What are we doing . Interesting but smart leading the feds beige book. Leading with beige. Check in on regional economies is telling two very different stories. How we are adjusting to the trade war. On one hand the beige book highlighting a retail chain that raised prices on furniture but is considering reversing the price hike because consumers arent buying it meantime, in cleveland manufacturers are feeling the pain by cutting overtime pay rather than laying off workers things looking up in philadelphia and new york. This is like a choose your own adventure book choose your own beige book. Are you allowed to do that . Is the economy headed down the path of new york and cleveland or are we Holding Strong like philadelphia and minneapolis . Gia dam uy adami. Ill be optimistic. Things look okay, not great. Thats reasonable. I think that along with the news out of hong kong where things have been tapered down for a couple of days, thats encouraging. The market is up 3 4 of a percent, 8 10 of a percent im still not convinced of anything i dont think anything is fundamentally changed. I think the concerns are still here despite some of the news were talking about now. I still think the market is headed lower with the fits and starts along the way if you want a bullish signal, ill give you one. The iwm had a decent day today we have flagged 145 a number of times as a line in the sand. If you want to be bullish in my opinion you use that as your barometer. As long as the iwm stays above 145, you could theoretically be okay in the swp. Youre presenting the optimistic case, you are not an optimist, you are a pessimist. Maybe not that deep actually. Wolf in sheep clothing. Is that right sheep in no, youre a wolf im a wolf in sheeps clothing thats the one. Scary. Karen let me make sure i understand. Yes. The beige book. Can you explain what the beige book is . A little bit. Survey that the new fed president semi, it doesnt come out all the time. No, its not like its every week. Im wondering, were some of the most recent trade issues felt in the beige book data that were just seeing right now . No. Like last weekends tariff increases, no. That makes me think, okay, its a little bit backward looking. Im very concerned about the trade situation and its effects on the u. S. Economy Going Forward so, i mean, there is some stuff to like i like autos seem to be modestly higher there was some commercial real estate that was actually a little bit better. You know, we said that other bit of data, was that yesterday the pmi . Yeah. So i dont know, im starting to see some cracks im very concerned and im not that optimistic about a short term resolution about trade. That makes me todays nice and the market bounces because im long. You dont believe it . Im going to be long and lose money. This is a glimpse into your psyche. Really it is. This is something i probably dont want to know. Very deep. But so a glimpse into the beige book folks, for folks wondering why we havent done this in 13 years and decided to do it tonight, im trying to figure that out as well. Look, its a real time measure of where the feds regional districts are seeing Economic Movement in consumer, manufacturing, Different Services and you get an overall read on the economy. The reason we should be talking about it, just yesterday, monday, its been a holiday week tuesday we had an ism that printed back to three year lows. It was the lowest weve seen since the worst of the financial crisis its important to take the temperature of where the economy truly is where manufacturing or the ism looked reasonably poor what this beige book showed to me is that you have, first of all, obviously regional strengths and weaknesses but overall Consumer Spending continues at a moderate pace theres been nothing notable in terms of a pull back the worst kindof story in here what i read with regard to housing, that to me is more structural because of Inventory Services this isnt growing as briskly as people would like to see despite the fact that things are growing. Half full my psyche. Thats a dig to me. Youre 3 4 empty in fact. This is in from our executive producer who says the beige book is taken before on or before august 23rd. On or before august 23rd okay. Thanks, kevin. That leads me to think, pete where do i live predisposed to be optimistioc you love what minneapolis had to say. When you hear cleveland talking about cutting back on shifts and cutting back on overtime and this is all the way through august 23rd, does that make you concerned that perhaps, perhaps this will filter to the u. S. Consumer which has been the engine of strength yeah. I think you have to look at it that way when were seeing whats going on, obviously the minneapolis numbers look fairly bullish. That was the whole point of this thing is looking at where is it good, where is it not good looking at minneapolis, what people dont understand is youre getting a huge swath of S P Companies literally within 50 miles of the S P Companies. You have a huge number of s p 500 companies. Target to polaris, you can go through a long list of these companies. I think thats probably part of my bullishness sometimes or whatever it comes because of that, what were seeing it gives you the diversity i think the interesting thing is so far the consumer has held up and all youve got to do is look at this whole earnings season, you look at walmart, target, even michaels stores, its really impressive to see how strong the consumer remains. Now is there weakness on the horizon . I would think however long this trade war goes on, i think it will continue at least through probably at least december or further, thats going to start being