Transcripts For CNBC Fast Money 20240712

Lets get straight to steve liesman. Jay powell testimony before the House Services committee will note improvement in the economy saying Household Spending has recovered three quarters of the decline and say this is in part response to federal spending and higher Unemployment Benefits which is running down he said housing has rebounded and Business Investment showing signs of improvement but overall employment and Business Activity with well below the prepandemic levels an the out light is uncertain. He makes special mention of the feds main Street Lending program, a 600 billion program with a backstop from the troo z treasury hell be speaking tomorrow before the house financial Services Committee with treasury secretary Steve Mnuchin and this is required testimony about the cares act where they have to quarterly appear before congress and discuss progress with the lending programs. The terminology, highly uncertain, is that different from what the clair has used in the past. This is the same language hes been using and a theme of his from the very beginning while the market has gone up and up and more certain about outcomes, fed chair Jerome Powell and a lot of members stuck to their take on the outlook which is that it is highly uncertain and concerned about a second wave of the virus and how much underlying damage is done to the economy i dont know that it is a specific leaning against the market but maybe they try to provide a bit of a reality check for how the market has sort of priced in different outcomes. Job voting to combat the nonexistent bubble they say theyre not creating steve liesman, thank you and in the testimony he seems to say, we need fiscal. The fed is going to do all that it can and now with all of the rancor surrounding the death of Ruth Bader Ginsburg and whether or not there will be a nominee tried to be pushed through congress, b. K. , it looks like the stimulus package might not happen this is the risk in the market when t when the markets were pricing in stimulus. Right and i think that is a big part of why we had that selloff today and i know we reversed but i think a lot of the reason why we had the selloff in europe today was that you have to say, Everybody Knows that there needs to be another stimulus package to get the Global Economy going if theyre going to be gridlocked and fighting over a Supreme Court justice or not even that, over the fact that whether or not they should vote on it, there is no room for compromise on a stimulus package. So i think the market was pricing that kind of disappointment today im still concerned about it but i do think watching powell and mnuchin tomorrow will be very interesting for the market because i dont think mnuchin wants this market to go much lower. It is way potpourri of reasons at the beginning of the day to sell when we had the spike in cases and the fear about new lockdowns in europe and potentially here in the united states. We have are the rain corp in congress here at the same time we really finish off the lows. It was impressive but i love to quote the great philosoph philosopher yogi berra, but if you dont know where youre going, youll end up someplace else that is why the market is now. You get it you have a case here where we came from extraordinary place on september 4th where youve had some of the major market cap of the world pull back almost 18 intraday and apple down almost 25 . But if you look at the charts, theyre still broken well have the technicians on to give us that but a market waiting for stimulus that is not here and a market that needs the fed to chime in every five seconds, if the fed is just stepping in on a bad market day, that is really scary. I dont think that is what happened but remember where were coming from which is a world where the fed is not getting out of the way and told us over and over last week were going to have powell three times this week and be reminded that the fed is going nowhere therefore market needs to get back to key levels. I think it is the june 26 level based on the nasdaq which is around 245 in the triple qs and well see where we go. There are many great philosophers in your world and i know you were thinking about yogi berra when tim said to quote a great philosopher, the market turn around was extraordinary. And we started the show with apple and the remarkable turn around that happened in apple shares to close the day up 3 . Does that tell you, is that a true tell of the markets ill give you another great philosopher, neil young from canada and he said there is nowhere to the fed point i think it is a tell in so much as apple, and tim nailed it, from peak to trough, apple is down 25 which is your selloff in terms of what weve seen over the last seven or eight years for apple. I think that is an encouraging sign i would like to see that reversal on significantly por volume than weve been seeing but it didnt happen but what else encouraged me today was the s p from peak to trough, the exact number as the carter worth said it is bounced off of that. And i thought it would happen in a day but it seems to have happened over the last couple of days, the vix topped out north of 32 1 2, 33 and it closed today south of 28. So you see the significant sell in market and volatility pull back which is one thing i said we needed to say so you saw all of those things it is encouraging. Is it all over but you have great levels to trade to answer your questions. And karen you stepped into the market and you bought some things yeah. I bought a couple of things. Fedex, i really like that. I feel like it is retraced almost entirely that big pop that had after the earnings and i feel like theyve shownthey could make