different companies. >> honestly, it will be interesting to see the market's receptivity to the new names by the way, we have a full week away from father's day. >> i won't forget that's important one. >> not self-interest at all. that does it for "closing bell" on this friday everybody have a good weekend. "fast money" begins now. live from the nasdaq market site over looking new york city's time square this is "fast money" i'm melissa lee tonight's trader lineup dan nathan, steve grasso, victoria fernandez and james mcdonald a big call on bonds, chart master sounding the alarm in the treasury market, wait until you hear where carter worth sees yields headed. plus handful of big tech names well off their 52-week highs, any worth a second look later knock on wood when ark investor kathy wood is facing the truth, the one chart that may explain it all

we start with the big warning on the bond market, yield of the ten year fell to its lowest level since march third and chartmaster says rates will collapse even forther, cornerstone's carter worth is here to break it down, kick it off carter. >> you bet so hard to know of course. it's such an important subject and one of the biggest single securities there is, the 10-year treasury bond and where yield are, rates are, determined valuation for equities and mortgages and so much of this really matters and my hunch is this week this is not over and there's more down side to go we're looking as low as 1.25 we'll look at a few charts is that that much we're at 1.45 now. we'll ee four charts. the first is the channel that yield have been ascending since last summer. so when this was introduced, i'm sure others have their own

channels but in our work we've relied on it heavily you see the arrows, trying to make tactful calls in the tlt and treasure market. the issue is starting in late may, we approached the bottom of the channel once again, we didn't approach the bottom, rates went sideways they stalled and channel simply rising, they met, they bumped into each other, that's an arbitrary moment in time you don't get a balance in the lower end of a channel if you didn't come down to it, if it's come up to you nothing happens and indeed we've broken below. you can see that on the chart. the second chart, this is why this week we retired the channel with honors, so to speak the second chart shows why the channel is no longer relevant. that line is june 30 for rates to be in the channel, rates would have to go back to 1.82 in the next 13 trading

sessions that's not likely to happen. take a look at the next chart. that second line drawn, that's july 30. rates would have to be at 2.1 order to get back into the channel. by july 30, i'd say the odds of that are zero. so the question is, why down this is so unexpected for consensus, this move lower, i think it's -- it's -- it's got more to go and final chart, you can see this is arbitrary but it's really not the 1.25 level you see where i've drawn the line all of the moving yield was done in about 30 days, it was basically the last days of january to february. went from 1% to 1.77 all we've been doing since and it's already mid-june is slumping i think the slump continues >> all right, carter, thank you. see you in a few minutes on "options action. all right. in a world in which yield hit

1.25, dan, what's that look like in terms of the economy, does it mean we're in for a slow down of some sort >> funny, if you think back to the financial crisis, remember in 2010, '11, '12, the obsession was a double dip recession and gave the fed a lot of cover to keep the quantitative easing the way it was it's important to think back to that play book i know a lot has changed think of the taper tantrum in 2013 the ten-year yield treasury yield go to 3% but once they started tapering the yield went all the way down to 1.5%. they didn't start coming off the zero interest rate-bound until late 2015. so to carter's point, tim mentioned it last night, if the tapering is coming and the data is getting a little weaker we just had two hot cpi prints but had two disappointing jobs print, if the data is weaker maybe they taper they're going to sell the corporate bonds, maybe buy less

nbs is one thought and maybe rates can come into the 200 day moving average and ten-year yield down 1.15. >> just for those who didn't watch, i mean, i know some of you may not have caught "fast money" yesterday which is shocking. >> shocking. >> but that happens. tim seymour was making the point perhaps what we're seeing in terms of the slump in yield is the bond market is anticipating a couple steps ahead of the stock market but fed will taper because inflation is transitory and we get the economy reopen, they move to taper bonds go up >> sure. what happens -- the simple answer, we enter this in a defl deflationary environment. chairman powell said there's no inflation, is that bad for the markets? good for the markets? it was good for the markets back then so what happens now. you said is that indicative of a slump in the economy i think it's indicative that the

market is going to run higher because the fed will be accommodationive with squishy financial policy and no inflation. does that make you think that assets or certain risked assets can continue to move higher, the problem is, can value move higher we've seen growth into value what does value do >> in a world yield are 1.25, let's say, victoria, you would think this gives a massive reprieve for the tech trade, particularly the high-valuation stocks across the tech trade or across industries for that matter. >> you're right. so if you talk about the growth and the value trade well that should be a little boost in the arm of the growth trade. those are the stocks that got hit so hard when we saw yield move back up in march but the yield were moving so much higher because people didn't have faith in what the fed was saying they didn't believe inflation was going to be transitory and i think there's a consolidation of thought. the market now believes the

