London Stock Exchange. We get perspectivy from one of the rivals terry duffy joins us exclusively here on set. But first, its still on and we are talking about the great roe rotation so many of the desks have been skeptical of maybe even poopooing at times. Showing tahoe strength here in sectors russell, banks, retail to name a few. Whats making you a believer, guy . Its a fascinating question i mean the market has an uncanny way, not that i need help making me look silly. Within a of alltime high of the s p 500. Everything looking fantastic when do i become a believer . You know, i dont know the answer to that but what ill say is the head winds havent gone away that much yes rates backed up probably a healthiy move yes the gold market not exploding up maybe the situation with hong kong has abated but its still there. The market is looking past them. I dont know how to answer the question because the concerns i have i dont think it they dont get resolved in one day. I know how to answer the question like when the. Nothing will make you a believer. Very simple when the rest of maga naks a new high and apple is on the way to do that about 10 bucks from the alltime id love google and amazon to participate. Knows are three and a half trillion dollars of maga cap you mention the russell id like to see the russell break above the sevenmonth range and get people thinking about maybe small caps digested the bad news and ready to go. Knows are areas i want to focus on im not interested in alcoaia ralliesing off the fiveyear lows too junky. Yeah. Okay karen. I love to buy when things trade down integerp by selling fop jp morgan calls, i do own Something Like a united rental that has obviously participated to the downside hard and back to the upside hard. I still its attractive. Fedex that we talk about a lot, no news what so far has gone from 149 to the whatever, 171. I like it higher than 171. So even though that one is up a lot ill hang on to things like that the vix coming in a lot. I want to own volatility because we are one tweet away from going back to the markets that seemed to fresh in my mind could be any second we could be in them again. Tim youve been onboard the rotation since you pointed it out. Sort of i dont want to say its a believer but you acknowledge the presence here. I do. Give us your youre a fellow georgetown alum yorp rangers come patriot tell him what he missing. Move from on the 10 yooer the move on that was way too excessive relative to the fundamentals in the u. S. Economy. Maybe not to the global economy. And i continue to think that some of this rate dynamic was a function of pulling down in a relative value trade i do think some small this is not full reconciliation in hong kong has been important to set the tone wore at least regionally there is more stability into october talks thats important im not sure what with he get out of it. We have reaffirming offer the u. S. Skierm. The services ism really the back bone of our country not a manufacturing reading. And so while we know that pmis go down around the world injury thats been part of the story. The most important from a market perspective is i think we have had the rotations many times in many cycles throughout the last two years. Its easy to say the market has done nothing but i think if you look at where retail is. Retail underperformed the s p bip 20 for a year until it suddenly it makes that back up recently if you look at transports and banks, but the thing about it is that the valuations to me do make some sense. And we sat around here and talked about food stocks talked about restaurant stocks and things that were tough to explain. And i think the markets rationalization is that those things can only go so high and recession is off the table for the next six months. Thats with a central bank at your back, thats been the justification and it didnt happen three days ago. This happened three weeks ago when the rest of the world started rallying relative to our fkt market. Thanks for jetting us but do you think that was bullish when you have the cht of the United States suggesting that the fed should go to lower zero or negative or possibly lower. Or negative. That incandescent elicits a lot of confidence in the economy. You are talking about psychology 101 im in the ap economics class online here where you have a case that the macrodata doesnt add up to a market falling off a cliff with the state patrol banks being what they are. You mentioned the last two years the market hasnt done much because you ac nonld that we have seen lots of rerae are rotation the thing is here we are at 3,000 in the s p fiechd. Well make a new high. Do you think were going to 3030 and then straight signup you know, five, seven, eight . No not particularly likely if you look over the last two years when we made a new incremental high we have gone down a lot we have. I dont think most of our audience is making a call on the market out so and so i think people are investing in stocks they are themselves rotating in and out. The fact gnat semis which i think have been an easy target of volatility and the volatility in that space has been ee nornlz but semis are about to make another fresh high