agree with tim we've seen sort of a government put for a while and i don't think it lasts forever and i think there's going to be bankruptcies, even some of, you know, the airline debt isn't trading great at all so i think we're going to see more pressure on high yield. >> our next guest things the rally might hit a pause. let's bring in savita subramanian. great to have you with us.

what's going to cause the paus is it that we're stretched on valuation or fiscal stimulus not coming in as strong as the market wants >> yeah, i mean, i think it's a combination. but here's i think the big risk, is the idea that fiscal stimulus has been aggressive, fed stimulus has been aggressive, reopening is starting to happen, but it is fraught with risks of a second wave. and now, in order to really get through this, we need to see either continued momentum in that recovery story, or if there is a stall we just need more stimulus to keep this story going. so i worry that, you know, if you think about it, we've seen as much stimulus over the last few months as we've seen throughout the entire last ten years, and we still haven't cleared the prior market high. so i think that those are the things we need no think about, is what's kept this bull market going? it hasn't really been cyclicles

recovering on optimism around reopening, it's really been more about stimulus and liquidity looking for a home and finding it in bank stocks. so the number one thing that worries me about the s&p 500 today, and this has really been a boon, is that almost half of it is technology if you look at the tech sector, communication services, plus online and internet retail, that's almost 50% of the market is tech. so we really need more stimulus to keep this going i think at the end of the day that's probably a longer-term positive, because tech is the future but one of the things i worry about is that if we do see a rotation towards some of the more beaten down cyclical areas of the market, what happens to tech is that used as a source of funds for getting other areas of the market so it's a little bit of an environment where good news could actually be bad news for the s&p 500, which is much more exposed to some of those secular

growth and technology themes. >> in terms of technology -- sorry to interrupt, are these valuations stretched because i see on your screen it comes up as number two, and so i'm wondering how that meshes with this notion that perhaps we're at a point where some valuations are high. >> yeah, so valuation on tech right now, if you look at -- if you just looked at a simple kind of growth versus value breakdown of the market, growth is actually trading, and growth is basically tech and internet retail and some of the work from home beneficiaries these stocks are trading at higher multiples than we saw during the tech bubble so we're at levels of optimism on growth stocks that we haven't seen ever. and i think the question now is how do you value these stocks in a zero interest rate free money environment, and the talk that i hear around we need a new

valuation measure for tech companies really reminds me of another period in time late '99, early 2000 where we were trying to value these companies are price to eyeballs and then we all know what happened after that so i think there are risks to technology stocks. the things that keep it going are they still have good balance sheets, they still have better growth than most other parts of the market but i think to one of the other commentator's points, if we see anything even kind of remotely positive around a reopening and a cessation of the second wave risk, that could really bolster a lot of these dollar stocks in the market that are trading near bankruptcy levels, like the traditional retailers, et cetera so that's what worries bea little bit about the s&p 500 in particular. >> tim, do you have a question >> savita, thanks for joining us you talked a little bit about where the equity risk premium, no matter what, it makes it a very interesting time.

so we're probably in excess of a dividend yield in the s&p, even after cuts in more than three times the tenure how much do you think that is supporting equity allocation right now? >> i think that is the number one reason that there's a big on the market, it's got income, everybody wants income, income on the s&p is a whopping multiple, close to a record high multiple of what you're getting in other fixed income assets so as long as that continues, you know, maybe you continue to see in-flows into stocks from bonds and other areas. but again, think about it, we've had a period where individual investors, hedge funds, institutional investors have moved capital into the market, we're close to all-time highs. yeah, the yield aspect is still a strong story, so i guess my advice to investors is look for companies that offer safe, sustainable yield that still provides a much higher level than what you're getting from

traditional fixed income but beyond that, i don't know if the market itself has a lot of room to move a lot higher from here the other thing i worry about is we're at a point where the next three months historically have seen very significant pickups in volatility we're three months away from a presidential election. if you look at the vix in the three months heading into the presidential election, usually you see a 30% increase in the vix, which is negatively correlated with the market we're moving into this period where you've typically seen a demonstrable pickup in volatility not a lot of cheerful things to say right now about the market sorry. >> yeah, thanks savita it's always good to see you. savita subramanian steve, i'm glad that savita mentioned the sort of seasonality and i really don't like that as a notion in general because i feel like people know what the seasonality is.