a lot of money in the pandemic i think also if they get back to a more normal environment theyre btob which is a retch line for them and so i bought some of that i bought some facebook i just feel like its very oversold could it go lower . Of course it could go lower. But these are things that i wanted to add to and here is the chance so in terms of the market, though, just to quote the again great philosopher yogi berra, i think were lost but were plagui making good time and i want to give kudos to bk who said all along in stimulus might not happen and i think that is weighing on the market a lot. Especially with Justice Ginsberg death and a chance of a stimulus is pretty much, i dont know, close to zero. Or at least before the election. So that wait on it and then well get to it later but clearly the banks and well discuss that later but that is weighing on the market but i was very happy to see the triple q turnaround and maybe made up 400 plus points from the bottom in the last hour. So that was encouraging. Well see overnight if europe picks up on that or asia. And it wasnt just apple. We saw huge turnarounds in square, in a lot of the chip names into the close so it wasnt just an isolated appleled nasdaq turnaround. Brian kelly, im wondering, is there a kacatalyst in the Third Quarter to believe that you have a level to trade against at this point . Does having any sort of stimulus passed at this point become a huge market catalyst what is that catalyst because there are elections coming up. Right. And there is nothing here earnings earnings will be the catalyst. Well there might be if we think about what is driving this market, it is dont fight the fed. Were going to get more stimulus and negative real rates, right so any three of those could come back with a vengeance. I would say to me what im looking for, i want to see the fed take some action i want them to say, hey, listen, were going to cap yields. Were going to do yield curve control or something else. Because by doing nothing, all they did was tell me, hey, Interest Rates are low for a long time. So me as a business person or as a trader, what do i do i dont have to do anything. There is no urgency. So the fed needs to do something other than vigorously shake their finger and say we want the inflation to go up we might get a stimulus, closer to the election, depending on the unrest and there might be a political incentive for a stimulus to come through i dont know about but the third thing if there seems to be a gap and it is biden really taking a lead or even trump really taking a lead, where it looks like there is not going to be any election uncertainty, think the market might price in some stability so that is what im looking for. It hasnt happened yet but if i see that it will make me more constructive. You need to see all three or one of the three. Any one all three would be like, i dont know, like hitting the lottery. I mean, yeah. Guy, what are you looking for in terms of the catalyst for q3 . You sounded constructive, almost it is funny it is funny you say that i get this, youre always a doomsdayer the people on the twitter are abusive. Youre doomsday and always negative i try to be honest im not always anything other than that. And i try to tell it like i see it and today was an encouraging day for a number of the reasons that we talked about do i think it is over . No and facebook for example, and we talked about 245 in facebook for weeks and karen mentioned it last week, if she had an opportunity at 245 shes going to jump in i think the low today was 244. 19 and it closed above the 245 level. So the market gives you opportunities. In terms of catalyst, you could page cally get some headline about a vaccine coming to market in the First Quarter of next year and the market is all hyped up i think a President Trump victory in november is probably market bullish so there are a number of things that could be positive but the back drop suggests tremendous headwinds. Today though specifically was a very encouraging day for people playing on the long side. The next guest said the big tech high flyers lets bring in michael. It is great to have you back thanks, great being back. We hope youve been well. In terms of the Market Action today, im just curious, from the mixed income side of things, did you see things as encouragingly as some of traders do i would actually argue, i did not. The yield curve flattened today. High yield credit spreads were wider. Soo there was definitely some stresses in the market nothing to get too worked up about. But we saw weakness that is percolating into the credit market and it is going to be hard for the equity market to really to rally substantially without credit support and vice versa. I think youre going to likely see wider spreads with lower equities so today wasnt necessarily a surprise that you had high yield weakness in a flatter yield curve but i wouldnt say it was a great day. You say there is nothing to be alarmed about on the credit side but at what point do you become alarmed and are we close to that . Im trying to figure out how far away we are from that level . That is a good question i think the fed has put a lot of support in the environment grade market it depends on where were focused. Investment grade feels really good to me even if you get economic weakness throughout the fall, im okay in that high yield is a different story i could see the approach of 8 , 9 percent over the next 12 months and that fed when it backstop against Investment Grade credit and high yield went along for the ride and i think as i look at corporate credit, im focused on default rates, im focused on fed support and im focused obviously on yield curve this is an area that we