and theyre up almost now theyll be up 9 from june of 2018 when everyone said thats it thats it for semis. Ill take 10 and take ten at a time when people dont believe in the. You think ten thp theyve had two 30 draw downs thats does make you feel good. Most people are not no theyre not. Invested in individual names. Let eye of what. Again, i understand statistics and i understand standard deviations and we are split up but to tell me that people should not have been investing in things that overall fundamentally their business zblees thats not what im say zblag you say because they went up and down a lot they were uninvestable in this period. Injury most arent trading like that. Whats the flipside to not bleaching in the rotation. Whats the flipside. If you dont if you dont no, no if you dont believe the rotation is for real. Right. What do the markets do . They have been Trading Opportunities. Listen im the first it tell you i thought the markets were going down sometime. I dont hide from it but within the context that have we brought up Trading Opportunities as a matter of fact a couple weeks ago we power pitched a bank at a time nobody liked banks. Citi bank did you that. That was pretty much universally poopped you used that word not me by the audience that closed at 69 today. Within the context of being a nonbeliever there are opportunities. My only point is that everything that got us down to where we were a month and a half two months ago have not gone away. Its gotten clearer. At 15 vix to karen karens point it doesnt make sense with the back drop thats out there right now. All right well the next guest says the value rotation can continue and new highs are coming with it lets bring in mark klon vick. From jp morgan always great to see you. Thank you. You have a bunch of concept iks on the rotation. To answer guys original question what has changed to make you believe the value rotation is here. Well, first positioning is extremely low. If you look at the Hedge Fund Equity exposure its zero le close to all time lows in 2008 aa, ii its same level at 2008. So a lot of bad things priced in the Market Positioning is low generally there is upside thats pure mechanics not even economics 1010. Ap economics. Thats something we can hold onto a low positioning. And then the you had some positive developments been mentioned already. You have a services in u. S you have a little bit on the brexit, a little bit on italy, a little bit on hong kong sar. And then you had this october negotiations so if dsh we have two to three weeks before october where we still have a buyback full force when the vicks decline from 22 to 14, 15, all the sort of system faults will relever and you have discretionary investor basically zero invested in the market thats which we think it can continue now why the value rotation continue people add to market . The first thing that will close is the shorts. Net positioning is zero percentile but gross exposure according to jp morgan prime is 99 you have a trade where people want long volume and short value. If they want to increase the net exposure i dont think they are triple quadruple and software sufficient like that they close on the energy aboil and gas. Some of the em, banks and other value stocks we think it can continue in our view until october in october basically you have negotiations anything can happen, right so if the negotiations blow up, we go back if negotiations actually produce some results i think this can last a full year like into 2016 and 2010 when it lasted more than 18 months. Very strategic trade. Strategic is until october. Right. And in october i think we need to reassess if there is progress towards the trail twrad deal this this can be new 2017 sorry 2016 age 2 plus 2017 can last another 18 months if the if more of the same, you know, missouri no resolution back and forth tweeting stuff like that then we go back to where guy tinks we go. We you say we could go back if there are stumbling blocks in trade do we retest the ten year yield lows. Yeah on the 10 year we already said most of the 10year move was purely technical. Mortgage rehedging entrance liability hedging ct going up to 500 on the long bonds and stuff like that. A lot of it was technical, not necessarily, oh we are going to recession next we can or next month. And what tim said when the services came out even the jobs number were not going next month. Who knows if there is no trade we may as well go in recession next two weeks i dont think we go in rezblegs marco, tim mentioned 10year treasury almost cut in half we know where fed funds is above 2 lets assume the data does stabilize. Conversation around trade is okay what does that mean . Are we seeing rates go back up quickly. I hope so. What does that mean for equities because there was a time everyone is convinced rates can go up and stocks go up at the same time. And they did until 330 or ten years. I think from 140 to 170 i think is all positive. Probably to 250 is all positive and three like last year in april. At some point if but we are not yet there. Far from there, right . We are 170 so sort of lets kind of think when we get there and if he with get there. But i think yields going