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State at cnbc and the desk will play judge judy and we will rule on who is right and not. And then cashing in on Regional Banks, the best week in almost three years. But the kre is still underperforming the market broadly. The traders check the sector balance. In case you didnt notice its indeed friday the 13th. Oh, no. Yes,s it. Scary. Are you feeling lucky unlucky. Clint eastwood. Always feeling lucky. Roll that 44 magnum right now the only thing unluckier than broken miles an hour mirrors and walking under ledders is the big familiar name chipotle, alta all trailing are they bargains . Lets talk about the market this woke three weeks in a row, steve of nice gains for the broad market. Eight days in a row for the dow. You know, i always say this i guesses in a station we say its the most unloved rally that i remember in recent history everyone got so lop sided in august the positioning was so ultranesting that this had happen to happen but when. Now over 3,000 everyone still getting benes it which means it goes highe you look tim at what happened since august a dark do youer month. Often followed in september which is usually the least good month. Not a great month. But there is better news on trade. Or at least the voices of better news on trade. Some of the macroeconomic data are better and its clear that Central Banks around the globe are being supported. Well, welcome tyler. Good to be here. And to a squary friday the 13th thats right i think the macrohas been supportive and highlighted you think about september, its the mirror opposite of august. Look at the 10year treasury bond 45 basis points recovery off the lee off the 6 oh basis points rally. The other thing i would add is Central Banks are more confident. I know we dont trust Central Banks and not a source of credibility. But the fact of the matter, the Central Banks around the world not just within our fed showing some dissension. The but the efficacy of lower rates as an option thats good for risk assets and reflation assets and good for sentiment about what they say in the Global Economy that maybe the market was overly bear zbliesh jeff i know youre talking about rates in a minnesota i dont want to steal your thunder there. But pick up on what tim just talked about the move in the 10year bond, this week. Yeah. And over the past few days is something. 40 basis points about. Its a big move and the question is are higher rates bad for stocks for right now investors are getting confidence that higher rates mean there isnt something more dwoer in the competent. And the fed was ut tightening people were worried about the spike in rates i dont think people are worried about rates going dramatically higher but in terms of how you want to position here going forward, it depends how tactical you want to be i think if we are sitting here 12 months from now, leadership reverts wak to the growth, the defensive trade. Economic growth probably remains sort of on trend just below the curve, probably stay is flat im not sure you can count on political volatility going away. But to steves point tactically the next month or so everything was so far to one side that i think you are still seeing the meme reversion coming aaii bullish to bear spread. 26 . Now back to positive the 2 . The average is eight even near alltime highs youre still below that. Dan is this a rally you cannive believe . When the s p made new his its tough to buy the breakout dating back to january of 2018 every new high has been skremtle 1 or 2 above the past segueing a bit to some of the stocks you are saying they are having a bad month you mention chipotle i want to throe in mcdonalds. Mcdonalds looked like most of august are ready to break out above 220. Im focused on mcdonalds because obviously a dow component. They do as much sales in a quarter as chipotle in a year. This is obviously i think an important stock. And now it just dropped what, 6, 7 in the straight line. Those are the sorts of names if you think about tactically, right, like when we make new highs we sold off a bunch over the last 18 months or so thats what you want to watch. To see if those names get overdone a bit because you have opportunities to buy the names is what im say sfwloog chipotle is up 82 year to date. I wonder if that was in the growth basket where you saw the rotation for add of growth into value. Even into mcdonalds only up 18 year to date that was seen as a growthy name too you wonder if there was grant lart going on in the rotation. But, dan, no one was applauding when mcdonalds and chipotle and star bruks bucks were leading the s p higher. In fact everyone saying this makes no sense pb a sign of weakness, no wreathing but in fact we have had enormous breadth the last few weeks we have had banks basically breaking out transports, retail, youve had essentially the things that people wanted to see so i think the question is what down with the stocks. I just want to make one point about that, though, each incremental spot when we get to 2,900 that was a new high last year then the 3,000 a new high this year it hasnt been a great time to buy stocks because we had different rotations every time and we have had some of of the megacaps name driving performance underperform so theres been a lot of churn over the last year and a half. There is no convincing evidence to believe that this time is going to be different, that its going to be especially as the rates start to go back up, thats a narrative i think is really important because when people didnt believe rates could go lower last year, the 10year treasury was 3 we bottomed out at 19. 