Making her last stand, raising rates for the third time this year and the fifth time since the financial crisis Steve Liesman was at the press Conference Reporter hi, melissa the Federal Reserve raising the Interest Rates by a quarter point, that is the highest its been since 2004. The fed forecasting three more rate hikes, boosting its growth forecast next year to 2. 5 in part because of coming tax cuts. It also lowered its outlook for unemployment to 3. 9 and continues to believe that inflation would eventually move up to its 1. 9 target. There is nothing flashing red there or possibly even orange. We have a much more resilient stronger banking system. And were not seeing some worrisome buildup in leverage or credit growth at excessive levels so, you know, this is something that the fomc pays attention to. But if you ask me is this a significant factor shaping Monetary Policy now, well, its on the list of risks its not a major its not a major factor reporter yellen said the tax cuts could provide some boosts to growth and productivity but stopped well short of endorsing the grander claims of president trump. At the same time she brought up her concerns over the deficit. She was generally optimistic on the economy and continued to endorse gradual tightening in Monetary Policy. Melissa, if its red and possibly not orange, it must be green thats the only color left on that rainbow, steve, in terms of the stoplights when she and the fed acknowledged that tax policy could provide some boost to growth, do you think that that was an acknowledgement that there could be upward risk to rates next year . Reporter i think thats right. Now, this gets into the question as to what the tax cuts do if the tax cuts end up increasing the supply in the economy, the machines out there, the factories, the total Square Footage of real estate space, if they end up increasing the total resources in the economy to produce stuff, it would not be inflationary and the fed wouldnt view it as such if it ends up increasing demand, then the fed might ultimately turn around and raise rates faster because of it i did notice there was no increase in the number of fed officials forecasting four rate hikes next year. That may change. But right now the consensus is 3, a few guys above three and a few folks below 3, but no movement hinting towards a faster Rate Movement next year steve, its karen how do you reconcile all the sort of bullish things with this inflation number when theres a lot of pressures, labor price. California, there are a lot of places where labor pressure is up how is it that inflation continues to stay here reporter umm, you know, how much time do you have, karen its a really a fascinating question i think it has to do with the Global Supply chain. I think it has to do with technology it has to do with amazon and cellphones it has to do with a lot of things that are out there. At the same time, were not recreating people, at least not very fast, anyway. So there can be a taxing of the labor pool out there at the same time that prices are not going up i mean, karen, think about it. We have never been in this modern era of globalization and of technology and had high inflation. Weve never taxed the Global Resources that exist i think the well could be a lot deeper than we think, which means we could grow faster, bring unemployment down, and still do all that with a relatively low inflation rate. Which means rates could remain extremely low for a very, very long time reporter you sound like a central banker rememb erbanker,a thank you, steve. Steve liesman. Bonds surged, rates plummeted and the dollar tanked on what investors perceived as a dovish if he ha fed. You know what all that means you hop on board and just keep on guy adami. Im a huge eddie money fan. Cant get enough eddie money, number one number two, do you just keep buying weve been saying that for a while. Im not blind to some of the things that i see out there. Tony dwyer will be on. 57 basis points. To me its moving much too fast in the wrong direction market doesnt seem to care. To answer your question, you stay with the course seasonality is playing a huge role in this on top of everything you just mentioned. What continues to work these deep industrial names that weve talked about seemingly for the last couple of years boeing, for example, look at that stock, look at their free cash flow, look at what theyre doing with their stock repurchase plan. Ive been wrong about this one for a while, but caterpillar is telling you the entire world is growing at a pace we havent seen in a hundred years. Janet yellen, show said nothings flashing yellow or red, if you look at what worked today, it was staples. People sold, investors sold utilities ahead of this meeting. Overdone its down 50 bits. Half a percentage point for the month. You could buy utilities off of this, you could buy retail the next speed bump on the year going into year end. Is it a speed bump . Were so close now with the conference having agreed to some sort of