higher is good for value and stock at this point now bonds and Equities Trading risk on risk off fed is cutting its not as if fed hikes and rates shoot op off and sell off. Every central bank is cutting. There is monetary stim laws. Comes with the lag hits the equity market with a rag three, four, five six months if with he bridge october, november, december we start seeing actually the monetary stimulus feeding in equity market you also see credit from inputs from china lass five or six months you see that feeling i think we are vulnerable in october if we blow up like august 23rd with the tweet but if these through an orderly fashion ideally some progress being made i think we can 18 months, right that thats like 20 out. So very poor performance like in what you mention raies russell is flat since october 2017 maybe last two days break that two years within the move. All time highs we really didnt move 18 months or abouts. We could breck out again if we have some normal sort of political environment, Central Banks are easing and positioning is pretty much close to zero marco great to see you as homs jp morgan. Compelling argument. Very. The bulls are in charge right now. He makes as did tim make a very compelling argument. My only pushback is again things might have gotten better on the margins. But the problems we were concerned and and i was concerned about really vbt gone away and to dans point you have the president saying we should be at zero if if not lower in rates thats to me problematic. Lets get to the story we are following in the after hours session. Oracle shares are down reporting earnings a day early with ceo mushing hurd announcing a leave of absence for healthrelated reasons. The stock is down 2 had been down by as much as 2 its recovered a bit. What do you make of this. I think its obviously after market and investors dont like these surprises. We hope that mark hurd is just fine but i think the results probably look okay. That was probably a knee jerk reaction its important to remember that last quarter, the q 4 they reported is was good the stock broke a all time high process you look like the value and the secular trends you probably like a oracle at 55. The team is pretty solid. Katz is still ceo. Coceo thats interesting rarely do you get sort of two, you know, a two of them are very seasoned obviously ellison as the founder. I think from that standpoint investors should feel okay about it im curious. I dont know what the duty of the board is, hoich information do they need to give you know this came up a lot when steve jobs was sick. I think the board handled it poorly, not good closure and then later more disclosure i dont know what the duty is. But this brings up a question. More detail around the related issues. Right. And therefore lets not read too much into it is that the conclusion. I feel so. Because they have to do in the overly compliant board environment. Where well i dont know what to playbook of it. I dont know the duty i dont know what they feel their duty is coming back to the orange point i do think youre in good hands with ellison and katz. We spent time talking about software failing and essentially the high growth stories that have been really the byproduct of the selloff and rotation. Occur sell not a high multiple stock. Its in the middle of the space i like it. Guy, the. Margin better than expected you can quibble over eps maybe a miss in revenue margining hang in fl the at 13 times the magnitude we saw at 20 minutes ago was over done. I think ellison and katz are more capable picking up the slack in the interim. They may manufacture eps growth but this is a low single digit sales groer and they need to make massive acquisitions every two years. They are different buckets when we think about some of the Software Names that are a bit more exciting. Coming up hospital stocks getting a boost but jefferiys has one chart spelling ill will for the group. Plus apple getting a boost on the reveal of the iphones but there could be head winds facing the product that could signal the end. Much more fast money right after this you should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Stand up if you are first stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. I will tell you this, Southern New Hampshire university can change the whole trajectory of your life. To the wait did frowe just winners. Prouders everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Welcome back to fast money. Lets do a checkup on the hospital stocks. Catching a bit in the past with shares much ten et Health Leading the group up nearly 26 s the Broader Health care sector lagged this year up sus just 6 . Look at the chart by jefferiys by the analyst what you see here is the blue line is the spread between biden and warren the spread between biden and warpen as that narrows or goes down, the Health Care Sector xlv in the orange also goes down so as warrens cans look Better Health care stocks do worse. So now we are handy capping the potential democratic nominee. I guess it makes zbleens it works. In terms of hospitals at a certain point this was a valuation story. We mentioned ten et health care before now you look at it in