an issue, i think, and slow down the consumer in some way, especially in the areas that are so positive like were talking about now. So as the markets remain a few Percentage Points away from alltime highs whats the saying, markets dont give you market dont give you that long to buy the low or in this case sell the high are we there . Yet they have. Yet they have. No, im not saying im always right. Thats my saying i didnt say it was a penny earned that doesnt make any sense now either. What would you say now . I still think look, i have to own up to it and say, listen, the market has been at these levels for quite some time i guess it would indicate we would see a breakout to the up side but, again, when i look at the world and see there are a few reasons to be bullish in stocks, there are a number of reasons to be bearish. Just the way i look at it, the bad out weighs the good. I understand that the markets hung in there extraordinarily well i get it in terms of the consumer and Consumer Confidence quickly, in my world, all Consumer Confidence is is an overlay of the s p 500. The market does well if people feel richer. People feel richer, they spend money. Look at october and november how quickly people stopped selling money. It coincided with the market going down 20 in six weeks. One thing that makes me start to question how long this is going to last, when i see gold and silver lowering including today, we rallied back up almost erasing everything from yesterday. Look at gld, sld, look at whats going on in the precious metals. We continue to see more and more paper saying they arent done yet. They still seem to think there was more up side. As you mentioned, stocks pushing higher our next guest says there are three charts that could tell us where we are next. Lets get to mark newton of Newton Advisors whos over at the plasma what are you looking at . Lets look at three charts that will put this into perspective. We still have the ongoing range for s p. This is something that has been guided the up side and down side for this market over the last month. Despite all the issues and worries, policy uncertainty, trade war with china, increasing signs of a slowing economy the market has been incredibly resilient. Only 100 points of alltime highs. This is something in the last couple of days weve seen a little bit of improvement. You saw concerns about chinese tariffs. S p only got down 50 of the prior. It didnt get all the way back down breadth has started to get a lot better today we saw four to one positive breadth versus yesterday it was three to two negative we were a lot more positive on todays strength than we were negative on yesterdays weakness im going pessimism. Guy adami eluded to the same thing. That sea of pessimism is obviously what can help the market actually move a little bit higher into the first part of september this is the other one, technology the largest sector in s p. This is about 22 of the s p right now. So its almost 1 4 of the s p is technology until we see some evidence of technology breaking, this is still going to serve as a tail wind for stocks. The stocks close at the highest level since late july. We see stocks like western digital, seagate hit the highest digital. Intel had a move facebook started to claw at the bottom this is the key to the whole puzzle which is apple of course. A trillion dollar market cap stock. This has formed a very interesting technical pattern which is a symmetrical triangle on the heels of a big rally. 80 of the time after a big run up these triangles oftentimes are resolved by a movement to the up side, not the down side so my thinking is its a huge constituent in the xlk obviously the s p, the qs, right now with charts looking very bullish on apple at least for a breakout to the up side, i dont want to be betting too much on the down side just yet you want to see a break in technology you want to see return to that pessimism turn to optimism, this hong kong could be it thats a key resistance. We might get up to 3050, 3075, thats my target i expect sentiment will get more and more bullish for now, you know, its really right to bet on this 2940 being exceeded in my view. 2940. All right. Thats almost where we are right now. Right still a little bit higher mark newton of Newton Advisors tim, paul hickey said weve been at or around 2900 up and down from there. 25 sessions in the past month. Yes so is that are those charts convincing enough to you to say, yeah, well go higher . Well, i think what marks pointing out is if youre drawing that trend line off of the lows, despite all of the volatility, to be clear, this 150 poimpt range on the s p, theres been a lot of volatility theres been a number of days that have been plus minus a number of days ultimately i think if you look at where the market has digested the yuan, dollar, yields, it didnt break out, stayed at 147 on the ten year, i think thats bullish. I think sentiment which had gotten certainly a month and a half ago was way too bullish, certainly overly corrected to the down side. I think the risk is the up side. Youve been beating up there 11 times you failed at 2940, thats bullish. Talk about apple. So im not a macro trader, but i am long apple and, you know, im nervous because i do think theyre somewhat in the cross hairs of trade, however, i do want to own it im willing to ride some volatility which youve seen we may see more. I believe in the evolution of the story and i want to be there for 5g i dont know when well really start to see that going, but im not going to be good at selling it before then and hoping it trades in front of that. Im happening on and nervous but i want to be long. Look, i think the bull case is you understand the president has the market i guarantee he watches it all day long hes laser focused on it if it gets to a certain point, hes going to do whatever needs to be done to get the market higher i think thats part of the bull thesis i think thats legit we looked at a chart that looks like its breaking out at the up side we had b. K. And braxton worth talking about the megaphone. You can look at the charts and have two different outcomes. I look at the chart. Im predisposed to be negative ive said that from day one. What can go wrong will go wrong. I look at all of the headwinds the vix at 17. 