addressable market is for that >> i'm cracking myself up and nobody else. key market take-aways? >> we hit pretty near the lows from a couple days ago i think it's still very choppy, kind of skittish action that we saw today, pretty typical of an ongoing pullback corrective move i'm melissa lee and this is "fast money. tonight on "fast" the changing of the guard at citi the big bank tapping jane fre e frazier. we have earnings from oracle and peloton. we'll break down the after hours action later, hitting the jackpot sports betting stocks on fire as the nfl gets ready for kickoff

we start off with a major reversal on wall street. s&p 500 gave up gains around 2:00 p.m. to finish close to session lows same for tech stocks you saw the same thing play out in facebook and netflix, both stocks starting strong, finishing around session lows. you can extend this to regional banks, health care, energy, small caps what does the action today tell you, guy adami >> it's not encouraging. i'm not going to make a deal out of today yesterday we had the show of hands. i don't think any of us were convinced by the rally i'll continue to say a 30 vix suggests we're going to see days of 1.5-2% moves. i happen to think on aggregate it's going to be lower i'm not trying to be all good morning and gloom, but the environment we find ourselves in in terms of a lot of different things as we head into the fall, on top of which an election is

probably a coin flip, i don't think it's particularly bullish for the broader market and especially on the back of a rally that's been historic >> karen >> i did raise my hand yesterday, just to clarify i do think all the things that caused this rally are still there, maybe other kinds of stocks rally, some of those parabolic ones will probably be left out to me, i think it was the skinny package that failed that sort of the kacatalyst for the selloff i'm long facebook. i amlo long apple, long alphabet i thought actually the banks hung in there pretty well for a

down day i look to buy some fedex but it really didn't move very much i'd like to buy some of that thi i'm still optimistic that that selloff was very much about taking the froth out of some of the huge nasdaq players and not the end of a bull market. >> dan >> i didn't know guy had a cat i know he has dogs because they bark through our show every day. listen, i think what's really interested and i shouldn't come as a huge surprise that what led on the downside today and the last few days were the very things that were defying gravity on the way up. they're heavy. they work off a lot of excess. i'd keep a close eye on apple in particular i think the panic low on tuesday

was about 111. you don't really want to see that break there the s&p 500, the qqq, the nasdaq 100 closed just above those lows from the other day we don't want to see them round trip and make new lows mel, you mentioned the small caps the russell 2000 has underperformed the entire way. it's still down about 10% on the year that has materially broken its up trend from the march lows you talk about the stimulus, skinny, fat, the front end loaded all this fiscal stimulus and we don't have another package here we have structurally high unemployment it's still well above 10%. i think the russell 2000 is a bit more reflective of what's going on on main street. >> we may not have a stimulus package, but we have a fed could it be jay powell once

again to the rescue? >> my hand raising yesterday was a halfway. karen talked about the fed she also said frothy if you're taking a sip from that frothy mug right now, you have a little bit of a froth mustache i think you can pull back more if you look at levels from june 26th which is when a lot of these mega cap stocks and names like square and paypal and nvidia ran crazy, i think those are levels that look reasonable to come back to. you're playing the nasdaq 100 or triple q's, no one's going to be able to ring that bell you have to find levels in the market where a lot of these stocks are holding some ground here nothing has changed. today we had some jobless claims number which still tells you the

pain that's in the labor market. i think we have inflation. at some point that's going to be destructive for fixed incomes. we had to pull back. you layer on china, layer on elections, layer on a 30 vix or maybe that's why we have a 30 vix and that's where we're going to be. >> let's talk financials here. we got some big news out of one of the biggest banks citi announcing that jane fraser will take over the move athletes a lecompletesp shakeup. citi is down 36% this year alone.