a significant downtrend back the last couple years. Maybe its time to take money off the table. Then you go downstream along of the big cap farm iaaf names have been whacked nancy pelosi made comments recently i hear what you are saying if you are trying to handicap the election and overlay the stocks its hard. I would say certain stocks are cheap. Biogen is cheap. Unh still too chief and the sell off in pfizer is overdone. If you look at ata, the chart even with the volatility is sideways on a slightly downward trajectory that guy is talking about. We have done this every political cycle. So you really have to look up Second Quarter numbers slight miss. People were more concerned about the credit dynamics within the sector some of those fears have been alloyed. I dont think you have to rupp out and buy the stocks if you think the headlines are the koermgss those arent going away. Not only going away theyre getting worse. I think that i dont know that you know they probably bought them before the resolution of who the next president is going to be. But i feel like we have time stween now and then i want to stay away for a while. Its a sector buffetted by the political winds lets say. Yeah, its funny, i think back to 2015, 16. Dwas both sides a bit of both sides. Seemed like its a very popular bipartisan issue we can focus on the dem nominees that will may cause volatility or express suppress it. If you look at the xlv im looking at it four times over the last five years theres been at least four 10 plus peak to trough declines you get sole offs from high and you get the opportunities. A lot of these are cheap talking about value. These are names you want to buy when you go the blow ups i know you were talking about pfizer and bristol some of those single names seem the debate where all the dems on stage tonight can only imagine. Yoend you the blue line that represent the warren view and. The blue line was spread between warren and biden, the front runners. Warren advances. My guess is those things crisscross every zbleebt could be. Based upon the political winds and support there. For more on health care and the earthquakes head over to cnbc. Com here is what else is coming up on the show. Restoration hardware up 20 . Time to redecorate your portfolio . Plus in the aggressive move Hong Kong Stock Exchange makes a 37 billion bid for the london Stock Exchange well get a take from one of the largest competitors. With cme Group Chairman and ceo terry duffy. Fast money will be right back. I wanna keep doing what i love, thats the retirement plan. With my annuity, i know there is a guarantee. Its for my family, its for my self, its for my future. Annuities can provide protected income for life. Learn more at retire your risk dot org. Classical Music playing throughout welcome back to fast money. Check out apple get agonize boost off the back of the big event yesterday. Touching the trillion dollar market cap in the trade. They went in on the newest slate of products. No less than three brandnew phones but there are plenty of question base whether they are fill the gap until fiechgt. Josh lipton in sflis with more. Melissa apple announcing a trio of new iphones. Faster processer longer lasting battery pb better camera did they offer enough for consumers with the new phones to keep the iphones franchise at least basically stable for the next few quarters until 5g hits, as we expect next carrier. D. A. Davidson says yes he projects low stijt revenue klinec decline one surprise was the price the iphone 11, the successor to the xr 50 less at 699. That was the right move forte argues because its a mature market and its a way to encourage people to upgrade. Even as the iphone franchise faces challenges bulls like forte count on Strong Performance arbor from wearable. Process apple announcing a new watch for the series nine and the series three costs 199 jim kramer saying today that price point will explode the watch. He thinks we are seeing more buyer. Then the Services Gaming service, apple arcade costing 4. 99. And apple tv plus cost the same. And apple is going to include one year of the streaming service with new hardware purchases and a note to his client bernstein called the bundling strategy clever saying apple tv plus could reach 200 million apple customers in the first year melissa back to you. Thank you, josh investors may not be totally sold on the new batch of iphones. But analysts love the 4. 