45 last month. Now all of a sudden rising rates is bullish we get evidence next we can because whatever the fed says rates move one way or another then we have a sense of what investors really want. Why would rates go higher rates would goo go highe theyre overshaut to the downside. The downside which said we are going straight into rezblees less worry about that now than three weeks ago. But guys hold on you saw what the ecb did this week and the what the president said all week about our central bank do you think that just because the 10year rallied 4579 basis points this week that rates arent going lower thats the most rude crouse statement i think anybody could make now. And the ecb i dont trust but looking at fiscal policy is now being sought of as alternative to Monetary Policy which central bakers has no efficacy thats bullish the biggest economy in the world, biggest Services Component of the economy reports strength people were saying the u. S. Was going out of business. The 10year down to 1 ht 42 on the 10year was not a function of the u. S. People werent saying the u. S. Was going out of business preponderatesy saying that were the the in fact the positioning be dsh jeff talks about the aaii if you look at Hedge Fund Net long positions and mark pof clyne vich brought it up its only gotten to the neutral, not overweight theres been a lot of reasons to bet against it. And im youve been right that everyone has been ultranegative. I think thats whats fostering the upside potential when you get the light liquidity days or blast off days, once you have to really get off your fence when you decide i cant buy it i cant buy it i cant buy it you make a new high in the s p youre forced to cover the shorts there is only so long. Excuse me finish the thought. There is only so long you can at this time sit it out saying im not covering the retail shorts, not covering macies everything that hasnt performed. Im not covering the chemical names. Im not going to cover the industrials. Or all of these trade names that are trade responsive, so you have to sort of get in the market and say, you know what, let me hold my nose. Ill cover 50 see where we land after the fed and after that news and all the dust settles before we move on i want to tie off the conversation about the four unlucky stocks that we highlighted at the top there, a. M. Gen down 6 starbucks 6 . Cmg. Chim oemts the and ulta down 5 is there something tie are the core four together or are there the dplks particular to each company. I think its a bit of both. Looking at starbucks and chipotle steve mentioned they are way up maybe a 5 pullback isnt a reason to dive in. But fundamentals are good. Alta a different story large percentage of the revenue in makeup its a slowing part of the business its a bit different story there. Its been absolutely crushed knife through the 200Day Moving Average maybe a bit. Overreacted though. Right. To that point we have two that have performed and having have been the outperformers two that havent been performers when you look at amgen it has fundamental reasons why it hasnt performed i would stay away from amgen i bought alta today because it stopped right around where that deets low was. And its bouncing from there and i think its good for a 10 pounce. Even though bryce targets are coming down theyre above 300 and then some im not an exert expert in the company but do some work on it because its not overdone. Let the record show the four guys on this desk have revenue invested in makeup. I was going toz. For as long as fast money does business alta will have good demand source lets say. I didnt even have a goatee five minutes aigt this is air brush. Going to the chart of the day. Jeff you brought it. You are saying the direction of rates it o can be higher nearterm. There is a bit of a debate here. So that and see signaling something for the beta trade where you can get more bang for the buck the conversation we just had a good zwag to the chart and its ken can the rotation into value continue in i thought this was. Not beta orourke. Not beta orourke beta, beta for the market. Right. You look right at 10year treasury high against low beta as as rates paul the beta trade doesnt work as rates rise the beta trade works. The question is are rates going higher or not . As we talked about a bit as trade in the nearterm positioning was so crowded in the fixed income markets i think there might be a bit to go there. Look at tlt for example. Come down a bit. But i think in the 95th percentile in terms of 200 Day Moving Average you can see positions a bit rates drifting high ner the nearterm that helps the beta trade. Whats interesting about the beta trade is next week weve a fed where we might get a hawkish ease. What does that mean. A hawkish ease a Federal Reserve saying they were making a midcycle adjustment and had dissension in the last couple weeks from different members and exdallas president come on nbc saying Monetary Policy shouldnt be listening to the white house. But, look, i think we can get a case where Market Expectations of the fed being a friend, as friendly as we thought it was, may not be so. That would abproblem for the cyclical or beta trade yeah, i think youre right about that i think its all about perception