5 is too cheap. Coming up, slack getting whacked in the after hours the companys Conference Call is just getting underway. Well break down the big headlines. Later, high risk high rewards. The booming cannabis industry. Pot stock folds are betting on another big breakout well debate that ahead of tonights big premiere 6 p. M. Eastern time were live in times square much more fast money after this do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. By the way, shes the it wasnext mozart. G day. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Hey. You must be stevens phone. Now you can know whos on your network and control who shouldnt be, only with xfinity xfi. Simple. Easy. Awesome. Welcome back to fast money. Weve got an earnings whip for you. Slack fell tumbling after reporting lipton is on in palo reporter thats right, melissa. To give you some idea, Morgan Stanley puts slack at 20 on a growth adjusted basis. So slack really had to come out and justify that pricey premium. It came up short shares are plunging. About 14 in the after hours, 15 now. Within striking distance, just 40 cents above that direct listing or Reference Price of 26 a share. In that joining other newly public unicorns, uber and lyft in their post ipo slumps the call is just getting underway it started with founder and ceo Stewart Butterfield. He said the next five years will be very different because they came out of the gates with a near perfect market fit but over the years theyve begun to see real Product Market fit for Larger Enterprises he says that they saw win after win from some of the Largest Companies in the world now butter field also calling out one use case that uses office 360, a customer, but he notes that that Company Still chooses to use slack for communication. In talking about this, hes speaking directly to some of the biggest jitters and some of the biggest concerns around slack and that is competition from Microsoft Teams and slacks ability to win paying and big enterprise customers the company saying they grew paying couples by 17 year over year to 100,000. Slack ceo and founder Stewart Butterfield will be on dont miss that. Deidre bosa in San Francisco on work which is a ticker for slack. For them to say, oh, if the customer uses windows 360, still uses slack, i mean, that would be a huge concern. I think it is a huge concern. Its something ive voiced many times about this company because of the fact that my concern is theyre going up against the biggest of the big who can really get after them and they already have matter of fact, microsoft already has 13 million daily active so theyre already going in front of the competition. I just look at this, mel, as this is going to be a brutal competition. And weve seen this go on with snap, with twitter, with all these various instagram and all of this stuff. Its amazing how much competition is out there i look at this i love that they have growth Revenue Growth is great. You look at the weekly users and microsoft is really beating them badly. I think when you look at that, you have to say it looks great for microsoft in my opinion. For slack, theyre still losing money. When are they going to make money . This is like uber, lyft, some of these others show me the money. When are you going to make money . I dont know that theyre on the path to make money. Especially when youre looking at the premium compared to sas peers. Thats the problem, price the Revenue Growth is great although the rate of acceleration is slowing. We see that in many other companies. Its just a question of valuation. This market is really not theyre not going to give you the break that you would have had maybe, i dont know, a couple of months ago these i think we just saw a headline of sales and marketing going up in the second half. So theyre going to lose a little bit more. I dont think youve got to it should be down a fair amount because the valuation is just too high. Lets get to palo alto. That stock is also lower josh lipton has more on this josh reporter lower but well off the lows they had been down a whole lot more i did check in with a couple of analysts two issues they flagged as a concern here one they would argue the ceo took over 12 months ago. Hes been making acquisitions and focused on free cash flow. That did miss by 25 million. If you look at the product segments, product as a segment, thats legacy, on prem, fire wall, hardware, software, 306 million, that was a miss as well he was sort of laying out his strategy for this company. Hes telling analysts, listen, almost every customer he meets is on the way to the cloud he sees this growing strongly and he sees big opportunity for Cloud Security thats why hes making acquisitions he announced another one, i. O. T. Company called xing box for 75 million. He intends to build the best platform out there hes thinking about this company and be sure to check out the interview tomorrow on cnbc on squawk on the street i. O. T. , internet of things. Palo alto continues to take share from other firewall vendors. In a world where we