look at and have some support from both the fiscal and a monetary perspective. But if you dont get a deal, i know you guys were just talking about the fiscal deal and the support there, if you dont get a deal at all, that could be something to watch off a uni perspective. It is karen nice to have you on. Let me ask you, the fed hasnt been aggressive so far in what they said they would buy in investment or grade or yield or etf, do you think theyre going to pick up the pace at all i dont think so. I dont think they need to the fed is in n interesting predicament here in march when they announced theyre going to buy Corporate Bonds there were several deals that came through, antiyield deals that came through before they announced they were going to buy so if you are a Large Public Company you had a massive gift from the fed that maybe wasnt necessarily quite frankly and all it really did was allow the apples of the world and the Higher Quality companies, the tremendous Free Cash Flow to borrow at near zero Interest Rate access to capital is not the issue if youre a Large Public Company. So there is no reason to buy Corporate Bonds. The problem, as i see it for the fed, is taking all of the this liquidity in the system and getting it to main street. And how did that happen. So far it hasnt been successful they talked about the plain Street Program today and 2 billion of loans out of several hundred billion out there to be done and getting the liquidity to main street i think is the bigger issue for the fed than going out and buying Corporate Bonds. Hey, michael, it is b. K so im curious, this time last year and going into the end of the year, the market got the nickers in a twist about u. S. Dollar funding and we had to learn crazy things about the repo market and treasury, are you seeing anything that needs to be worried about in the end of september and the quarter here and further out end of year that was big pressure going into the end of last year as you mention. My former colleagues at bank of america did a great job making that call early in the year. This year we dont see as much pressure on the funding side going into year end. I think the other, what i would say investors need to pay closer attention to is how nearly every investment or trade since the bounce, since march, april, to me seemed to be a rates trade. And as im thinking about political allocation, whether that is investing in tech because of the Long Duration aspect of technology, whether it be investing in banks and the rate component of a bank trade, whether it be gold and sort of the real rate component of gold trade, whether it be Investment Grade corporate and the fed support there, all of this, all of these trades are effectively rates trades so i think i wouldnt worry about funding pressures into year end repeating themselves. I would be thinking about is what is my true rate exposure across my fixed income and equity portfolio because right now everything is very, very highly correlated to rates. Good announcement there michael, thank you we appreciate it from Richard Burnstein advisers. I think that final point that he made was really interesting in terms of correlation to rates. Hes always got great stuff and i think hes giving some insight into where credit markets are well ahead and that you priced a lot of this stuff to perfection and emphasized or these are my words not his, but why is the fed out buying high grade debt of corporates like apple. It makes no sense. But watch high yield and watch even the hyg which goes trait to the 200 today. The fed cant defend all of the high yield they cant defund the youth tranche that we were concerned about on a down tick i think credit is the story you need to follow as an Equity Investor and there are your guidelines. We have a market flash on tesla. Lets get to phil lebeau. After two tweets just sent out by elon musk and these were sent out within the last ten minutes and they have to do with battery day which happens at this time tomorrow afternoon in the first tweet he said Important Note about tesla battery day unveil tomorrow. This affected longterm production, especially semi cyber truck and roadster, but what we announce will not reach serious high volume production until 2022 and the second tweet he goes on to say we intend to increase, not reduce battery cell purchases from panasonic, lg and catl and possibly other partners too. However even with all of our sell suppliers going at maximum speed, we still foresee significant shortages in 2022 and beyond unless we take action ourselves. I think the reason we see the stock under pressure is people are foreseeing tesla saying this is what were working on and this is what we envision and that is where were headed but it is going to take time to get there. So a little bit longer time horizon and perhaps some greater investment by tesla in order to get the capacity and get the breakthrough in cell production that they need and that may be the reason why youre seeing shares of tesla under production and again well get the announcements regarding battery day at this time tomorrow afternoon. It is interesting, phil, because the timetable had always been 2022 in expectation of any sort of mass production of any sort of technology the expectation was that it would be a battery with 50 more Energy Density so a more efficient battery by 2022 and that is exactly the time frame of 2022 having to do something ourselves. Right but you know how this works, melissa. The expectations on social media, on twitter, runway ahead of what elon musk and tesla have said in the past some of the expectations that he see out there and some of these are not from people who are informed within the company, but they follow