99 price tag on apple tv. Should gain a initial audience and gives them a competitive advantage over other streaming services and bundled for a year with any iphone purchase with no 5g until next year is that the main incentive to buy one right now . Dan . Listen, i think we learned this from disney earlier the pricing of theirs. If you come in half the price of the average Netflix Subscription plan it works. So thats the sort of price point where you dont have to think much about it. And i think to the point that josh made, theyre going to upload millions and minneapolis of users who just buy a phone in year, and get them on there. Thats the most important thing. Its a sticky product especially if you have apple. Isnt that the power of the installed base. Totally. This is the first time weve been able to say for a billion and a half you get it for free or maybe not the full installed base but that gets people on this its not even that it works. What it does is it rerates the stock. Whether people are actually excited about this or not. This rerates the stock. It is look at the move. The strategy. What was there in the last 24 hours out of the announcement that people didnt expect. I understand the stock has gone higher does it stay higher and merit the rerating it got. I think its reminding people this is not theyre not owning it as much for the hardware story its for the bells and whistles and things slowly coming forward. Again, this is the same momentum call analysts have been off sides on this. We got breaking news on smile direct it has priced ipo leslie picker on the phone with the details leslie. Hi, melissa according to a source familiar with the matter smile direct club pricing the ipo at 23 a share thats a dollar above the range. That we imply a 1. 3 billiondollar offering size and an 8. 9 billiondollar valuation. If they are able to trigger the green shoe and sell 15 more stock in the ipo which would take place if the stock rose, after that stock started trading, it would be the fourth largest ipo listed in the u. S. This year. So smile direct club pricing at 23 a share. A dollar above the range the stock will begin trading listed tomorrow on the nasdaq. Back to you. All right, thank you. So again, smile direct above the range and its priced 23 a share. I dont know why i want to go to you goo. You know im making fun a british jek and say maybe they should go to the address in the the uk and they would be crush going but im not going to say that right. We have seen other names in the space with a rough go if the good for them for pricing above the expected price good for the nasdaq for getting the listed well see how it trades. This is a stock with not that much competition. No, they dont. Its also this stands out by the fact that this was a stock priced two weeks ago at 2050 in the midpoint at a billion and a half theyre 10 over the level we havent seen that in any ipo environment recently. There are some regulatory risks to this. Apparently some orpgt do nottistis say not everybody is a suitable. Could we have guy try this out and well. A taste test, right. Yeah six months is it a sixmonth see when when i was kid we didnt have money and didnt get braces like the rich kids from scarsdale and stuff. This would be a new experience. They didnt have braces. Only perfect pearly white. They just came out like this. Can we go back to apple. You want to button up apple. I think apple deserves a conversation got your antennae up a bit because the stock is rerated by the streaming service. I guess the point i would make is its moving you closer towards apple prime, right and so this whole bundling of all the services and some services we cant put a number on apple pay but its useful keeps new the ecosystem. The more things they can do that arent costing a ton of money the way it costs netflix to create original content, i get what you say 100 . Coming up, the chairman and ceo of cme group joins us next, weigh in on the Global Exchange grab and what that signals for markets everywhere and whether or not the cme is interested in making a bid itself. Much more fast right 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. Have you lost weight . Of course i have ever since i started renting from national. Because national lets me lose the wait at the counter. And choose any car in the aisle. And i dont wait when i return, thanks to drop go. At national, i can lose the wait. And keep it off. Looking good, patrick. I know. vo go national. Go like a pro. 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. Welcome back to fast money. The Hong Kong Stock Exchange making a 37 billion bid for the london exchange. Hong kong execs say it would be a connecting trade between the east and west. Joining us to weigh in is someone knowing a great deal about exchanges because he runs. Lets bring in terry duffy chairman of the cme group. Im a big fan of your show and your hosts here thank you for having me. Thank you for being a loyal viewer what a do you make of the deal and the cme group is it tempted to enter the waters . Well, first of all, its a very full provides as we say in the business you got to realize that the price gnat Hong Kong Exchange came out with is 22 on ton of the deal announced that would maki it a 42 to lses originally price when it came out. A very, very rich offer by hong kong on this transaction you know, for cme ive been fortunate to put many pieces of the puzzle in place which others are now trying to compete with on that Playing Field whp. When i did the board of trade in 07. New york merkel tile in 8 im focused on the growth the business and completing the next transaction, and the nex in london in november were integrating. I tell people im forecasted on interrogate basing that business and growing our. Interest from cme perspective we are pleased with what we have today. Correct me if im wrong about tu but it sounds like you wouldnt make a competing offer. We dont comment on that