let's talk about this with mike mayo mike, your thoughts? should we expect any real departures in terms of strategy given that she's worked so closely with the ceo and the cfo? >> i hope we see changes with jane fraser as the new ceo of citigroup. when you look at the eight-year record of citi's ceo, you look at the stock price citi's stock price is up one-third, the bank index is up one-half and the broader market has more than doubled. citigroup today has worst in class efficiency, returns and stock marketvaluation. the current ceo has done an excellent job to improve the resiliency of citigroup to a point where it's stronger than it's been in decades but when it comes to strategy, i

think the current or exiting ceo has played it too safe i hope jane fraser takes a fresh look at the business mix, takes more aggressive actions. as you know, i've been on your show and i've also gone to many annual meetings of citigroup and said why don't you sell off mexico, why don't you sell off the consumer businesses in asia, why don't you act more aggressive and the biggest mistake made by city's current ceo is when he said a few years ago, our restructuring is over. i hope we have a fresh look and there's more restructuring to b done how can we restructure citigroup to improve profitability not just for the next year but for the next decade. >> make, it's karen. let me ask you about citigroup

but it's more broad than that. provisions for this coming quarter, how do you think these banks are set up going into what will probably be very, very elevated loan losses >> for citigroup and the banking industry, these are sobering times. you are seeing unemployment stay high you're seeing bankruptcies these are tough times. let's make a distinction between costs for bad loans and the bad loanlosses themselves. that distinction is a subtle but huge distinction in the second quarter and the first quarter, banks took enormous losses for future loan loss they reserved for future loan losses so the reserving for future loan losses probably peaked in the second quarter

those costs are likely to come down at the same time, you should see the actual losses go higher over the next several quarters, but not too much yet given the degree of government intervention and forbearancforb. we think that the provisioning was so much in the first half of the year that earnings for the big banks hit a low point in the second quarter that should be the lowest point that you'll see through the course of this pandemic. i think that's important >> mike, why most of the other banks are at least trading around tangible book, what is citi's problem, in your opinion? >> well, their efficiency is sub par, their returns are sub par and they've not been aggressive enough with restructuring their business mix even if you thought the current

ceo had done a fine job, at the end of the day the stock market doesn't lie and you're absolutely right, you're trading at .7 times tangible book value. that implies a huge hole in the balance sheet, which is not the case, in our view. it's not like the global financial crisis when they had, you know, $50 billion of bad mortgage related assets that needed marking down. you don't have that situation. to us, this is an opportunity. having said that, you lack a catalyst because you don't see enough aggressive restructuring. you have the business in asia and mexico and the u.s when it comes to wholesale banking, wholesale banking is global retail banking is local by country. that's a failed vision of the last 100, 50, 20, 10 and couple years at citigroup this idea that citigroup was going to serve that global traveler and service all their

banking needs, that you have a customer in hong kong who sends their kids to boarding school in london and they ski in aspen and they're going to be your super wealthy customer that's been a fail eed experime over any time frame. that's why we called for more restructuring. the concern with the stock trading so far below tangible book, is a concern can they generate concerns above the cost of capital which is a function of their business max, which ix >> mike, thank you >> tim seymour, do you like citi more, less, or the same? >> love the social change here i love the fact that citibank's

board is going to be 50/50 gender male/female this is a move that should not be seen as extraordinary, but it is it will be great when this is common place i'm long citibank, i'm long jp morgan, i'm long bank of america. i think the drivers today for citibank longer term are where they're going to extract the most value it does seem that their commercial bank is infrastructure heavy there's probably a lot of focus on global infrastructure for ms. fraser going forward i think the banks have thrown enormous provision for the last two quarters and looking for better times ahead but i'm waiting for that catalyst even before covid-19, banks were underperforming and they were underperforming even before they had this headwind. >> this might be more common

place, at least on wall street, karen. jp morgan has pretty much te telegraphed that the successor to jamie diamond will most likely be a woman. >> i hope it is more common place. jp morgan has set up a horse race between the current cfo and marianne lake, who is the prior cfo and now head of consumer lending. both of them will have outward facing experience and operating experience they're both very young. one's 50 i think marianne lake is 51. when those rolling five years that jamie diamond says he'll retire in five years, when one of those actually is the five-year period, it will be one of those two and i think they're both stwrooextraordinarily taled for fraser, that's great it's not a complete shock. maybe the timing was surprising. i hope, as tim said, this is common place at some point