it closely and they say well what if they announce this and then somebody said what if they do this and it get as head of itself and what he did with the tweets is look, we have excited stuff but it is going to take spl time to get into the capacity and to reach the breakthroughs were targeting. Phil lebeau in chicago. Guy, tesla was another stock that had a turnaround into the close. Maybe ahead of the battery day heroic turnaround think about quickly, since august 31st when the stock made an alltime high 502, traded down 34 in a week, 34 in a week and here we are now. This is sort of the fool me once, shame on you, fool me twice, shame on me remember back in the beginning of may, i think it was may 1st when he tweeted that the stock was too expensive, i am paraphrasing, think it was an alltime high of 700 and it lasted a dand and you saw what happened ive seen this movie before. Selloffs in the back of tweets are buying opportunity my sense it will be again. And im not pretending im some raging bull on tesla im not. But what ive said for a while now is you heard everything you needed to know back with the joe kernan interview with president in davos and that is backed up on that tweet by elon musk clearly there are bigger forces at work in tesla. Coming up, the one stock that could be the Perfect Place to hide if you think, despite todays come back. There is more selling ahead. But shares of nikola tanking after the founder leaves the company. Well break down what it means for the stock anthd e partner General Motors stay with us fast money is back after this quick break. I really need to start adding less to cart and more to savings. Sitting on this couch so long made me want to make some changes. Starting with this couch. Yeah, i need a house with a different view. And this is the bank that will help you do it all. Because at u. S. Bank, our people are dedicated to turning your new inspiration into your next pursuit. Welcome back to fast money. Weve a market flash on comcast. Julia boorstin has the details. Comcast, the cnbc Parent Company, nelson peltz management taking a stake in comcast that the firm owned 7. 2 million shares my colleague leslie picker reporting that the official ownership of about 20 million shares which could be an explosionure through options not included in the 13f filing. Saying we believe comcasts stock is undervalued and we have recently begun what we believe are constructionive discussions with the Management Team and looking forward to continuing those discussions. Comcast had no immediate comment but we did hear from Brian Roberts last week at Goldman Sachs conference, he spoke about all of the ways that the company is on Strong Financial footing including he announced that the Third Quarter will be comcast best broadband quarter since 2008 with broadband additions projected at over half a million. Expecting healthy bottom line growth in the Cable Division expecting to see higher growth in the Third Quarter than in the past two quarters. Also announcing that peacock has had 15 million signups and flex has 2 million customers. Comcast shares are trading close to an alltime high, that those shares hit earlier this year but theyre pretty much flat yeartodate over to you. And again comcast is a Parent Company of this network. Karen, from what we know of nelson peltz and his style, the things that he goes after, is this a surprise at all in what do you think is up his sleeve . I dont know. This is a surprise to me i think weve seen him do this a number of times before sometimes it is well received and he gets on the board and is a useful and helpful member of the board. Other times it gets really contentious, if you remember the p and g proxy fight was ugly and ultimately he did win there. I bet, i think that this will be constructive would be my guess i think there is more to come, though im this is good news for comcast, i think all right were continuing to follow new developments on nikola the stock falling nearly 20 today as the companys executive chairman Trevor Milton steps down amid fraud allegations. Shares are down right now in the afterhours session. Lets get back to phil lebeau with the latest. And a lot of people are safing what next for nikola and what happens with Trevor Milton no longer steering this company as the chairman and the founder of the company so a couple of things to keep in mind steve gurski on the nikola board put together the nikola speck ipo, he will become the chairman of the company and the big focus, i suspect, is going to be on the Hydrogen Fuel cell semi and when you look at the deal and the prospects for the future, that is the most intriguing, if you will. F and gm is excited about the Hydrogen Fuel cells to nikola. Hindenburg research which put out the note ten days ago calling nikola a fraud when asked about Trevor Milton leaving he wrote nikola has almost no intellectual property or products or revenue to fall back on. We think the companys asset was the ability to raise money through hype and outright lies so if you take a look at shares of nikola, the question is what do analysts think. Well they have lowered price targets. Rbc cutting the price target to 21 from 49 and out with a note saying there are catalysts out ahead in the future once you get past the Trevor Milton episode. Gm is still on track to take a 11 stake in nikola and will build the badger pickup truck and they havent said where but over the next several years that is the plan an will be supplying Hydrogen Fuel cells to knick theyre drying a Hydrogen Fuel cell supply in europe and theyll be supplying the hydrotech that will go into that semi melissa,so the Hydrogen Fuel cells for the semitruck which nikola had in previous statements