but muscle memory is that in the fall bad things happen in the markets and we have seen that time and time again. so we have that sort of, you know, underlying reaction to october, let's say, and then you have the presidential elections in november. >> yeah, i think everyone is setting up for an extremely volatile -- you've got to remember the economy is going to be starting up you haveschools that may or ma not start. the biggest thing that the market has to worry about is large cap tech and tech. it's 50% of the market if that rolls over, the market rolls. coming up, it's just jamf, you're not pronouncing each individual letter. it sounds like you're grunting it's a lot of fun to say what is it, though why are traders buying up this name later, looking for good intel, stick around because we will dive into the options into what is ahead for this chip stock er'l

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>> shares of jamf soaring 50%. the company makes enterprise software for apple devices it's one of those rare tech unicorns that's actually profitable karen, what are your thoughts about this >> well, i just learned about this company today and i actually watched their video to see what they did. i see why people like it, one that makes money that's something unusual right there. but also the subscription model is great i was sort of wondering why wouldn't apple just buy them or maybe did they consider it i don't know but congratulations to them. i'm not buying it here. >> it lives in this sort of like positive cross-section of things

related to apple and software in this market, dan >> well, it's more importantly re recurring and then obviously the profitability. any private company right now in tech, and you have those kind of attributes, you should be looking at going public. you can do it on the nasdaq. you should go public there seems to be tremendous demand for any sort of stock you just tell any sort of story and your stock will go up. have at it. >> coming up, earnings season in full swing we'll take a look at more after-hours movers, we'll look at chipotle and las vegas sands. we just got a headline from the earnings call that the company has announced the location of its new factory. that would be austin, texas. we'll get more details straight ahead. stay tuned

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welcome back to "fast money. we've got an earnings alert on two more movers, chipotle and las vegas sands. coo rob goldstein saying on the earnings call we are in a world of hurt here these are two reopening trades, of course both lower chipotle, tim, you had mentioned really doing well on the digital side of things and this has had a tremendous run >> yeah. digital sales were up 216% year over year for the quarter. they're now more than 60% of sales. the average ticket size is higher the gross margin is moving higher so is the valuation. so as one of those stocks, unfortunately there's a new of

these on the sthow where i talk about not having been in the stock for the move and being bearish on the multiple. at some point i just wonder unless there's a greater share of the monthly pocketbook that's going to fast casual, i think this should be something that you should be fading this move it's priced to perfection. >> in your swap of big tech for value/reopening, are casinos in that basket? >> yeah, they have to be in that basket and i go with the one that's been the outperformer in a very down market has been las vegas, the one you just mentioned and you know the way i stand on this you get the us and you also get sing singapore in that. for right or wrong reasons, you get another levered pull they are definitely names that will rally aggressively once we get even halfway to the goal where we have to go. so i think they have to be in the bucket. >> be sure to catch kate rogers'

exclusive interview with brian niccol tesla announced austin as the location for its new factory. gene, what is new? >> well, austin is new, melissa. this was largely expected, but it laid the groundwork for the company to ramp production recall that they reiterated the 500,000 vehicle target for 2020. they need to grow to 15 million vehicles over the next ten years, at least that's elon musk's target. so austin is new and they also expect to have three more factories in the next five years which would bring them to six total factories. when i think about this $300 billion market cap and think how can this be a much bigger company, one is for them to scale into that and there is some news around that in austin. the second, i think, really critical piece here that's going to be largely ignored here is elon musk's first comment was

about austin, his second was about their solar business this is 5% of their overall revenue. but the fact he is mentioning that, i believe he's starting to educate the market about tesla being much more than a car company. i pride myself on being level-headed and even-keeled and i don't want you to think that i have totally drank the kool-aid here, but i think this company can take its existing technology around batteries, motors and what they're doing in self-driving and apply it more to the emergency market and create much more than a $300 million market cap undoubtedly it will be a wild ride with the stock, but this is i think the start of what will be a multi-year phase where tesla educates the market about being more than a car company. >> quickly, gene, your grade on the quarter is >> a minus >> you didn't drink the cool aid, you would have given it an

a. a minus is pretty good, though gene, thanks gene munster of loop ventures. dan, i think that's interesting. the second comment on the call is solar elon musk was widely criticized for buying solar city from his relative now maybe the market sees the wisdom that could be behind that >> well, the market is starting to get really comfortable, what may be a blue wave looks like in the fall and what it means for infrastructure spending, specifically for green technologies so that might be something that's helping the valuation here i'll just say that there's a lot of people that have been very offsides on this i think there's only eight buy ratings on tesla as far as wall street analysts are concerned, versus maybe 30 hold or sells. we've never seen anything like this i don't think you'll see a bunch of analysts come in tomorrow and upgrade the stock. >> coming up, intel getting ready to report earnings we'll tell you what options