to be honest. I feel about the business, i buy things that are compelling for my clients that are users of the marketplace. And thats why the next transaction nex transaction was compelling for the userers because you have the first time cash treasuries alongside the largest Futures Exchange treasury platform in the World Largest ebs alongside of cmes dpchlt fx flafrmt you dont see that in any other exchange that is kpemg i have to ask you what would be compelling about lse when you look at what they have today they have the lch, the london clearinghouse which i assume regulators would have a big issue with me trying to i choir that looking at other businesses they had the Frank Russell business which is a Good Business but i signed a 10year deal to exclusively trade with the product. You have to say the Cash Exchange business is left. As we nope we are very much not involved in the cash trading of the products so you never say never to anything but i think i clearly outlined baier our Business Plan is. In terms of the blueprint for what a cme acquisition could be, how should we think about that what areas are there geographicy was technologies we should think about. You got to look at your client how can you make your client more efficient Going Forward and if you can make your client more efficient you should make that acquisition because thats that pays the shareholders i tell my shareholders you a the time you last person you want to see is me you want me with clients. Im focused on working with the clients, checking needs. I i had twraded for 23 years in the marketplace i have a good understanding of the market. I know what clients need and i want to make sure i can provide that where others cant. Thats wherible the scale works. You have to look around spurms and technologies and others. Terry going to cme specifically coming off the best august average daily volume up 53 year offer carrier understanding this august was different than last what do you attribute the growth to can it sustain its disbelieve its hard to predict the future volumes but its not only the biggest august we have had, the second biggest in the history of cme. August is traditionally slower pch because europe goes to sleep. Thats long gone what you can attribute it to when you look at weve been talking about rates. You talk about rates all the time people are trying to understand what the rate market means. And just because rates are coming next to zero does not mean you will not have Interest Rate exposure. You could take rates negative as long as they move in the negative you have some rate suppose yur because different prices on Different Things unless credit cards went nchgt i dont believe thats the case. Mortgages in dmarng went nchgt for one person there is rate exposure out there. And we saw positioning in the marketplace to do that you get the efficiencies of the swaps, the dollar dmated swaps coming in the Interest Rate poefrmt. You create the extra 3 billion in majoritien very attractive proposal and you saw that movement coming through the month of august. Would you say that the month of august being such a stellar month was because of the rate volatility and if that dies down then do you not repeat that. I think its hard to say because we trade multiple Asset Classes thats the beauty of the cme model. People talk about the vix. I heard my friend karen talking about earlier about exposure to the vicks for volatility reasons. The vix you all talk about is the basically the equity volatility you are referring to. The vix in and of itself you look at volatility in other Asset Classes whether Foreign Exchange ob energy, we trade all the products so thats whats attractive about cme. You have to understand volume at this time today is measured completely different and when ifers grew up in the business knowing my friend guy adami over here. The sell tolerance for volatility is different. When you have movements like in matejplace people dismiss them they wont in certain things but right now they are dismissing the volatilities. I think they are pricing a bit different than historically and theyre pricing in equities only not taking the rest of the spectrum into consideration. You must have heard of jp morgan volfefa index. I i havent. It tracks trumps tweets. I did hear of that. Could there a be aed product tide to that zboo not at cme. Just was going to ask. Terry great to see. You thank you very much appreciate. Come back any time. Terry tough duffy. He makes a fascinating point. Because we focused most of the show on equity when you think about the volatility in all the other asset claeyss and the futures of the Asset Classes are trading and thats why the stock has been a rocketship three straight years. What have we seen in 16 and 17 fixed volatility currenty volatility. We spend time talking about that volatility. What i hate orp as a long investor its delightful for you, right, yeah, so wed be decently hedged i guess. Its been an amazing story sold off the last couple of two, three sessions but what a great run excellent job. Yes. Simply derivative on the derivative markets that they trade. These guys there is a battleground over data within the Exchange