plan, it looks like we have infrastructure in the offing as long as it sounds like inflation remains low, we are set. Were on a glide path. It seems very goldilocks. Ive been skeptical of the tbt which on a day like today doesnt work for equities it does set up really well. The tax deal obviously will be great. The repatriation, particularly for the faangs, these dont adequately reflect in my opinion for a google, so many of them. Those are things as well im a little less optimistic on the infrastructure a lot of other things that are happening that are good also apply to the infrastructure names as well. Plus theres this tax, im not where they ultimately came out, about deductibility of new equipment. Is that still did that survive . I dont even know that i think it did. And to extend, if i wanted to hear some more eddie money right now, i would say the fed has upgraded their gdp forecast 4 10ths of a percent theyve pushed it even further they say were going to grow and the label market will continue to get stronger. Freeport mac broke through, a lot of stocks have been running up against sixmonth resistance. If you get deductibility of some of this equipment, you get into the mining space, you get into a lot more projects and obviously infrastructure those are the trades that have been working for a long time a lot of people have been underweight this part of the asset class. Meanwhile Oil Continues to chug along. I was thinking, when i said stock paradise, weve been saying stock paradise, stock heaven for a very long time. And so far, knock on wood, it has been the right call, to be long this market but what keeps you up at night everything the speed in which the market continues to go higher concerns me a great deal. The complacency thats measured in the volatility index concerns me this yield curve that again, tony dwyer will speak about, concerns me. The fact that china seems to be slowing down and the hsi has rolled over, bounced recently, concerns me. There are a number of things so you see the yellow light flashing or orange, whatever color you want theyre not a great judge of red, yellow, orange, green lights, historically theyve been miserable at it, so when she says that confidence is at a ridiculously high level. We saw this in Small Business confidence yesterday weve seen it in a lot of other Consumer Confidence readings we see it in the market. We see it in cash levels in the market we have retail guys that work for long only firms who say the retail guy isnt in the market yet. The institutional guys say cash levels are down. I dont know if thats negative i see that as a positive for me, the negative is, i think when chair yellen starts talking about the yield curve and the Business Cycle arent related the way they used to be, that makes me nervous that makes me think shes going to raise quicker when you say theres no sign of inflation, thats a dynamic effect shes going to see. Investors were also keeping their eye on the yield curve, which is the flattest in ten years or so. Many say this is a sign a correction is coming our next guest will tell us why those fears are overblown. Tony dwyer is chief Market Strategist at canaccord genuity. More importantly on the yield curve, the spread is currently at 60 basis points historically thats a tremendous buy signal credit accelerates when the yield curve begins to flatten to the degree its currently at it signals were years away from a recession even if it inverts over the course of 2018. When you look at this chart, every time you see one of these circles, thats the first time in a cycle that you got the yield curve to flatten to 60 basis points when you get those circles, 63 over 1,000 trading days. Wow first of all, thats very nice chart work by tony hes one of the top three chart people in the parthenon. I think we invite tony over come on over, tony of the three chart guys, hes in the top three can we get him a chair . There is one circle that was followed by a pullback so there will be volatility. There it is. Absolutely. What you see is the most recent one when you look at those long term charts, everything is up in a straight line. Youre definitively going to get pullbacks. This will be the least drawdown in any year over the last 90 years, under 3 . The last time it was even close was 1995 1996 opened up with a 4 decline from the middecember high, rallied up, and then you started to get into a little more trouble with big corrections our call is that youre going to have a much higher market next year but also much higher volatility. You can have both of them go up at the same time tony, when we saw janet yellen speak about the yield curve that you love talking about, she said theres no fear of it, dont worry about it, even if we invert, we have time to get ahead of it, did you get nervous at how cavalier she was, making that correlation and causation argument that we hear so many times from the fed, and then hearing about how the Business Cycle and the yield curve arent the same relationship as they used