were talking about the multicloud vendors, microsoft and google being so dominant and i think going to be beating up continually, i think theres a fire wall between those guys and these guys in firewall space i think its way too specialized. I think they continue to fly in this vein. We have a market flash. That stock is plunging in the after hours session. Meg terrell has the latest. Mallenckrodt is down. Theyre restructuring and has hired the law firm latham and watkins and Alex Partners to advise it. This is a report from bloomberg saying that they may choose to seek bankruptcy protection here if its legal liabilities arent manageable this has to do with the opioid lawsuits that are happenin around the country right now its one of several Companies Named in all of these lawsuits more than 2000 of which have been consolidated in a federal kasen terd case centered in cled already under tremendous pressure over the last year. If you go back even five years the stock was at 120 its now creating at about 2 down a lot in the after hours. This report saying it may choose to seek bankruptcy protection, mel. Weve reached out to the company that declined to comment well bring you any more that we get on this. I think a couple of days they drew down their last Credit Facility so they were really reaching in terms of liquidity meg, how Many Companies are still viable, shall we say, that are swept up in the opioid lawsuits. Reporter thats a really important question this encompasses companies that are as large as Johnson Johnson which is incredibly healthy to other companies that are facing a lot of debt lik Endo Pharmaceuticals and teva which is bigger. The companies are watching their bonds very closely and saying they are in sort of dangerous or scary territory because of these potential liabilities but, of course, it is also very hard to tell what could come in this situation. There is a trial thats set to start in october and it sounds Like Companies are trying to avoid going into that trial. We know that endo and allergen settled just with those companies in ohio. It looks like mallinckrodt is trying to do so as well. Guy im somewhat reluctant to talk about this. I dont know what the enterprise value of this is now, but the market cap is probably after this move a couple hundred million. 150 million. 150 million. Lets put that out there number one, number two, the Short Interest in the stock has been seemingly growing every day. The shorts have been leaning into this. Tomorrow is one of those days, again, i have no idea where this stock is going tomorrow is an event unless you think its going to zero, shorts will cover on the back of this i think the Short Interest is probably close to 60 . Again, no idea but ive got to point out the huge Short Interest and my sense is this is what the shorts were waiting for. Should we be worried about Johnson Johnson . I understand Johnson Johnson is a much bigger company, deeper pockets, much more diversified business at the same time as the bankruptcies momentum. And theres precedent being set. When we think about the last settlement where it came in significantly lower than people thought it could be, they didnt admit, they certainly said in other states its a clearcut case i think it is state by state and i, therefore, think right now Johnson Johnson has a very different fate than the other companies. Mallinckrodt trade, 32 cents on the dollar. Before this. Wow maybe it could go up. Equity goes away. They were buying the 3 1 2 calls, 10,000 of those traded today. You know why its brilliant actually. If youre shorting and shorting and shorting, what a great protection youve got owning the 3 1 2 calls against your short position to the down side and a move like were seeing today. Very smart trader up. Up next, hot spots seeming to close down. Three global hot spots cooling well debate this. Later, looking good. Pbh went soaring today were digging in when fast money returns ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. Welcome back to fast money. Stocks rallying today in part thanks to things that happened off our shores hong kong withdrawing an extradition bill the u. K. Clearing a major hurdle to prevent a no deal brexit. Argentina containing capital controls these global hot spots appear to be cooling down a bit. Is this an all clear for investors. All clear well, for these extraneous all clear im not throwing up youre all clear. We learned that about you. Weve eliminated some of these extraneous concerns. We have we have. But i think theres still a lot theyve got left to negotiate. Thats something that will hang around as well its interesting i brought it up earlier and ill bring it up again. When you see a market that goes up 200 plus points and you see gold and silver and different areas in the market, we have a great move in oil. I dont know how much that was covered. Up 4 , thats pretty big on a wti. Back over 56. We got a nice push there as well i hate to be the guy to say all clear so im not going to say that i feel more comfortable probably but i dont know i would say, you know what, its time to go in like a bull. All clear is a horizon call how long is it all clear for tomorrow. Well all clear has been the last two weeks of investing in germany over the u. S. Right. Investing in emerging markets over the u. S before last nights news and even in fact with a dollar getting stronger so to me you have more room on these trades i dont think you have a ton of room theres no way to call all clear except for the fact as we said last night we spent a fair amount of time calling hong kong, chinas options and gaming and all the collateral damage. I do think this is their way