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welcome back to "fast money. check out the smhetf closing at an all-time high today intel reports tomorrow mike has the action. >> melissa we saw calls outpacing puts by about 2-1 and right now the market is implying a move of about 5% higher or lower by the end of the week. that's slightly lower than the 5.5% the stock has averaged over the last eight quarters. the most active opening activity we saw in the options that expire this friday werethe 61 strike calls those were trading for about $1 $1.5 so options traders could be taking advantage of the lower than average to risk 2.5% of the stock price that it could break out of the languishing we've seen over the course of the last six weeks or so. >> be sure to tune into the full show friday 5:30 p.m. eastern time tensions rising between china

and the u.s., we'll get you the latest from ijanbeing d what it could mean for your money. stick around stick around much more ahead. aded the td amee mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪ ♪ ♪ now is the time to support the places you love. spend 10 dollars or more at a

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>> announcer: final trade is sponsored by interactive brokers. minimize your cost and maximize your return. welcome back to "fast money. a huge lineup of interviews tomorrow we'll be talking to parker, and clayton and palihapitiya and segal all starting at 6:00 a.m. eastern time we are a few hours away from the market open and the latest tensions between the u.s. and

china. let's talk about the very latest good morning, eunice >> good morning. hong kong investors were rattled by the u.s.-china tensions, but here in the mainland investors will get their first chance to react to the tensions this morning. shanghai was closed when china confirmed that the u.s. had ordered it to close its consulate in houston by friday investors are likely going to be waiting to see whether or not china is going to retaliate, perhaps close one of the u.s. consulates and whether or not the u.s. would also decide to reverse the decision for what china has called a political provocation the state department said the closer protects american ip. secretary of state mike pompeo is going to be delivering a speech on thursday on china and investors are closely watching that despite the u.s.-china tensions, investors are generally feeling more upbeat about the prospects for the chinese markets. the shanghai index was revamped

for the first time in 30 years, adding 25 tech names from the nasdaq style star board, dropping a bunch of riskier ones there are a lot of people who say that more needs to be done, but the general direction is one, melissa, that people like because for the most part it means that the stock markets here are opening up more and so it's an attempt to make this more lucrative for local investors and for chinese firms to be able to find a new place to list. >> eunice, thank you good to see you. tim, eunice brings up a good point. even though china-u.s. relations have been deteriorating, we have seen the chinese stock market go higher, perhaps at least in part to the chinese government. >> yeah, the chinese government is doing the same thing we're doing here with a lower dollar with interest rates at zero. this is a great environment for china and certainly also it takes a lot of pressure off of chinese property markets so i think the fact they are

restructural the index, remember historically some of the indices were bank heavy, a lot of big life insurance companies so this is excellent for just the performance of the market. i think emerging markets continue to rally as long as rates stay low and the dollar goes lower. >> time for the final trade. dan nathan >> yeah, qqq, we're going to have apple and amazon next week. i think it's going to be a high for some period of time right now. >> on the back of chipotle, i'm thinking about starbucks, so they report next week. and also we're getting a look on as they open around the world how that's going, which chipotle doesn't have so starbucks. >> steve grasso. >> spirit airlines, one i've been in for a while. this is one that's definitely tied to obviously the economy and value, doing better in economies reopening. it's giving you a lot of trading

opportunities. it's trading right back down to the 50-day moving average, which is right about $16.20. i would be a buyer here and look for a pop moving towards $20 >> tim. >> i'm liking home depot ove my mission is simple to make you money. i'm here to level the playing field for all investors. there is 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 money. my job is not just to entertain but educate and teach you so-call me at 1800-743-cnbc or tweet me @ji