to be . I know that every time the yield curve inverts, you go into a recession, except for 1966, and you ended up going there a little bit later my guess is the fed probably knows that too why do they ever let the curve invert because every time they think its different this time its human nature. Why does credit accelerate when the yield curve runs the government comes to me and says i can only sell for 50 cents for a bottle of water, what will i do to the production of water ill double it i dont want to make less money. What do you think banks do, they accelerate credit. Once you invert the yield curve, that works on a lag. It kicks into economic activity. Everybody is like, oh, the fed was right, and it shuts down the credit i hear you on that, but they can accelerate credit, and if theres no demand for that, isnt that the argument, when things start to slow down, the sort of deflationary spiral . Ive said on this show, im always the big bald bull, ive always got the higher target youre definitely one side of that statement the bull, right you said it, not me so when you look at it, this is going to end so badly you cannot fix credit with exponentially more credit. That line has killed more Portfolio Managers than its different this time, because it makes you get out way too early, you miss the upside, by the time you chase it, youre doing it at the wrong time our view isnt that this is goldilocks for the rest of time. Its just that were in a situation where we can go on extended periods still historically, have the upside, and then when you start to see stresses in the credit markets, you can see and thats why its 2800 by the end of the year, well see higher in between. So this is important. You should look at our targets, you should look at our methodology. At 21 tax rate, it would bring it up to a buck 55 you cant do that until you know what the tax rate is tony, thank you thank you so much for having me and happy holidays, everybody. Happy holidays to you tim, what did you do today where weve had upside vol, you can take chips off the table by staying in these trades to me, i think about what the fed is doing, Steve Liesman referred to this i dont think people have price income four rate hikes i think there will be a reckoning when people start to do that. It doesnt mean you should run for the hills. I had to sell some things to pay taxes, which is a bummer sort of across the board i like everything that i own but today wasnt a great day for my portfolio financials, not so great the highest concentration, the biggest percentage 22. In what faang okay. But i want to own them. But you needed to harvest yeah. Okay. Still 99 long. Im fully allocated in the marketplace. I still expect retail to rally into year end. And the laggard of Energy Continues to golower quickly, tim mentioned freeport mcnamara. Copper got obliterate, xes went up, its up 15, 20 since. Coming up, cme getting ready to launch Bitcoin Futures. The chairman and ceo of the cme, terry duffy, will be here to tell us how it will all go down. Plus the next installment of star wars begins this weekend. Can it live up to the hype an under the radar way to find out how the movie will do at the box office theres a company that is up 43,000 . Move over, bitcoin well tell you the name and why it may not be too late to get in over cable for 17 years running. But some people still like cable. Just like some people like wet grocery bags. Getting a bad haircut. Overcrowded trains. Turnstiles that dont turn. And spilling coffee on themselves. But for everyone else, theres directv. For 1 rated Customer Satisfaction over cable, switch to directv. And for a limited time get a 100 reward card. Call 1800directv a wealth of information. A wealth of perspective. A wealth of opportunities. Thats the clarity you get from fidelity Wealth Management. Straightforward advice, tailored recommendations, taxefficient investing strategies, and a dedicated advisor to help you grow and protect your wealth. Fidelity Wealth Management. Welcome back to fast money. Target making a move to up its delivery game. That kicks off our top trades. A same day shipping service, will it help target keep up with walmart and amazon i think it will help them by the same token, target has lagged in this entire space. This is definitely a tailwind for them everyone had sold this entire space and sold target a little harder than the rest i think this should be a bullish feel for them. But i think its a macro basis this is the first time you hear real competition from the likes of a target with amazon. You see it with walmart, with other companies, where they have same day shipping or theyre trying to do different shipping tactics. This is a commodity. You can buy a shipper, you can create their own shipper i dont think any of these guys will create the competition for amazon but my kooky thought is amazon needs to buy someone like a target they have a relationship with kohls they have to buy somebody why buy the cow when you can get the milk free . Why