of squaring this away ahead of a very important event in china on october 1st. You do have room here in the back drop where the dollar maybe in the short run was over bought. Which ems have more room . If you look at latin america, brazils been outperforming. The currency there has gone to the abyss and looks like its found stabilization and is in emerging markets more than 50 of your trade is currency so i would take you there. Let me ask you. Do you think this is enough that the extradition bill being is that enough to calm the protesters it doesnt seem like it. The rhetoric doesnt seem like that way. This was something that could have been done a month ago my sense is that there was an understanding that this was going to mollify, if i may, the biggest part of the outcry, and i think in the short run it has. It doesnt change anything, although i dont think hong kong was any different five years ago than it was today. I dont think it was free. The protesters put up on one of their chat rooms, two out of five they got two out of five of their demands. Yeah. Is that enough . Since then last night this was going to be rectified sooner rather than later. It wound up being less than 24 hours. Well, in part less than 24 hours later. Again, i dont think anythings today things look better tomorrow the world could look a lot different again. I think thats the environment we find ourselves in we continue to be a tweet or two away from being up 500 dow points. Who said two out of three eight bad . Meatloaf. Bat out of hell. Sing it for you. Im glad i know that useless fact now up next, starbucks getting a bit burned today after the Company Slashes its outlook. Later, we are gearing up for lululemons results. Why one options trader will stretch higherft aer reports fast money is back right after this welcome back to fast money. The stock jumping for pvh. On news that the ceo purchased roughly 10 million worth of stock. Also worth noting, pvh owns Tommy Hilfiger and calvin klein slachd the revenue forecasts so is this a sign that theres a bigger turn around ahead for the stock. Karen, you pointed this out today. Hopefully there is. 10 million is a lot also, its a very significant increase in his position this was almost a 50 increase he now has 30 million worth of stock. So that is really significant. Stocks obviously up a lot if you look at where its traded, if you look at the pe of this stock, even though they guided it a little lower, the expectations were so far below that that that was actually kind of a big beat and here with the pe in the high high single digits, its well below its historical average if you didnt know any of this other stuff, the stock here, i dont think, is particularly expensive. Does this attract yeah. I love driving into dangerous, you know, ugly situations. Really . What has the trade war meant for them in terms of their uncertainty. Right. Uncertainty it has priced in uncertainty already and, you know, they have a lot of exposure in Department Stores thats been a bad place to be. All of that may be priced in here. Carter worth is one of the great technicians. Pantheon. He would point out the low in the beginning of 2016 in this name was roughly 70 i encourage our viewers if youre watching do a little homework and see what the recent low was. You have a huge for a double talbot tomorrow. On the back of which is valuable and reasonable not that it matters, but this was 170 stock basically this time last year so i think you have a lot of things lined up for you if you think the moves going to continue to the up side not unlike what we have seen with j. W. Nordstroms, which has surprised some people to the up side as well, melissa. Interesting, guy. I would agree. I would also say if youre looking longer term, not just the next three months, six months, pvh right now, its a good reason why he bought 10 million worth of stock i think hes thinking to himself longer term this is a great investment i still might go a little bit lower, but i think when you see some of these stocks, i keep going back to Richard Kinder buying kmi but he doesnt. He continues to rebuy this stock. I continue to buy because i continue to watch him buy his own stock. I think in pvh i think theres much more up side too. You look at kmi right now, youre getting 5 , thats great in terms of a dividend yield longer term once we get through the trade war, whenever that is, i think we will, this could be a buy that we all wish we had made. While pvh soared, starbucks was feeling some heat. The company cut the Earnings Guidance for 2020. The onetime tax benefits from 2019 will be a significant head wind for the coffee giant next year the comments come a little more than a month after the coffee giant raised guidance following a strong earnings beat we had a lot of analysts say starbucks is back. The story is back. The growth is back, tim. Youre in the stock. What do you make of this the stock is back the big issue is what do you want to pay for starbucks . You want to pay north of 30 times on a multiple. What the stock did, this is the first cold water weve seen on the stock for the company. Through the last Earnings Period we saw u. S. Comps were up over 7 they are able to bring through higher prices. Their margins are going higher the question is, what do you want to pay for the company . The company has traded sideways. It appears to remain defensive in this environment. I think it will remain defensive. I dont understand why the guidance was adjusted . Adjusted today in light of the guidance they gave a month ago. If you were referencing a tax rate that was out there. Is it new did it change . I dont know why we got that. Pete. I would