does the fed back off because things are looking better so rates drift higher in an orderly fashion and people can shift to beta or is it complete panic because now rates arent low still to be determined. You put a present these he is and you said near term beta trade works nearterm. How long is nearterm . And what should you watch for telling you the traded is done yeah, i think nearterm is obviously ambiguous. The next couple of months say. Because i do not think trend Economic Growth has changed. I dont think the yield curve is going to steepen to 20 or 30 basis points watch the yield curve as a sign for whats going on as it relates to future growth expectations because i think as long as that remained constrained then rates remain in the trade willing range. Sure, up to 250 . Absolutely but back to 150 and test that yes. Were coming back and talk a lot about this in options action. A great show. Its a great show. When it is it on. At 5 30 eastern time. Great show stay there. Do you buy bush wsh what jeffs selling here. The its interesting. S p 500 on the week is up a little less than 1 on the week we saw the massive ramp and yield back going back to the comfortable level. The slowdown in the pace of equities, i dont see see that as particularly bullish. I think you need things to come together the most whatever you call it hawkish cut we have. Hawkish ease. Hawkish ease. You need some increasingly i guess dovish commentary about the trade war. Better data here in the u. S. You need to see earnings were getting into october and then you have a ramp into the end of the year. And that could be the beta trade there. Because you if get the other stuff that has not been participating starting to go up because you had all the other effects moderating, thats the trade to the upside im not certain it can all happen in concert. You come here and you visit its a great day but i think youre aware that dan is nothing if not consistent he finds a way to turn this very bullish week in reversal into something, ah, you know. Optically, nothing really changed, maybe some more soybeans get bought and maybe were caving on huawei. The only prom is 200 many handle is higher. What do you mean 20. Were trading with it 282,900 in that raining zbreenl 50week moving average holding the market. If you weight it on the sidelines and negative you had to be positive. Leave it there. That was a 15minute a block the time flies im telling you. Its you, tyler. Coming up Regional Banks having the best week in almost three years. Just how much more can the bank rally run . Plus goldman going sour on apple. Well tell you whats behind the bearish call on its friend, partner and tech giant and we are live from times square in new york city. Traffic never moves that fast. Neither dot pedestrians. More fast money though, right after this 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. Cnbcs at work summit, talk ceos the game doesnt end after a spectacular touchdown grab because theres always another team looking to punch one in. With nfl redzone from nfl network on xfinity, you get every touchdown from every game on sunday afternoons, all season long. Watch every breakout star, every heartpounding running attack, and every big time defensive stop. Sundays were made for football on xfinity. Thats simple, easy, awesome. Add the Sports Entertainment package for nfl redzone. Click, call, or visit a store today to learn more. Youre back on fast money. And were going fast now the kre Regional Bank etf getting a boost closing out best week in almost three years up 17 this year but still underperforming the Broader Market why . And will the climb continue in tim, you mentioned the reamle banks. Financials had a good day today. I think the recentlile banks are the most Interest Rate sensitive. Thats the trade i think has some room to unwind. Remember went from 37b a a cold war on the 10 here to 1. 40 i think there was pain in bankland despite the lower Interest Rate and what that meant for mortgage rates, et cetera, while credit certainly credit spreads certainly holding up and tightened a bit. I think there is more to go on the trade. But im someone long Money Center Banks and someone throughout the time has felt the valuations are defendable. The Balance Sheets are pristine. And even the Capital Allocation back to investors which is not why you necessarily by a bank. But its why a lot of people used to buy them and why Pension Funds own banks. I like the trade i think the breakout has if you overlay it over rates as you were talking about before, it is just one to one there, so it depends if you dont think rates go much higher pch i think that we all probably agree on that, i dont know how much longer this trade can last. I think kre is going to be more dependent on rates moving higher even though underperformed the large Money Center Banks i would think you are closer to the end of this run in both of these, the kre and xlf versus beginning or mid dan, you say watch jp morguen. Just went from 1. 