does amazon need to buy a tart outside of whole foods, theyre going asset light. It makes no sense. When you say asset light, they want to dabble with whole foods, in trying to get a warehousing spot in close to city areas and i think when you look at a target or a kohls or even a macys, you get on main street, down broadway, in every city, in every state. I think that helps them. I think whole foods is more about being in the consumables market, in the food market, a place they need to be, constant transactions ahead, forget about bitcoin. Theres one stock that would have made you a millionaire if you had invested in its ipo. Well tell you the name. Im melissa lee. Youre watching cnbc, first in business worldwide heres what else is coming up on fast. May the force be with disney as it gets set to release its next Star Wars Film this weekend. But the box office may be in the pit. No well explain plus thought bitcoin was crazy this week . Just wait until the cme begins Bitcoin Futures trading this sunday well talk to the ceo, terry duffy, about just how big it can become news anchor downtown traffic is still bad. Expect massive delays. radio channel changing news anchor 2 all lanes on highway 50 remain closed at this hour. news anchor 3 the stats are in and this city leads with some of the worst traffic, with the average driver sitting in gridlock the equivalent of three days a year. For every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts, over the course of the week, to about 10 pounds of carbon dioxide. Growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to study and analyze the flow of traffic. Then, we will take all of that data and we use it to optimize the timing of lights, so that traffic flows easier and travel times are shorter. And sacramento is just the beginning. With advances in cameras, sensors, and network speeds, we have the ability to make cities smarter, and happier. What excites me about this technology is that were using some of the most cuttingedge machinelearning, and ai, to help solve the most fundamental challenges that cities face around the world. Who knew asphalt could help save the environment . lani and the possibilities are endless. Welcome back to fast money. The bitcoin boom continues as more exchanges jump into the market is the battle just heating up . Our bob pisani is live at the New York Stock Exchange with the very latest. Reporter it is heating up. Volumes have been modest but a bigger player is about to enter the bitcoin market cme will start their Bitcoin Futures sunday night, full trading on monday. Several differences between the two features apparatus the cboe contract size, one bitcoin. Its five for cme. A dollar per contract on the cboe, five on the cme, but remember, cboe is just one bitcoin while the cme is five. Margin rates are kind of similar. Cboe at 44 , cme at 47 . Hey, remember, nasdaq will be jumping in in the first half of 2018, well be covering that as well i anticipate the volumes on cme will be higher than cboe simply because cme is a much larger futures platform than cboe interactive brokers, one of the few Online Brokers allowing the trading of Bitcoin Futures, says they will now allow investors to short Bitcoin Futures on its Trading Platform up until now ceo Thomas Petterffy has not allowed shorting but he now says he will allow short sales because of the big premium the futures contract has over the cash market, and hes right about that. Its been about 5 , thats an unusually large spread but hell charge a hefty margin spread, the fee 40,000 for a short sale now, he may have moved the markets. The spread between the futures and the cash for bitcoin dropped to about 300 this afternoon thats a fraction of what it had been earlier so things may already be moving on that front. Back to you, melissa quite a change in position for peterffy bob, thanks so much. Lets welcome pterry duffy, chairman and ceo of cme. Thank you very much, and i want to thank bob for the great introduction, he did a great job explaining that. He absolutely did, he always does who do you expect the trader of the futures on the cme to be who do i expect the trader yes, the investors, who will be in the futures in cme institutions its hard to tell, melissa. Our contract, as bob laid out, is larger than cboes. Its a big difference attracting the retail participant i want to be cautious. The sec made a really good comment, you have to be careful of this product, its new, and theres no question about it so the last thing i want to have happen is participants that have never traded futures contracts before to enter into cmes markets and be trading Bitcoin Futures. Were targeting the more professional type trader and Institutional Investor mr. Duffy, its karen if we see 500 swings in bitcoin, can you imagine a scenario where you change your margin requirements as a result of big moves either way . Karen, thats a good point, and absolutely, we will change our margins if we see any activity like that as youve seen already, we already