be concerned you brought up where it is now in terms of pe. I bought the stock and i am selling calls against it because of the inflated volatility i like that name because i see the growth theyve got in front of them and the pricing power. Theyre attempting to go head to head with starbucks. They got a great position. The fact that theyre in tea, coffee, lower price, mel, i think thats something thats much more appealing to the chinese. They have less overhead they have quick print. They dont have places to sit with free wifi and open bathrooms all day long. Which is something were seeing coming from other places. Ca caribou in minnesota, theyre calling it cabins. Nice. Theyre not going inside, theyre walking off. What the folks at home cant see, mel, is when you mentioned bathrooms, you looked directly at me, as if you understand like theres some problem with my constitution, which i find i have feelings, too your digestive cyst testimony is like its like an orchid. I am as well. With that said, im shocked the stock didnt trade lower. It was unclear what they actually did. Earlier it did, but it came becquereltivelily well maybe thats a function of the broader market, i dont know given its trading 31 times forward earnings, you have every opportunity to sell the stock today. The fact that it didnt sell off. 50 here is pretty encouraging, i think. All right coming up, it has been a mixed bag for pot stocks this year we will lay out what big catalysts could put a spark back into the space the booming cannabis industry. There it is. Tonight at 6 p. M. Plus shares of lululemon lifting higher this year one trader is betting on a bigger rally in reports earnings tomorrow well see what has the market so zen on the stock fast money will be right back. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. You should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Welcome back to fast money. 2018 was the year of the pot stock in cannabis. Bulls predict theres another one on the rise. Right now may be the best time to get in. Reporter are we going to look back at this time and think, that was the time when cannabis really took off where it was really publicly accepted where the money could be made. Absolutely. Oh, yeah. Oh, for sure. When we opened our first store one of our investors was learning jujitsu so that he could better handle himself in the event that he did go to prison. Steve white, ceo of Harvest Health and recreation, one of the Largest Cannabis Companies in the u. S. Whats changed . I mean, what is it about right now . Historically for the average investor cannabis was way too risky. In a couple of years your question is whether or not everybodys going to be on board. So right now youre in that sweet spot where you can have where you can make tremendous returns if you invest in cannabis. Were at an inflection point, the golden era of cannabis investing . Yes, i will say this is the golden era i will say that. Danny moses, legendary investor aka the big short. Danny moses, the optimist of the bunch and a hell of a trader. So that was the big short yeah. Is this the big long . This is the big long. Its the best Macro Economic opportunity ive seen in the markets within my career. Was there a light bulb situation when you thought, this is it . This could be a huge business . Well, i went to a dispensary in denver when the market opened and it was eye opening. Vivien azer, the first pot stock analyst for the cowan company. There were old people, young people people that looked affluent and not. In five to ten years how big will this industry be . Cannabis in the u. S. Should be as big as tobacco in the u. S. Those are a few reasons why bulls say now is the time to invest hear more from them. Plus, fascinating arguments from investing in the space the risk factors all of that on high risk. High reward cannabis inc. At the top of the hour after fast money on cnbc tim, you are a longtime investor in this space you have an etf that has various positions. Im wondering for you what do you see as the biggest risk factor first of all, you have a lot of companies that are still relatively immature companies. But the environment where Corporate Governance and really assessing that landscape is the toughest thing to do in an early asset class. The Regulatory Environment to me is a tail wind i know it feels like weve had so many tail winds but when you think about the industry, theres been a fair amount of headwinds relative to what people thought for example, the east coast hasnt flipped and gone fully recreational everyone thought new york and new jersey would have made their approvals to be ready by year end. The dynamic with the doj, so the hsr holdoff, which is the hart scott rodeno act which you dont need to know all of those initials which is to know that there have been a number of very big deals in the sector that have not been approved because the doj hasnt signed off. A lot of people felt that wasnt the government signing off in talking to a number of these ceos, theyre quite pleased with the doj. Theyre doing thoughtful work. The doj is taking this industry extremely seriously. I think thats a catalyst. The big catalysts really are the banking acts the safe banking act which will allow states that have approved and where the people have voted and where as we know constitutionally the states should do let them be banked let them have Accounting Practices to follow normal Accounting Practices i think the tail winds out there. Its not a polyana view. Theres obviously a lot of pitfalls that can go on and i think its very, very early stages, but this industry is still so disaggregated that theres a lot of room for