majority of inflation is transitory, not all of it but the majority you're going to get a smaller infrastructure package it makes sense the yield have come down a little bit what i'm hoping we see rates turn around and go a little bit higher as the base effects roll off and we do see a hand off of inflation from transitory to wages, to rents, things that are a little stickier. europe starts to open up and pulls our yield higher than way as well. i think we can see rates, yes, they might come down in the short-term but i think we'll see a steeper yield curve with the fed maintaining where they are and inflation expectation it's starting to rise again as we get to the end of the year. >> james, what's your take on a world in which yield go to 1.25. >> we've been looking at correlation with equities for some time with rates being a risk factor and we've seen a lot of buying interest in tech correlated with this drop in treasuries here, not just this

past week but really for the past month, it also coincides with new potential two-week highs, seeing it with the s&p, seeing it with the russell, close, and now nasdaq is get back up there. we've seen most pressure in the market around tech we will talk about big tech names later in the show but we're knocking on another 50 week high, this move in treasuries is an indicator in sentiment in terms of the equities going higher with rates having been a discussion about risk before. i think it's not necessarily reactionary but correlated and tech will benefit. >> what are the trades off low interest rate environment which the rest of the panel said are not positioned for you think of the stock market some of the things we're seeing, you mentioned big cap tech, what about cat or deere, cyclical names, you see a major rotation, those things are rolling over right now. we talked last night about home builders and think of the input costs we've seen in there.

lumber coming in 30% from those recent highs that seemed like a frenzy. those are the sort of supply and demand balances over my career that really fix themselves they tend to be pretty transitory i don't think any anything will be structurally changed about how americans live that sort of thing at the end of the day, if you look under the hood, we're going to get really comfortable with money going back to big cap tech we know the monopolies and management that sort of thing and will see some things over shot to the upside that over shoot to the down side during the throws of the pandemic sell off they may come to the level where valuation make more sense and they're not anticipating an overly strong economy. >> you're talking about the infrastructure plan that victoria spoke about if it's only 6 or 8%, real bridges, tunnels, roads, how can a cat, deere or uri really run. >> you're talking about the

entire run for those stocks were predicated on infrastructure bill packages. >> no i think it's real -- [ overlapping speakers ] that's where i'm perplexed when you look at rates rolling over cat should be sold. when you see the economy reopening cat should be bought that's where i am >> where are you on chemicals and materials. >> i'm still long on chemical names, but they're definitely flattening out to dan's point they're not at their highs. probably 15 to 20% off their highs but still 40 to 80% higher than what i bought them. so i'm sort of waiting for the reopening to happen to see what -- how gang busters the economy goes because that's what i think will happen. >> if the bond market already two steps -- in theory the bond market is two steps ahead of the stock market, victoria that would tell me it's time to rotate out of the reopening trade, time to get out of the

materials and cyclicals, what's your tame on where -- your take on where to be right now if the bond market is right zm zbr. >> i know people don't like to hear the word bar bell, but this is the exact environment bar bell portfolio makes sense exactly what steve is talking about. some of the moves we've seen really don't coincide with a reopening trade or rates moving lower. so do you have growth to even secular growth names even tech names, absolutely, you need them in your portfolio. does that mean you completely come out of your cyclical names not at all you need a honeywell and jpmorgan in your portfolio and cyclicals as well. this is where things will get really tough last year it was easy to jump in on a sector or theme and do well regardless, now the fundamentals will come into play, stock picking will be key, you really

need to pick your names and look at the balance sheelts but i think the bar bell approach works. >> james i haven't known you a long time but he don't feel you're a bar bell kind of guy. >> whoa whoa is that an insult. >> no, no, using a bar bell, opposed to investing style, two different things, but how would you characterize your portfolios now at this juncture in the market >> i agree with victoria you have to be very disciplined about analyzing the merits of individual security both in the context of its individual fundamental performance and the contechnostructural of the environment it pla context of the environment it plays in we keep knocking on two week highs with record after record set. we're in a unusual period of military policy so examining the metrics in a specific security, specific space and we're all growth-focused here at herculeans so we're analyzing security because i think there will be flight quality coming

into the fall and we see how the reopening actually performs. >> i think back to the post-financial crisis. i mentioned the obsession with the double-dip recession fear, but also global growth this was a rolling credit c crisis, we came out of it first then europe and then asia. if you think back to '15 and '16 we washington trying to normalize our interest rate policy we saw tons of volatility across every major asset class, specifically about china growth, that sort of thing. i think the idea we're just going to reopen and it's off to the races for a decade doesn't make a lot of sense. especially when you consider in 2021 we three peak to trough decline at 4.5%, pretty run of the mill if there's reason to sell soft, you sell the vix trade 15.5 today. it seems we could be ready for some sort of growth scare in the not so distant future.

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. welcome back to "fast money. the nasdaq handing in its fourth straight week of gains. that hasn't happened since january, index up 5% in just the past month no everyone is along for the ride handful of names well off their 52-week high so great time to play trade it or fade it kick it off with peloton 42% off 52-week high >> i say trade it. stock down 25% on the year here. listen, it's a little nuance, mel. i think you trade it into looking it right shoulder, it's about ready to make one last push higher, maybe you see 120 or 125 or so but then you want to sell it the company had a bad period of pr, the tread thing, mine went back sorry to say but great company, trading at a pretty reason able valuation.