>> we're still awaiting a response from nikola founder trevor milton to a scathing short seller report that sent shares tumbling 11 today. it goes on to say that gm, which just announced an 11% investment in nikola didn't do its due diligence before making the deal, gm telling cnbc we are fully confident in the value we will create by working together. nikola did fire back today to call the report a hit job, saying cowards run, leaders stay and fight for integrity.

troll on it was a 90-page report so maybe it's taking longer for trevor to come up with a response here the first response is we know and hindenburg did disclose a short position in nikola >> it's a tough one. i think if you look back at elon musk's history he face add ld af criticism. he took on the shorts and he won. he even has a gym short line on the tesla.com website to show for it i don't love to see founders,

ceos get in wars with shorts it's a bad look and it's distracting from the business. that being said, the fact that this stock went up 40% on that gm news earlier in the week was pretty astounding. it was obviously a pretty impressive investment. but you've had two instances where investors had the opportunity to really do the due diligence here so to me, i suspect it's probably more the same i doubt there's fraud there. i'd be surprised. >> guy >> well, to answer your question to dan, there is no difference at all you can do thoughtful work on the bull side and the bear side. the only real difference is, as many people have learned the hard way, it's a lot more difficult to make money on the short side with that said, and obviously i have no idea the veracity or the truth, gm had better hope they did all their homework and

crossed their ts and dotted their is on this one, because if they didn't and there is some truth in this report, the $2 billion investment will have an exponential negative factor in terms of what it means for gm going forward, in my opinion, again, having no idea the truth or veracity of the report. but if i'm at gm right now, i am absolutely burning the candle at both ends to make sure i did my homework. >> tim >> one of the differences is they're alleging fraud it's one thing to say that a company isn't worth the valuation. we had trevor milton on. i think the term business plan not business has been used there's a lot of allegations including nepotism at the country or there's no real technology there, but it's very different than alleging fraud. i have zero position in nikola ultimately short reports like

th this that are sensational are ones investors have to pay attention to as well it's to point out thr certainer certainly opportunities that people will get out there. there's a difference between fraud and an expensive valuation for the company. coming up, the mother of all bubbles. that is what one of our traders is calling a key part of the economy. plus, we're following the after hours action of oracle and peloton.

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welcome back to "fast money. we've got earnings alerts on peloton and oracle let's kick things off with josh lipton >> i caught up with kirk who covers oracle. he called them solid results key questions on the call, qq guidance which we just got more kpcompetitive position in h growth market. of course, another big question is oracle's interest in tiktok u.s. operations. kirk has previously written about that says it could make sense if oracle sees them as a partner.

infrastructure businesses are also growing rapidly as revenue from zoom more than doubled from q 4 last year to this year i have a high level of confidence that our revenue will accelerate as we move on past covid-19 she says eps growing between 10-14% revenue growing between 1-3% she says the company will make no comments about press reports about tiktok if you're waiting for news about that, doesn't sound like we're going to get it on the call. >> dan, what's your take on the quarter? >> good quarter. that cloud license beat was big. the problem with the company is there's knob revenue growth. wh when you look at salesforce and the stock rallied 24% the next

day, you're not going to get that at oracle it's a value play for a reason i do like it here. i think you could play for a breakout market here in a better market if they do happen to get tiktok for some reason, i think that would be a great asset for them to own this quarter looked okay i would not be selling it right here i think it's accept up pretty nicely in a better market to break out above 60. >> total blowout fiscal q-4 earnings from peloton, which seems like the stay-at-home brand to beat. the company reported its first quarterly profit since going public eps came in at twice expectat n expectatio expectations connected fitness subscriptions up 113%, paid digital subscriptions up 210%. take a look at how peloton has