made a change in our margin from 35 to 47 on initial, then the Maintenance Margin will be a minimum of 43 . Thats even before we launch the product, weve already had to move it. So this is something that we pay a lot of attention to. Its what ive been outlining all along, karen, is the Risk Management protocols cme has in place. If in fact this thing moves precipitously, our velocity logic will kick in and the other functions we have as well. Do you plan on introducing a product that will appeal more to the retail investor, like a mini product for instance for Bitcoin Futures . You know, i think that is yet to be determined i think were going to do a wait and see, see how this contract trades one of the things youre looking at, a lot of these Brokerage Firms dont want to jump in and theres a reason, they want to be open interest, positions open in a clearinghouse they want to see a certain amount of trade. Until that happens, youre not going to attract anyone else we need to build some open interest, build some trade, and then the bylaws and covenants of certain brokers will allow participants to come into the marketplace. Terry, its guy, thanks for being on i know youre growing organically, but have you considered growing by acquisition . Coinbase has 32 countries, im not asking specifically about them, but is that a thought out there in cme land . Guy, right now im really focused, as you know, i like things that drop to the bottom line as far as targeted acquisitions go. This is a new product line for us so well keep this just to the futures contract were looking at things that we think can enhance our Customer Experience thats a big part of what im trying to accomplish here at cme group. Grow the institutional base, grow the commercial base and in return, go to the clients completely on the cash side of the trade, on bitcoin, i dont think its something that we have a great interest in. We dont regulate that today, although we have the ability, guy, which i think is interesting. With our offering, we had the ability to do audit functions on the four exchanges that bob pisani outlined at the beginning of the show. Thats different than our competitors do well be keeping a close watch on this. How big do you think this will be for cme, in other words how much money do you think you can make off of this, will this impact earnings, terry, will we see upwards revisions to earnings reports in the future melissa, we dont do anything just for the sake of doing it because its popular you know, weve had a big outreach from clients that get involved in this asset class to predict the revenues, im not even going to attempt to do it i want to see how this trades. If you look at the last couple of days, cboe traded 1756 contracts today, they traded a small amount yesterday its off to a decent start they have a little bit of open interest well have to wait and see how that goes. To try to predict what the potential volumes are in this contract, which turns into revenues, is really hard to do terry, ive got to ask you about this too, obviously one concern about a futures contract that trades on a product thats not regulated is what happens if somebody contaminattampers with exchange weve seen a denial of Service Attack for the past week or so is it possible, if somebody had a huge position in futures on the short side but they could manipulate the trading on an exchange to their advantage. Thats one of the things that i talk about all the time, our self regulatory organization, the process we have in place with our regulatory department, we monitor for this in all our asset classes, all our products. This is high on our radar screen, we have a lot of people watching this product. Well be looking for strange activity the representation of cme group is way too valuable, way too valuable to rely would you rather have a formal regulation of the exchanges . Basically your product is going to rely on the pricing of four bitcoin exchanges. Im sure the cme has Better Things to do with its time and money than to try to regulate the trading on four different exchanges, which weve seen in the past, exchanges do not respond well technologically to high spikes in volume. That really plays into a manipulators hands. Well, melissa, whats important here is, we do do very well with high demand, with high volatility, with high trade. So thats one of the things that we are very good at. And when you bring in a regulated futures market like cme with the distribution and the platforms that we have, that will help mitigate some of the problems in the cash market as well so, you know, they go hand in hand theres a reason why its called a derivative and people use both the cash and futures products here to manage the risk. So, you know, i see us helping mitigate some of the problems that are going on right now in the cash market. Do you own bitcoin, terry im sorry do you own bitcoin yourself what do you think of it . Sadly, no, i dont own it your guest the other day bought it at a dollar, wish i met that guy