said they have that technology is that right . The question becomes what type of technology are they talking about. And General Motors, when they announced this agreement with nikola talked about the hydrotech capabilities and technology that they plan to supply to nikola so now were getting into an area what specifically, Hydrogen Fuel cells is what they said there may be other technology within that as well. Phil, thank you phil le beau putting in double duty tonight we should know that hindenburg has a short position in nikola last we know tim seymour, why is gm sticking with this . Well, again, it depending on who has what technology and gm is very pleased with their own technology and braeratteries and this validates like theyre supplying the technology here. It is not just gm. Think about bosh who is an investor in the company over multiple years, a major supplier to the Company Think of cnh industrial in italy. So it is just very interesting leaving aside the sell side analyst debate going on, especially on the network today, i think the more important thing and steve gurski is a ex Vice President of gm and those in the Auto Industry or supplying technology amongst the Auto Industry that seemed to believe in this. At whatever phase they understand it to be. And that does not mean that there cant be misrepresentations and securities fraud and again i know nothing im not alleging that. Im going to by the headlines were all going on and i have no position in nikola by the way. So i think it is important to point out, it is not just gm here there are multiple Industrial Partners and then there is someone who is move into the new chairman seat who has a lot of time in the Auto Industry including vice chair at gm. A long time auto analysts on the street as well this is a guy who knows the industry, brian kelly. So maybe nikola is in better hands. And i read an analyst note that nikolas bid is the Hydrogen Business because it is outsourcing the auto manufacturing it is not a auto vehicle company, it is a hydrogen company. Theyre bundling the ervice, the auto plus the hydrogen as long as that piece is still in tact, maybe you still have a company. Yeah. And i would think so, right. And so to me, when i look at this, this is really classic they probably went public a little too early but a classic kind of outlandish brash founder and i have no idea what actually happened but you get personalities that to be a founder and to come up with a new idea and to get it to that point, sometimes you move fast and break things as they say in Silicon Valley that doesnt work well in the public market. So you have this collision and chaos might represent an opportunity. Because if they actually do have a product and they do have something that gm and bosh really feel good about, and now ive got some adults in the room, lets say, that is actually an opportunity on any selloff here. So i would be watching for that. All right much more fast money coming your way here is what is coming up next announcer banks tank well dive into the report that found widespread misconduct in the sector and what it means for these names. Plus, what big changes on the Supreme Court mean for the state of health care in the country. And the stock that could feel the most pain. Weve got thatnd l m a aotore when fast money returns. Good morning, blair. [ chuckles ] whoo. Im gonna grow big and strong. Yes, you are. Im gonna get this place all clean. Ill give you a hand. And im gonna put lisa on crutches wait, what . Said shes gonna need crutches. She fell pretty hard. You might want to clean that up, girl. Excuse us. When owning a Small Business gets real, progressive helps protect what you built with customizable coverage. And im gonna eh, eh, eh. Donny, no. Oh. And im gonna eh, eh, eh. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. I was just fighting an uphill battle in my career. So when i heard about the applied Digital Skills courses, im thinking i can become more marketable. You dont need to be a computer expert to be great at this. These are skills lots of people can learn. I feel hopeful about the future now. Welcome back to fast money. Bank stocks getting crushed on a new report about the big firms dealing why suspicious funds wilfred frost has the details. Bank stocks were down sharply today following large declines for that european counterparts Deutsche Bank closed down 9 and both hitting 25 year lows in london trade earlier u. S. Banks ended up down about 4 due to an investigation that highlighted suspicious activity from various banks in the past specifically Money Laundering following a review of 2,100 reports filed by the Financial Crimes Enforcement Network a slew of banks i mentioned including hsbc, Deutsche Bank and Standard Charter and jp morgan and bny melon this is embarrassing for the banks but it is in the past and that government and regulators were already aware of these details since suspicious activity reports by their very nature are reports between the banks and the government in the first place. Deutsche bank told me this is not new information to us or our regulators todays selloff down to the broad sick licyclical selloff t Supreme Court deal making a stimulus bill less likely. Melissa. Will, thank you on the banks one sentence that he said stood out to me, karen, and it is not new to us or our regulators which makes me think that the regulator will let the banks get oaf to lightly whether it comes to the suspicious activities yeah, i plemean, i guess so one of the things weighing on the stocks today as well as this is the idea of maybe we have an administration a new administration tougher on the banks and even though this one was in the past what might the future look like