benefitted from the new stay-at-home life we're all in it's said to expect 880,000 connected fitness subscribers for the kwhoewhole year they ended up with a million the only downer in this report is they said you could expect longer wait times for the bikes for at least another two quarters the average users' workouts per month in fiscal q-4 were twice what they were in fiscal q-2 >> i'm curious about that number i saw on twitter rich greenfield said this is per household as opposed to per user. what is the distinction? >> it's the number of users in

your household i know a lot of people who maybe there was one user and when the pandemic started they got a whole other set of shoes i think it's also per individual user as well that metric was way off. >> let's trade this one, karen it's amazing peloton absolutely delivered on this one. >> it is amazing when you consider how high the expectations were. just a couple of days ago two giant upgrades to 110. so to be able to deliver on that and beat by such a wide margin is pretty impressive i thought that 24.7 million metric of monthly use was interesting as well. we don't know exactly with who used it how many times but also the churn was really

good, less than 1% per month churn. we'll see how that involves as gyms open or as economies reopen i don't own it it's just too expensive for me, but outstanding quarter. >> in terms of a metric of user engagement, i wonder why investors aren't demanding to know the average minutes per subscription per month as opposed to the average workouts per month. if you really want to know how engaged your user base is, it would be how many minutes you are engaged with that actual product. guy? >> you take a five minute arm class. >> or a 90 minute power zone endurance and it's all the same. it's one workout. >> that's fair i guess if you really wanted to break it down, i'll push back and say i don't know how important that metric is

the fact that people are on the bike, people want the new bike, people like dan have the treadmill. we've said for a long time it's not just a hardware company. i totally get what karen is saying in terms of valuation, but i think the stock continues to grind higher from here. >> tim >> even more impressive when you consider they talked about a fallen gross margin because of price deductions vertically sbe desperatintegrat. coming up, luxurious litigation we'll tell you about a new twist in the deal drama between lvmh and tiffany.

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we get a key piece of housing data tomorrow. we get weekly mortgage bailouts tomorrow before the bell check out the stats. mortgage rates are at record lows new home sales are at the highest levels since before the financial crisis housing surged for a third straight month and home prices continue to soar one of our traders says the housing market is on shaky ground in fact, he is calling it the mother of all housing bubbles. tim? >> i am that trader. it's not on shaky ground right now but the mother of all housing bubbles is upon us because we're at the mother of all bubbles.

rates are at zero. before the housing crisis rates were not at zero they were significantly off bear highs. if you think about the exodus out of urban centers and where people are buying homes and the fact there are a lot of younger folks buying their first home, the market and the demand is extraordinary. the ability to actually borrow against housing prices that, yes, they are going higher, but people are buying a lot of houses that cost a whole lot less than the houses they were buying ten years ago, especially when you consider the cost of houses in urban centers versus where they are in regional markets. i think this is an extraordinary trade and i still think it has a ways to go if you look at some of the material opportunities within the xhb, i talked about whirlpool yesterday or train or carrier, i think these are excellent plays still. i think those are rerating valuations at some point this will end very poorly these housing numbers that we're seeing in terms of new home

sales are extraordinary, especially when you consider where the economy is the same way we've seen speculation in the stock market, we're seeing speculation in the real estate market frankly i think that's something people should be war ri of. >> our next guest calls housing a bright spot in the economy bob nardelli >> i shared with you earlier i think housing is a real bright spot the demand for housing will continue for some period of time it certainly is a stellar market if you look at all of the support for housing, whether it's home depot, lowe's, tractor s supply, i'm proud of all three of those ceos. i think this is going to continue for a while i think with the pandemic we're

seeing people moving out and i think they're moving to areas where housing prices will continue to be high. i think this has more to it. >> so you think that the pandemic has caused changes that will last for much longer than a couple of quarters, bob? the argument would be that people don't necessarily know what their job situation is going to be whr, whether they ri employed for one or whether or not they will be required to go back to the office, in which case having a two-hour commute to new york city doesn't really seem attractive. >> if you look at a recent ceo survey, 72% of the ceos say their employees or associated are planning on continuing this hybrid model of working from home and maybe going to the office once a week, once every other week the other thing you're seeing is a strong demand associated with this is in the used car