a couple of years ago. That was 2011, that would have been a good one no, i dont you know what, im fascinated by it, melissa, to be honest with you. Someone asked me the other day, what would i do with bitcoin i said, if i owned it, i probably wouldnt sell it, and if i didnt own it, i probably wouldnt buy it. Im not sure what that tells you, what do i think of the value of the product, other than i think were going through a major change in finance and people are looking at a whole host of different ways regulation is important to any product. And i think when you look at cryptocurrencies or anything else you trade, we continue to eevolved ive watched your show for many years, i know brian kelly has been optimistic. Well have to do a wait and see. For us not to miss it and miss potentially helping something unusual that could change the world would be wrong too i think were taking a very measured approach. And make some money off of it as well. Thats a key part, thats fine too well leave it there, thanks for watching fast all these years and well all be watching sunday night terry duffy, chairman and ceo of the cme. Bitcoin stock or not cme. Oh, not absolutely not we said it a while ago this is a cherry on top for cme. Weve talked about the Chicago Mercantile Exchange as an investment now for many, many years. Terry duffy does an incredible job. They trade i think currently at 27 or so times forward earnings. They probably have an 18 or so eps growth rate. Theyre the only game in town. In a lot of areas. I think this stock is a nonbitcoin stock. The fact that they have it now just adds to their value definitely the last runup in the cboe and cme cboe is up 70 year to date. Terrys done a great job, cme is up 31 year to date. I play overstock, im still one of these guys that was skeptical. After youve seen this last rage up, kudos to brian kelly, every time we talk bitcoin, we should say brian kelly, great job there. Overstock is up 52 year to date i believe they have the only blessed bitcoin offering i continue to be long. Ahead, the new star wars movie premiers this weekend, we have the latest installment. Weve got the star wars channel check. Plus everyones been caught up with bitcoin. One stock is soaring, quietly passed a majormilestone. Well give you the daylights we are the driven. The dedicated. The overachievers. We know our best investment is in ourselves. We dont take no for an answer. We fight for what we want. Even for the things that were once a given. Going to college. Buying a home. And not being in debt for it for the rest of our lives. But were only as strong as our community. Who inspires and pushes us to go further than we could ever go alone. Sofi. Get there sooner. Welcome back to fast money. Its a big week for disney, the media giant expected to announce a mega deal with fox tomorrow and releasing its biggest movie of the year. Julia boorstin has the latest from los angeles reporter hi, melissa were expecting the announcement of the acquisition of fox entertainment assets at a valuation of 60 billion fox shareholders will hold 25 of the new disney, giving the Murdoch Family about 5 . Today fox shares fell by about 4 the stock is up nearly 2 in after hours trading. Disneys shares are also fractionally higher. With this deal, disney will get International Exposure with star in india and sky in Europe Disney is continuing with the acquisition of the remainder of sky. Disney is pursuing a stake in hulu with this deal. Theyll get National Geographic as well as the movie studio with franchises including xmen and fantastic four. Disney will get distribution rights for the original Star Wars Trilogy and the prequel trilogy, valuable films for the disney app, launching in fall of 19. Star wars is the focus, the last jedi hits theaters this weekend, expected to be the biggest opening of the year, up from force one the film is already fandangos top preseller of the year. This is a powerhouse for Disney Studio as well as the star wars lands opening in 2019. Thank you, Julia Boorstin from l. A lets go to david steinberg, david runs whats called the zeta discussion index and it has been a leading indicator of the success of movies on the Box Office Thanks for being with us great to be here, im a fan how exactly does this work . We track 2 billion unique investors visitors a month and feed that information into an algorithm that allows us to know trends. We can tie it back to individual identities for some of our clients and our data and marketing cloud. As it relates to this stuff, were looking at the big pools of data. Is it just the frequency with which for instance last jedi is mentioned or do you have to colocate positive words around it or negative words for that matter yes so we do positive indication, negative indication. Gross numbers of people. For example, 42 Million People were commenting positively on the word star wars through articles globally, which is up 50 from the same ten days leading up to league of justice and thor in november. Based on what youve seen for last jedi specifically and other star wars movies, can you tell us if its going to be better than the others its a tale of two cities according to our data, it looks like it will be well below, probably 33 below bthe force awakens but well above rogue one. We think it will come in towards the lower end of the range of 190 to 215 we think kind of 190 to 200. By the way, if you look at it, we had two times the number of comments on people positively talking about star wars versus, for example, league of justice which had very low comments we predicted a very low open box office and thats what happened so is this just a u. S. , are you just gauging u. S. Viewers or worldwide . 