if we were to see repeated issues like this or other ones but all of the banks were down not to similar amounts, the ones that i follow, jp morgan, and citti and wells fargo. So im not sure how much is this and how much as will said, the lack of stimulus and the economy in the market being down it was a very tough day for me yeah, there are numerous things you could point to as reasons why the banks could be down in a session like today, brian kelly. And i would add to that and some of the european banks just trade like death, they look horrible the market is telling you there is not much worth in the equities not saying there is a banking crisis coming but there is not much to the europe bank if they have another lockdown that is a problem. And the last thing i would point out, if anybody ever tells me that bitcoin is used for criminals and Money Laundering, im going to point them right to this report and that ends the conversation that is a very good point guy, i feel like we havent mentioned Deutsche Bank in ages and here we are tonight. I got tired of just i got tired of just basically hammering Deutsche Bank at every turn but quite frankly theyve deserved it. And i dont think, and correct me if im wrong, i often am, i dont think wells fargo was mentioned. They got crushed as well and i think to your point, it is a point worth making, the risk for banks on top of Everything Else is the roll that lielizabe warren could play in a Biden Administration if he were to win and that is potentially, i wont use the word, but catastrophic for the banks in terms of what would happen with regulation going forward. And to me that is really the tell risk here so citibank trading 63 , that is levels we last saw in the financial crisis that is extraordinarily telling and the fact that Warren Buffett paired down his u. S. Bank exposure a few weeks if not a month or so ago is also a huge tell and i think that is where we are in the banks right now theyre clearly not as important a vertical that they used to be, but you ahave to watch these things. I get there is value in the bank shares and trading at a discount and tim, reasons why you are long the banks but at same time there are so many risks coming up nnt horizon. What is the most concerning in your view . Yogi also said, if you get to a fork in the road, take it. And i think that fork in the road, obviously that doesnt make sense now, does it, mel but lets talk about the stress capital buffer that the fred didnt talk about last week or talk about limitations on buybacks and dividends i think investors are voting with their feet right now. Karen, guy and brian have talked about the issues and potentially some of the issues on a regime change but these may by independent of a regime change and i think the way banks have traded sense the stress test and throw in citi problems and deutsche gapped below the 200 day and that tells you there are some concerns there. I think that is the dynamic for banks. It doesnt get better in the short run but i remain long. [ inaudible ] on this name for a rebound. Stick around fast money is back in two. Delivering alpha is just over a week away check out this pourer lineup. Steven mnuchin and mary erdos and it takes place wednesday september 30th so hode to the website and learn more to register. And the stocks take a hit following the death of Ruth Bader Ginsburg youll hear from a top analyst t ulbeaid the Affordable Care accod at risk well bring you that and much more when fast money returns thats what my dad does. Good job, michael ok, lindsey now tell the class what your mommy does. My mom has super powers. Its like she can see the future. What . its like she time travels in a rocket ship. Thats cool and then she comes back saying try this or try that. She helps everyone. She helps them feel less worried. Wow mommy, so what is it that you do . Im a financial advisor. She is aig proudly supports all the professionals taking care of our financial futures. Welcome back to fast money. Health care stock falling hard in todays selloff as the death of Ruth Bader Ginsburg throwing the future of the Affordable Care act into jeopardy joining us now is anna gupta, great to have you with us tonight. Good evening. We mentioned health care overall, but the hospital stocks really took it on chin today molina, centene, you have three scenarios would happen to the aca. Two are positive you could go through them. Clearly the Affordable Care act is the most at risk from a Health Care Policy perspective it hinges on two things, the most obvious is will they fill the vacancy of rbg before the election or during the lame duck but one should look at the potential knock on implications are obviously for sentiment ahead of the election. I think that more likely, of course it is going to mobilize both sides and very much focus not only on the precedent but also on the composition of the senate at this poin. So i think that preelection scenarios or the blue wave post rbg is at a much higher probability than before and the other two scenarios, biden with divided government, the senate are majority or the trump status quo as we have it. Today it is probably equally impacted so, we have scenario on obamacare where you have the law completely over turned there was a texas lower court in 2018 and the end of december that had said that the individual mandate is completely receiverable from obamacare. This is heard by a federal Circuit Court but they only punted to the Supreme Court. So the Supreme Court with a 63 or perhaps a 54 majority could completely over turn the law on the other hand, a scenario we could have is that they dont either dont replace Justice Ginsburg or the a. C. A. Remains in tact from a judicial perspective