business people are not going to be riding subways >> in looking at home depot versus lowe's, ellison is about two years into his restructure do you think he can narrow that gap a lot more between the margins that home depot makes versus what lowe's does? >> he came in from target when we were there. if you look at where the top was, 70 to up around 140 or

something. [ indiscernible >> i think he has the capability if you look at one of the real bright spots for him and the recent survey shows that the majority of the population lives within 10-15 minutes of a home depot. the convenience factor is there for them >> so to take that point the next step, ceos are forced to run their companies more efficiently than ever.

we saw some margin inflection, companies coming out of the crisis lean and mean what are you expecting in terms of the turn here when we finally get the economy to reopen? in terms of profitability for a lot of these companies that are elephants that suddenly learned how to dance >> there's a mixed bag out there. if you look at housing, certainly a bright spot. if you look at hospitality, travel, industry for example, we just look at some of the big names like hyatt and marriott so people aren't using hotels, air travel is still down you're continuing to see increased levels and recent negotiations there for flight attendants that just rolls downhill if you look at what's happens to the major airlines and the impact on boeing

so i think this is really going to be a mixed bag. we talk a lot about a v recovery i don't think that v recovery is really affecting everyone. you look at irrestaurants in new york city. it's going to be a slow recovery for them i think there will be some real winners and some that won't see that v recovery. >> bob, always good to speak with you stay well. >> thank you. >> guy, does this make sense that housing is so strong in the economy we have given where claims were this morning, given where unemployment is in general? >> under those metrics, no then you factor in the fact that people are fleeing these big cities looking to get out, then it starts to make sense. coupled with the fact that interest rates are at ridiculous levels it all does sort of make sense

maybe housing is a bright spot for the wrong reasons. it doesn't matter, because if you've been in these stocks, you've done very well. karen mentioned restoration hardware yesterday we've been talking about this stock seemingly forever. karen mentioned the short interest i mention that because the stock traded close to nine times normal volume today. i think many of those got squeezed out if you're fortunate to be in rh, today is the day to pull the rip cord >> we have a lot more "fast money" coming your way new deal drama between lvmh and tiffany. the luxury lowdown straight ahead. later, game on the sports betting stocks on fire as thnfe l season kicks off. should you take a gamble on these names? find out when "fast money" returns.

lvmh intend to file a lawsuit against tiffany, this a way after tiffany sued lvmh for trying to back out of the deal karen, what's your take on this turn >> lvmh has decided to counter sue. they seem to not be focusing anymore on that ridiculous

letter from the french foreign ministry that was suggesting they delay the mortgager that was absurd. now they're focusing on mismanagement, that tiffany has been mismanaged during the pandemic and that they shouldn't have paid dividends. i always come back to the merger agreement, which specifically allows tiffany to pay dividends. tiffany will be delighted to get arnault on the stand and seek to question him i expect that they will grant an expedited proceeding here. >> still no letter from the french foreign minister, by the way in all of this still waiting for that. >> i think they got a translated one, but not the actual. >> all right coming up, are you ready for some football? these sports betting stocks are.

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breaking news out of d.c president trump just saying there will be no extension on the tiktok deal. dan nathan, we were just reporting yesterday that perhaps they were going to look for alternatives to the u.s. unit actually being sold. what's your take on this >> you know, listen, i'm a little surprised, you know, to have such a turnaround in such a quick time period, less than 24 hours. this obviously increases the likelihood that we see a real bid from microsoft and walmart or oracle, whatever it is.