2 billion people, its hard to be just u. S well, okay. So people ask me that all the time 17 Million People in the United States have commented or read articles out of the 42 million the 2 billion people is global, although as you would guess, the vast majority of u. S. Population kind of hits one of the 4 million publisher websites we partner with well see if your checks hold up great to have you with us, david steinberg. Tim, what do you think, youre in disney. The halo effect for disney is important too. Think of the assets theyre goi getting, the fox studio. 8 1 2 times for that, you have to dispute aimpute all of that. This kind of put a floor under the entire sector. Disney is paying for this deal with at least a fair amount of equity as currency in the deal and by the way, this deal just got 15 cheaper to them. For disney shareholders this is an even better deal than a month ago. Discovery communications i think is interesting not that i know these people but chip gaines and Joanna Gaines love them theyre doing the show, theyre renegotiating apparently now with discovery, that post the scripts contract they had companies. A disaster, by the way if youre looking for undervalued assets that might have some upside, i think thats it tim and i have talked about viacom for a while which quietly is close to 30 now when the story first broke about disney, we mentioned viacom i think cbs is worth a hat tip there. If you look at disney, its been in a range, lets call it low 90s to about 112, 113. Long term, im positive on the name, content king i think youll see maybe a 5 move lower before it ratchets higher ahead, janet yellen calling bitcoin a speculative asset. That got us thinking, how should individual investors approach speculation . Hmm. Our very own guy adami will give you lilea tt speculation education and guidelines for investing. Its all yours. Wow record time. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. Looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Bitcoin at this time plays a very small role in the Payment System it is not a stable store of value. And it doesnt constitute legal tender it is a highly speculative asset. That was Federal Reserve chair janet yellen after our very own Steve Liesman asked about bitcoin earlier today. As investors everywhere pile into speculative investments like bitcoin, it might be helpful to lay out what speculative investing is and some dos and donts. Guy adami is at the plasma what is speculation i happen to think any time you buy anything, youre effectively speculating. But where are these investments on the risk curve . You have to identify where you are on the risk curve. How old are you, how much risk are you willing to take, how much of your portfolio should be in these speculative investments. I dont think it should be less than 5 if youre going to do it i also dont think it should be more than 15 . Mike novogratz was on the other day. Im sure his Risk Appetite is greater. For folks playing at home, i think it should fall into that range. Also when something is highly speculative like bitcoin, i think you have to be prepared to lose it all. So lets see how now you identify spot a speculative investment. Well, some companies have great track records. Apple, for example, great track record disney, for example. So they tend to be less speculative. But on a speculative front, limited track record inexperienced management maybe these folks are just getting into these things for the very first time. And their future realizes on a binary outcome what is that telling you, what industry fits that whole thing lets take a look. Sets up well in biotech. Juno therapeutics is a name weve loved for some time. Weve said its binary, because theyre effectively betting their ranch on their therapies which i happen to believe work and the Science Behind them works great. But youve seen over the last week what happens when you get a hint of bad news so this is a chart of juno, you can see the trajectory, but youve also seen over the last couple of days what can go on wrong. Hopefully ive done you a Little Service on how to spot a speculative investment thank you very much, guy. Tim, youve been known to speculate. One of the things thats important for me on speculation is, is there price discovery, and how much transparency is there in the