05 to 10120 schoesed new alltime when is the last time we said a major u. S. Money center bank or any bank on the dploeb traded at a new alltime high in the last couple years here . Thats the one you want to keep. Got rejected numerous occasions the last 18 months at that level. To me i think if you can establish a new range, you know, given the fact that we have rates where they are, they are not going too much higher here then that could be bullish i know guy had a power pitch a couple weeks ago on citi trading at 60 went to 70 its high from 10u7 10i8 wabs 80 maybe jp can drag some of those guys final thought. I think the jp morgan kmart looks a bit better than the regional chart the regional still making high lower highs jp looks poised to break out there die li pay be a dichotomy dween the money center and regional i think kre is at an interesting point. Can it break out through the downtrend . We will see. I want to clear back to being consistent i dont like them here i dont think you buy them i think rates are going lower. You did that clarified. Fine. Were taking a quick break. Im Tyler Mathisen and here is what else is coming up on fast. Goldman and apple into a tug of war over the tv remote. Who sees the Bigger Picture . We deepest debate when fast money returns this is the age of expression. But shouldnt somebody be listening . So. Lets talk. Were built for hearing whats important to you, one to one. Edward jones. Its time for investing to feel individual. 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. Watch Business News live with the daily free preview. Access market updates exclusive features and the favorite primetime shows. Discover the new cnbc app on apple tv all right, welcome welcome back lets talk about apple getting bitten today Goldman Sachs cut the price target to 165 from 185 the firm saying apples plan to doll out a free trial for apple tv plus subscribers have a for apple tv plus to subscribers will have negative impact on selling prices apple responding today saying they do not expect impact on results. Gentlemen whab do we wants to take a bite at the apple. Ill take a mall bite but i think its a big enough apple for everybody. We have a case where goldman tried to talk about the accounting of services versus hardware and really say this isnt a services friendly as you want they tried it was a very interesting exercise that alone is not stopping the move to services that alone is not stopping the rerating in apple stock. Whether, you know, apple plus as a preloaded service for people for a year is actually a way to get them hooked on the service remained to be seen. But there is no question that they are Getting Better use of the billion and a half installed base than they ever have. Yeah, i mean listen, this is it is an accounting thing they are talking about here. But there is Something Else on the hardware front to be worried about. Apple units, iphone units are not growing anymore. Its Services Growth is zpent on that installed base growing. If you start seeing a the chlt sps coming down that means you see grow margins coming down thats the hardware business at 60 of overall sales its important if you lump in the sales on or theservices on the installed base you might not get the multiple that you hope on the services business. Because if its just being bundles in fl because who mow knows what the attachment will be after the year. People arent going anywhere . How about hardware as recurring sfwloofs i love the upgrade program. And i think apple prime is coming to a theater near new 2020 thats a big are part of the story how you bundle it together. I think the accounting gets cloudy for me. When you look at goldmans accounting of it, i think that theyre trying to be provocative maybe in the essence of the call but when you look at the technical on apple people have bet against it so readily and now its breaking out and eop technical level. If we can overtake the 23 marks. We have news bob iger of disney resigned now from the apple board. Obviously these two companies have had a lot in common oefrp the years with pixar and steve jobs and so forth. But now they are competitors yeah, look, they clearly are going at the over the top in the streaming business its hard to know what Something Like this means. Bob iger is a busy guy. Yeah. And i would say on some level it doesnt make a a ton of is sense. Apple is a media copy. We talk hardware, services media. Im read going that way. Maybe a bit of conflict of interest there ultimately i dont think it has a huge impact on the stock if you look at apple stock it held the 50Day Moving Average 18 times not overly expensive its a longterm story. Its a validation of the business model. Yeah exactly. I think you hold it here might have to be patient with the stock in the nearterm obviously third biggest market is china iphone sales down 14 in the Second Quarter maybe nearterm chopping but hold it in the near any thought nathan you like it. Youll see new highs china is the issue. The stuff with apple and huawei are so related we have to leave it there we tone have final trades because we ate up so much time. It was worth it and he want leave time to say goobld to page jonah moving on. Moving on within nbc to where you going to the entertainment. Yes. Specials entertainment. That be will. Buy universal tok. Hell be there for thmase cy processor aid. We have to go. Options action is next see you later. 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. Announcer options action. Strategies from the streets top traders. New opportunities to profit from the markets hottest trends. All right. Happy options action friday, shall. Im Tyler Mathisen in for melissa lee. Live from the Nasdaq Market site a huge show on deck for you. And here is whats coming up tonight. As the yield. En on the 10year. Its flying. But caer

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