Community too s in incredibly valuable asset i think is becoming some way people look at the valuations of the companies. Its amazing how often we get the email from terry midshow. Its incredible. Something. I say it you will a the time. Youd be shocked who watches. I never get one guy you get them all. Full disclosure ive known terry for a rung time we were in the same world for a lot of years that doesnt mean he is not a great ceo in the United States doesnt mean the stock doesnt go higher just because i like him. There is a mutual love fess the quickly on cme yes expensive sold off 8 the last couple trading sessions you got to buy the stock again. Coming up a number of Software Stocks slammed today. Dan nathan says this could be the start of more pain for the space. He will explain check out shares of Aurora Cannabis burning out off the Earnings Release breaking down the results and what it means for the cannabis craze. Much morp fast money right after this dlifrpg alpha, the most important investor summit nine years running. Strategy from leading althat generates. Direct access to policy makers and government leaders on september 19th, who who calls the shots now. Go to delivering alpha. Com to attend this years blockbuster event. You will come away with ideas that you can put to work immediately. Plus special guest Vice President mike pence talks economy and trade war impact reserve i dont wish spot now at delivering alpha. Com 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. Its an honor to tell you that [ applause ] thank you. Liberty mutual customizes your Car Insurance so you only pay i love you only pay for what you need. Liberty. Liberty. Liberty. Liberty. Weveryone, looknk isntat your phones. The design thinking, the digital engineering, security, blockchain, and we will be first to market yes. When we do we launch . Unfortunately, in 2 or 3, hours. Why the delay . Cognizant is helping banks use Digital Technologies at scale to advance speed to market. Welcome back to fast money. Time for buzz kill software as a service stock. Sass and dan says cracks are appearing in a few more names. Sass cracks. You like that this is interesting. Z scale we spend a lot of time talking about the ipos come to market now np talking about the lack of the profitability. Talking about the growth and the multiples investor are willing to pay but here is one for last year. Down 20 on the disappointing outlook. Now down about 40 some percent from the alltime highs made a couple of months ago i think these are names you want to keep an eye on because they speak to Investor Sentiment in a which. There are some others. We saw the slack ticker work, that listed through a direct listing back in june. Thats also down 40 below its highs right after that listing broke price earlier, you know once they break price its hard to get back. Not that it was a traditional ipo. But there is other names out there. I think its important to look at these for sentiment ill take a step further look at service now. Look at workday down 23 big market cap companies, the companies that have do profitability marginally on an adjusted basis on the gap basis they do not but these stocks are selling off. keep an eye on the names. The last is the big ka hewna ogsass salesforce, right, karen . This one. The og. The og. Whats the og. Original gang sister. The original gangster. You know that buy. Of course he does. He also knows the goat. Greatest of all time. The goat. That one is not gotten above its post earnings pop from last month. This is a group you should focus on watch the price action here it could be a leading indicator of other names. In goes back for the retation we are talking about in terms of out of high valuation stocks. You got to workday quarter and i think it was september 3rd not a bad quarter. Margins were better. Beat on revenue, beat on eps but people said wait its trading 80 times forward earning in this vitamin unsustainable. Which is why the stock came off significantly. I think it has further room to the down zblood just in this rotation, i mean, value was so undervalued and then growth at any price literally any price like a mongo, twilio, roku, your whole list of them, the sass crack list, i like that very much i think even if the market if the market goes down or up succeeded see that rotation trade happening because it haddy verged so much. Cannabis feeling the heat in the after hours session after reporting earnings so it was a 9 move last check tim what do you make of it. Trying to go through the numberings on the revenue line it looks like a report in Canadian Dollars if you get the report in canadian dlarps you they got it at 100 to 107 in the middle of the august which would have been strong numbers that was at the time considered optimistic look, the bottom line for the entire sector is although the top line is good its about the profitability and we need to see Gross Margins for this company which if you look at some of the u. S. Names that have announced the last two to three weeks. Gross margins between 40 and 55, the ebit iaaf loss was slightly better than expected based upon the top line revenue miss which frankly if they cant guide correctly