but then we have a democratic sweep and six months down the road, there is a legislative outcomewhere the law could not only remain in tact, but perhaps even be strengthened with subsidies for exchanges, incentives for the red states to expand medicaid. So we saw this really violent selloff today for centene and molina and the hospital names. All of those have the most exposure to obamacare. But if you want to play offense, on the latter scenario, perhaps the strength in the aca, you could actually look at buying on the selloff on the other hand, playing defense, you should be looking at united and humana and maybe the Digital Health names which have done very well in the pandemic and generally are defensive like teledoc and amwell that just went public it is b. K so im curious about the dynamics in the health care outside of the a. C. A so we know because of the pandemic that a lot of elect riv surgeries werent done in some of the hospitals, were actually having some economic issues. And today in the junk bond market a lot of the pressure was in the health care sector. Those spreads widened a bit. So do we need to be worry about a financing or credit issue with the health care and more specifically the hospital stocks so we did see a big slowdown obviously. The margins on the managed care side, which is the flip side of the ledger if you will, they expanded and medical loss ratios and we have seen some of that beginning to come back but not entirely by any means. On the hospital side, the Surgery Center names, all names generally in the care Delivery System saw weaker volumes. But if you do see continued slowdowns from an Economic Perspective or there is a second wave oranother lockdown, that should continue to help the pairs, if you will, the managed care site, again united, humana, the Digital Health name. On the other side if you have pretty slowdown on the pandemic, no second lockdown and the vaccine perhaps, the hospital names could see an accelerated rebound in utilization and volume pickup. So there is a lot of uncertainty on the hospital side from both the election perspective as well as from the pandemic anna, great to have you thanks for phoning in. Anna gupta offense or defense, guy, what is your positioning here . Ill tell you, larry does extraordinary work in this space and they said the scotus decision is highly unlikely. So offense is probably the way to go. But you mention the hospitals and jp morgan downgraded ten ant health care. I think they lowered it to 20 and if you look at where it closed 24. 20 makes sense. The recent high was 30 20 is the 50 retracement if im playing offense, have thc on your radar screen and buy it at the 20 level maybe start wlayering now but i do think there is a couple of down days ahead. Coming up, option traders are betting this has a trade to run. And cramer is chatting with a ceo in an interview to see what is bubbling ahead. Catch that full interview next on mad money. In the meantime, fast is back right after this xfinity is your home for the return of live sports. Welcome back to fast money. Check out crude oil getting hammered in todays selloff Energy Stocks took a tumble. The etf falling more than 3 but one name saw bullish activities mike has the action. Were looking at marathon petroleum, seeing a lot of call activity over the last 20 trading dies an the open interest in calls outpaces that about three to one today we saw two times the average daily Trading Volume and most related to call activity. This time in a january 35 and 40 calls we saw 15,000 of those trade as a spread earlier this morning. Now, of course, the open interest is sufficient to cover, but a buyer of that call spread would be risking a little bit more than 3 of the stock price if they were betting that the stock could potentially rebound in some of the highs earlier this year despite this stock has seen quite a bit of weakness. Do you see value in the energy sector, tim well, if you look at some of the old Services Names and im long schlumberger here we have Free Cash Flow positive but there is an argument they have reeled in the business and exposed to the technology and the industry i think if you want the best of breed integrated name, i think you want chevron i think theyve proven theyre playing in line with the demand supply dynamics of the sector. Tu ifray youw, thankou nen id at 5 340 for options action. Up next, we have the final trade. You going to place it . Not until im sure. Why dont you call Td Ameritrade for a strategy gut check . Whats that . You run it by an expert, you talk about the risk and potential profit and loss. Couldve used that before i hired my interior decorator. Voila maybe a couple throw pillows would help. Get a strategy gut check from our trade desk. Announcer final trade is sponsored by interactive brokers. Time for the final trade around the horn. Tim seymour. The shelter in place trade seems to be back on today. Electronic arts, 25 times at a blow out fiscal q1, look at this trade. Karen. Yes, so my trade for the autumnal equinox, it is half mental so buy what you want to own even when it feels scary and for me that was fedex. I forgot about the equinox. Brian kelly. And yogi. I had forgotten about it even though the sun is in my eyes going down so listen, the future is hard to predict here but i would say xlf, you want to sell that thing and when youre done selling it, you sell it again. The banks look terrible. Guy tim works out in equinox, and that being said fire eye 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 trying to safe you money. My job is not just to entertain but educate, teach you and put days like this in context. Call me at 1800743cnbc or tweet me jimcramer. Remember the stimulus . Re