price discovery process. Meaning what . When i think about bitcoin, i think theres actually not a lot of that. Not because you cant get a quote on it, but because, first of all, for a lot of people, theyre settling three or four days later, when their Bank Transfers the money, and by that time they have significant settlement risk, they cant then trade that theres a lot of places where youre going different price quotes one thing that will change the way crypto is traded is when you have a lot more Price Transparency and discovery what is the most speculative investment you have made bitcoin for sure. How did you determine how to right size that position in your portfolio . Of course now, too small. Guys 5 to 15 i think is enormous, enormous for a speculative part of the portfolio. But, you know, a guy like novogratz is comfortable with that kind of debt. Not only do you have to be prepared to lose it all, you cant buy it on margin i know for Institutional Investors, the cme, cboe, you can do it on margin there. For me, i would never do it. Some people dont speculate, quote unquote, in their portfolios at all, and you have to risk leaving that on the table, you cant outperform the indexes unless youre speculating. Im with karen i think 5 is a bit much i think to guys point, any time you make a bet or place a bet, thats what i call it, in the equity markets, it is speculation. Coming up, want to be a millionaire . Of course you do if you invested 100 when that stock on the screen, the ipo back in 1980, you would be well give you the name. Plus oracle is on a tear this year. But something in the chart suggests the run could be coming too end. Weve got all the details. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Wifiso if you cant live without it. T it. Why arent you using this guy . 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The stock is now trading at 172, up nearly 44,000 on a split adjusted basis bitcoin aint the only thing going up so with apple up 49 this year, the market cap moving closer to the 1 trillion mark, is now the time to buy, tim look, i think you can own apple, you can own it on valuation, you can own it in terms of the refresh cycle, you can own it because of the services im more bullish i think than many are if you think about apple in terms of its cycle, for me apple is interesting the reason i got into apple was because of itunes, i saw they were disrupting the music industry, it was before the hardware was disrupted by them apple, you get in on this stock. I dont own it. Its interesting, i think its 7 too high, which is ridiculous in the context of the Value Creation there, right . So maybe 43,840 were you impersonating yourself yes, kind of. Spot on i had no idea who it was. So now i kind of feel like in that scheme of things, looking from that perspective, yeah, its probably good to own. Yet i dont own it oracle set to report earnings after the bell tomorrow mike khouw is in austin with more mike well above average options activity in oracle today, this is a name that moves 5 on earnings what we did see was a lot of call selling it was the march 55 calls, a block of 7500 of those sold at 55 cents that basically is an indication that options traders are trying to take advantage of the fact that options premiums are elevated and the stock is trading at an alltime high. Its really a bet that its not going to break out to new all time highs on this particular earnings as you notice, mike is not on the death star anymore not today were not talking about last jedi. He escaped mike, thank you. See you tomorrow i liked it. For more options action, 30eck out the full show friday 5 p. M. Eastern time of course he would final trades up next well, its earnings season once again. Yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. For every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts, over the course of the week, to about 10 pounds of carbon dioxide. Growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. That data runs across our network and we use it to optimize the timing of lights, so that traffic flows easier and travel times are shorter. Who knew asphalt could help save the environment . Time for final trade, tim. Uh, yeah. Waking up. Thats conviction karen . Yes it was up today, but not a ton eem, i think theres a lot of room to run in economies around the world. Ross, do you remember your final trade . Yes avis budget took out recent highs. Guy tim is playing hurt target is absolutely breaking out to the upside. An im melissa lee thks for watching. See you tomorrow my mission is simple to make you money. Im here to level the Playing Field for all investors. Theres always a bull market somewhere, and i promise to help you find it. Mad money starts now hey, im cramer. Welcome to mad money. Welcome to cramerica other people want to make friends. Im just trying to make you money. My job is not just to entertain but to educate and teach you so call me at 1800743cnbc or tweet me jimcrame can it really be true, be happy abou