>> grasso. >> i'm a fader of peloton. >> a smaller shoulder. >> but i think we've reached peak peloton i said it at $1.20, it traded off, to dan's point, might have a little burst but negative pr, what are people doing? going book gyms. it's going to be a hard sell i say fade this one >> next up, whopping 47% off the 52 week high for baidu. >> we're down 14 to 15% for the year, this is trade it for us. we like the longer term secular growth component they had great earnings, their guidance was really good i think they were 14 to 24% was the guidance for revenue growth for next year. they have the live streaming platform they're bringing on when you look at the advertising component and part of the business that's sticky where

they're managing company websites that grew over 20% so i think there's some runway because it is pulled back so far we go ahead and trade it. >> i'm fading. right now this stock is is so horrible i agree on a valuation basis if you expect mid to high teens eps and sales growth trading 16.5 times next year that makes sense but right now it doesn't act well, it's very heavy and some headlines in china are not particularly great so i am fading it. >> let's get to zoom, 38% off its 52-week high james, trade it or fade it [ muted ] >> well, if we can read lips. >> can i jump in. >> i'm going to go to victoria to straighten this out. >> so we're going to trade it. that's actually a different stance for us. during the past year we didn't

like things like zoom we saw it as a pandemic play but even in our company we're upgrading our zoom subscription this week with our new cio bob dahl doing a big presentation, we didn't have enough capacity we had to upgrade. as zoom backs more of the day-to-day business plan of companies going forward and not just a pandemic solution then it's opened up the runway no longer quite as volatility -- not the same growth but there is potential runway for zoom. >> james we can hear you know, what do you say. >> sorry about that. i think zoom is a ben factor of situation that changed an that has changed, everyone worked from home and it got a tremendous lift from that since late october since the vaccine announced, it's been ball downhill and i got to expect that trajectory to continue as we go back to normal an important tool and communication medium but was

getting the tailwinds of a situation that's completely changed. >> we finish off with qualcomm 20% off 52-week highs, grasso? >> i'm willing to give this the benefit of the doubt this is in the growth bucket rates are definitely coming in i think trajectory is lower for rates. easy glide path for growth, qualcomm is in that glide path, just broke out of hits declining trend line it's down basically for the year, but i'm willing to say trade this one. >> james >> we're halfway through the year almost and it's continuing to suffer, i think that relative to the tech sector, the computer sector, earnings look good, year-over-year, revenue look good, pe, earnings growth multiple better than the sector but is continually losing money, i think it will be a fade for some time. >> all right coming up, the options traders are doing a deep dive on a software name "options action" kick-offs off in a few minutes first a moment of truth for ark

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welcome back to "fast money." if you are in kathy woods archegos i woods ark innovation etf you might want to knock on wood, if you will, dan says we're coming against a critical moment for this trade. >> just look at the one year chart, down trend from 160 to 100 earlier in the week and had a really nice bounce, trading right at its 200-day moving average. purely from a technical standpoint that's a smoothing mechanism look at that chart it's a really critical spot.

yes it's great that it's over. that down trend but if it fails at 200 day we could be testing 100 again. we know tesla is 10% square roku teledoc. controversial names. high valuation high growth names. this is important from sentiment standpoint, it's not about name stocks, it's about companies that will change the world, that's what she thinks will happen but high valuation. >> again, it all comes back to interest rates so does this trade, grasso? >> it does when you look at the chart i was looking at the 50-week moving average and is the same as the 200-day moving average 10 it's stagge so it's stagger there right below and playing games, it does this a lot, it does look set up to fame but fail

to fail. if interest rates move lower you will see the bids dan pointed out. >> do they fit on the bar bell you. >> i think you can you have names like square that will do well going forward we think they'll do well like the credit cards will do well as part of the reopening trade. you have volatile names like tesla we don't own, we don't want to own it, you have to be careful, it comes to down to rate if we come to one and quarter on ten-year and it stays there then this is the opportunity to get in. i don't think it is. yield will go higher and we'll have a steeper curve and lot of these names will pay for that. >> let's get to the final trade, around the horn, james mcdonald. >> skin. on this vanity play. >> that was your fast pitch. victoria. >> oracle is my trade, the

catalyst is its cloud space going forward. >> dan nathan. >> yeah so large-cap farpharma i like fieds pfizer. >> grasso? fisker >> that does it for us on fast "options action" after this quick break. stay tuned stay restless, with the icon that does the same. the rx crafted by lexus. lease the 2021 rx 350 for $449 a month for 36 months. experience amazing at your lexus dealer.

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happy friday and welcome to "options action" i'm melissa lee live from the nasdaq site over looking new york city's time square we have a big store on tap, here's the lineup. >> which adobe is? a solid earnings going into the week or mud brick, carl will model it out for us, maybe even in clay. and tony zhang continues to rain on cloud computing plays which name he thinks won't strike twice. and plus