three weeks earlier and theyre this far off the map thats also a concern. Right now going through the numbers, the key is that aurora is one of the two biggest players in the biggest legal federal market in the world, whether you believe thats the place you should be investing or not. And the valueses are inflated relative to the size of in re market, really what these guys have been doing. Thats why you get the reactions when the stocks miss. Speaking of earnings heard broadcom gearing up to report offer after the bell tomorrow. The they bet the semi stock surges on the results. We bring you options action next jim breaking down the big moves in tech today. More on that at the top of the hour on mad money. Live at the Nasdaq Market site re saresque. Mo fast money the right after this insurance, so you only pay for what you need. I wish i could shake your hand. Granted. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu as a principal i can tell you this. When one student gets left behind, we all get left behind. This is a problem that affects each and every one of us. Together with ibm, we created a whole new kind of School Called ptech. Within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. You know whats going up today . My poster. Today, there are more than a hundred thousand ptech students around the world. Its a game changer. Liberty mutual customizes your Car Insurance, ptech students arounhmm. Exactly. So you only pay for what you need. Nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty 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. Chip maker broadcom gearing up to report earning tomorrow options trader betting it could surge higher on the results. Dan breaks union the action. What are you looking at. Interestingly the implied move in the Options Market about 5 for broadcom that is in line with the move over the last four quarters i wanted to break this down quickly. Two times average daily volume today. We talk all about implied movement and i think here is a good example how we figure it out. You would take the weekly at the money straddle pl what is that in barack obama com here in take the weekly at the money 2. 97 and a half call. Officered at 7 today. 2. 97 thats 14 thats the straddle if you bought the implied move between now ant friday close you would need a 14 rally to the upside or decline to the down side thats a wide range if you think about it but in line with how it moved the last four quarters lets go to the kmart quickly obvious willy its been in an uptrend since the lows this year up 17 on the year but interestingly, massively underperform the sm plachlt abthe etf tracking the Semi Conductor group up 37 there is the overlay of those two. Tim said earlier the smh loolkts its about to break out. Broad kochl mass a way to go one of the reasons for the underperformance any brought semantics enterprise busines here theyve been aquis i have the last few years thats maybe keeping wraps on the multiple for now. The levels dan points out 3. 18 was the previous all time high in april. Given the parameters make it runs at those levels and tops there. I think theres a good chance we make a run given the environment we see but pull the rip the order at 318 idr pgs ohs action tune in fray 5 30 at 5 30 eastern time up next, the final trades. I dont know whats going on. Announcer options action spopserred by think or swim by td ameritrade. 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. Thats where i feel normal. Having an annuity tells me my retirement is protected. Learn more at retire your risk dot org. Classical Music playing throughout Liberty Mutual customizes your Car Insurance, hmm. Exactly. So you only pay for what you need. Nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty time for the final trade lets go around the horn tim. Hi. Talk about verizon talking about teleco i think despite a at t had the rally some spills to verizon. The core business is a live but the Media Business has more value than people hink. Hi this is going in the best of tim reel. Final trade, oracle. Injury its down tomorrow but if its down a lot more down i think that nan 2 now its an opportunity especially if its down on the mark hurd news i think its a Great Company not expensive. Dan. Yes, the apple plus pricing not only hit netflix but disney yesterday. Thats one as we get into the fall you see momentum about that story. To me i think you can by that here and i think you want to use a 130 top is to the downside near term. Guy adami. Arent you a terry fan one of the great fast money guests. A loyal view sfleer a loyal viewer great day to have him on. Great day lyft i understand some of the headlines have been negative but you are getting decent news out of california. The quarter was good, back three or four weeks. Lyft. That does for us well see you back here tomorrow at 5 00 jim cramer begins in a few moments. Before we go wed be reremiss process we didnt mention those lost 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 help you make some money. My job is not just to entertain but educate, teach and put these games in context call me or tweet me gently after a good day tech finally seems like any of this out