i just don't think there's going to be a deal i think it's odd that the administration is so focused on tiktok when wechat is really the company they should be worried about, the one that's competing with almost every major u.s. tech company here and abroad and operated under the communist party over there tiktok doesn't even operate in china. i know it's about u.s. data here but wechat is a much bigger issue. gaming today soaring on an upgrade today. wall street is betting on a big win. the nfl season kicks off in just a few hours from now catch the first game 7:00 p.m. eastern time on nbc. let's talk about the return of the nfl, what it means for the sports betting stocks. what does it mean for the season to start, for the season to play continuously >> what we know is that a majority of the sports betting that's done on so far in the

u.s. has been on football. in fact, if you look at september 2019, 69% of the wagers that happened that month were on football out of new jersey, where we only have last year to go on, i think 42% of the betting was on nfl last september there is an outsized amount of wagers thing that goes on aroun football the season is really critical for testing the demand in this market >> thanks for joining us can you talk a little bit about the relationship that draftkings and some of the other online betting companies have with the respective sports leagues. are winners being chosen now, at least ones that get so far ahead of the competition the addressable market here is

massive. >> look, i think you make some very important points. number one, the size of the market is 19 billion, which is a bit higher than most this is a story that we've been on or behind for quite some time what we know is that this is a gold rush. partnerships and investments are happening. what we don't know is what the key squuccess factors are ultimately going to be, whether it's brands, consumers and eyebal eyeballs, social engagement or technology when we overlay that over our coverage and what we see here, we expect all of the above to be critically important that leads us to draftkings which has captured a lot of eyeballs, has great technology and somewhat of a proven track record it draw us us to caesar's.

penn has absolutely been a battleground stock in our coverage they have yet to roll out their app. that is going to be soft launch they announced yesterday within the next week or so in one state. they absolutely have a brand and a platform that's hard to ignore and hard to bet against. seeing that technology and how producti productive g productive. >> draftkings is the place to be i think it traded up to 44.79 in the beginning of june. tested that level today. i think it's going to blow through it i think evercore just initiated with a $60 price target. disney would never do this in a million years, but it makes so

much sense for them to buy a product like this for their espn distribution it would be a tremendous asset for them, in my opinion. but i think these stocks are real the michael jordan news was important. regardless of what happens with sport this is year, these stocks are here to say. i think draftkings is the place to be. >> karen, you lean towards penn. >> i think it was a stock that was at 32. that gap has closed, so at this point i don't know i found sort of a cheaper much different spin on it which is mgm. i believe barry diller will be

very important in helping them with their online gaming >> the nfl season kicks off in just over an hour from now when the texans take on the chiefs 7:00 p.m. eastern time on nbc. ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis.

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check out tyson foods surging on news the company will begin to verify the sustainability of beef production on more than 5 million acres of cattle grazing land mike has the action. mike >> on an otherwise weak day, this is one of the stocks that saw a little bit of strength we saw that in the options markets too where it traded three times the average daily call volume and calls outpaced puts by about 8-1. buyers of calls are obviously betting that the stock could continue that strength and rally through the 66.5 strike price.

that would put the stock above 67 or so by the end of next week betting on continued strike on the back of that news. up next, final trade ♪ ♪ ♪ ♪ ♪ ♪ ♪

time for the final treaade. >> kc is giving 9 1/2. are you taking that action >> yeah. >> if you're playing with citibank it feels like you're getting 9 1/2 points i think trading at a discount.

jane fraser is going to do a good job and there's a lot of restructuring in the tank. buy it now >> karen >> i can't wait for the day where a female ceo is just referred to as a ceo that aside, my final trade is lowe's i think there is room even if they don't get to the home depot margins. i like lowe's. >> dan nathan? >> bears over lions in week one, mel. i'm going to go with viacom cbs here this stock acts really well for a stock down 30% on the year looks like it's breaking out >> guy adami we didn't hear your dogs tonight. >> that's exactly right because i have them sequestered. they were put in a separate room so you didn't hear rocky or

russell today. number two, i think dan is wrong about oracle i think you sell it here number three, i think houston wins outright. number four, you do this all while eating a mcdonald's hamburger which continues to rally. 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 "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job is not just to entertain but to educate and teach, put it in context call me 1-800-743-cnbc or tweet me @jimcramer if you had some cash on the sidelines today, today was terrific if you don't hav