aggregation. Its not the medical research to back up the medical claims which is a big part of the investing story. Because some of these companies are very immature and theyre new, there are Corporate Governance issues that investors need to be aware of when they go into the space. Its intriguing theres two part bifurcating the medical with recreational im sure you know, is there another giant tail wind of the pepsis and whoever, constellation brands, giant companies in, you know, the snack space or related or spirits or beer or whatever becoming buyers of all of them and the valuation just going up dramatically. You would need federal legalization for that for an outright acquisition, right . Youd need federal legalization for these companies to put their own listings and a lot of their core businesses at risk. I think they are waiting i think that hemp, cbd, farm bill legalization has given a platform for a lot of companies to get involved now and lay out that infrastructure. Whats that infrastructure thats cvs some of the biggest retailing chains are involved and have partnered with some of the existing multistate operators i have to say even though we know the industry is going to change dramatically and a month is a dog year. Its moving so quickly that i think you do need to be investing and staying close to people that are following the sector i think youre going to get to a place where you see some of these regulations play out where you can get Big Companies to come in now. The multistates have a head start. I think some of these big players are going to be able to box people out. By the way, for all of tims disclosures go to fast. Cnbc. Com. At the top of the hour the show is coming up. Up next, lululemon gearing up for quarter earnings. Theyre betting the stock will soar on the results. Well break down all of the vetion li at the nasdaq in times square much more fast money still ahead. Thats why, your cash automatically goes into a Money Market Fund when you open a new account. And fidelitys rate is higher than etrades, td ameritrades, even 10 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. Youll only find at fidelity. By the way, shes the it wasnext mozart. G day. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back to fast. President ial candidate tom steyer will be talking about the race, the white house, the economy 8 45 a. M. Eastern on cnbc. Also happening tomorrow, lululemon reporting results. Shares of lieu lieu bucking the beat back. Options traders are betting the stock could go even higher lets get the action with mike khouw in San Francisco. Reporter 10 higher or lower on the earnings event. Some of the activity was some options traders believe that 10 move will be to the up side. Interesting trade we identified was a buyer of the september 6th weekly 1. 80 callings paid about 7 bucks and helped finance that trade by selling the september regular 200 calls at about 3 bucks. All in they were spending just under 4 to buy that spread. The idea here is that the near dated calls will appreciate if the stock pops. You would expect it to see 30. Thats how theyll expect to see the bullish bet after they announce results. Pete, you probably saw this action today how do you feel by lulu . Im very bullish. Ive owned the stock it was a pitch stock i thought it was terrible. Mens, kids, ecommerce those three are the legs that are going to push this higher. They have more exposure to the asian markets as well but a lot less than people would ever know i think theres a lot of growth. How do you feel about spandex, pete . Im a big spandex guy. Long spandex. No, the home viewers might have been negative, but i remember the power pitch. Yeah. Fast pitch. That, too i think i gave a giddy up. People were knocking on valuation. Look at the eps. They have it operating margins continue to hang in there. You remain bullish in lululemon. I have you have a pair of lululemon pants. Multiple. Are they yoga pants no, underwear, boxer briefs. Too much information. Petes been on that. We talked about the briefs. For real. Thank you, mike khouw full show friday thats more than anybody needed to know. Up next, the trade fitrade. Natra. E e , read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with td ameritrade. We believe in education built for all people. , [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. I can. The two words whispered at the start of every race. Every new job. And attempt to parallel park. electrical current buzzing each new draft of every novel. typing clicks the finishing touch on every masterpiece. newborn cries it is humanitys official twoword war cry. Words that move us all forward. The same two words that Capital Group believes have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Talk to your advisor or consultant for investment risks and information. Lets quickly recap some of the big hours after movers mallinckrodt down. It could hire a firm to advise it on the companys opioid lawsuit costs. Palo alto making a huge reversal the company Conference Call got underway the Company Shares are up more than 5 . More on our website cnbc. Com final trade time pete im going with intel. First trade should be to tune into the cannabis special. Second should be go check out brazil and the rest of the world outperforming again. Not forever. For now. Chair woman yes, if you want to be long or have to be long, you have some protections pete. Talked about a lot of things tonight. Pvh sure did. Despite the fact its had move to the up side, i think theres further room to the up side melissa, back to you. Back to you tomrow orat 5 for more fast, dont go anywhere cannabis, inc. , premiers right now