Transcripts For CNBC Fast Money 20160720

Later, the most hated man on twitter just got banned but that may not be good for twitters business model. Well explain. First well explain with old tech taking the markets to new highs. Kiss ki cisco breaking out, microsoft. Intel hitting a new high. Old tech has been on fire. Is it still the best place to be despite intels slight miss tonight . Tim, lets start with you. I think its stock by stock. In intels case actually i think youve got a company on evaluation metric, first of all, coming into these numbers was trading at the highend historical range. Very important business. The pc business has come back. The Margin Expansion is very interesting. But i go back to microsoft which blew out their numbers today, or did they . Against all relative to what you were expecting, year over year growth of 2 on revenues is not that amazing. Even though you can point to substantial growth in every segment of their business, the movement to the cloud today is very exciting. Who knows what thats going to be tomorrow. I still think at some point things might be getting a little ahead of themselves in the rally. Would you pick up the broad theme, though, here . I think its dividend. I think its the hunt for yield and the dividend. These are businesses that are good, steady businesses, not crazy valuations, but the dividend because people are so thirsty for dividends, hungry, whatever you want to say desperate. That has put a floor under these stocks that i dont know if that fully takes into account the risk of owning an equity versus a stock. But nevertheless the market wants to leave it that way. Pete, you had this theme yesterday. It still comes down to three things. Dividend, we were talking about these yields. You look at intel, its 3 , you look at cisco, microsoft and a variety of names. You get yield, you get growth and if youve got valuation, what a beautiful trifecta youve got. Also as you look at earnings season, what are people focused on right now . Theyre focused on where is the growth, is there growth. Last night we saw people looking at microsoft and saying, hey, look, their numbers were fantastic. The cloud is where were looking and thats where the growth is. We know pc is weakening somewhat and will continue to weaken. Tonight initially people were looking at the revenue miss which was not much of a miss. It was almost a flat number but you look at the revenue and suddenly the stock is down 3 . People are starting to refocus on whats important and what is intels new direction and i think all three of the names i just mentioned, cisco, intel and microsoft, i think all three of those are names that can go a little bit higher. But i think in the case of microsoft, its run awfully fast. Guy, karen says its about the search for dividends. Pete is saying its the search for growth. Where are you . Its all those things. Clearly dividend search is paramount. Look at the move at at t and verizon over the last six months. Those were stocks mired in range and over the last year, year and a half, those stocks have broken out. I think theyre both right. The name that sticks out to me is qualcomm. Remember on monday your first night here we had dan nathan and carter over at the smartboard saying what ia bullish setup it was to earnings and thats exactly what happened. That was a great quarter. The valuation of qualcomm i think is fair. They seemingly have their problems behind them and have a great balance sheet. So the one i think can continue to perform is qualcomm. But there were expectations that qualcomm might disappoint coming into it and push the stock down. Thats a special case, isnt it . Look at intel, a couple of quarters ago we were talking about the death of the pc and these guys were tied to a business that was going nowhere. There was a lot of bad news pricing in this stock, whether it was china, chips or the core part of their royalties business. A lot of that stuff is in the price. The question i have for the market right now is the expectations for so many things were so low and things have surprised enough to the upside that havent we gotten a little euphor euphoric. Were out of place in this rally where if you look at bull bear indicators, market hasnt been this bullish in a long time. Ultimately i think you have a place where things are very complacent. Let me pick up that precise point. One of wall streets most outspoken bulls, to the point that tims making, turning more cautious near term with the s p just a fraction away from his 2016 price target. Take a listen to what tony dwyer said on last weeks fast money. When you have two 90 upside volume days in a row and never been negative, three, six and 12 months later, your worst case six months later was 10 and that includes this cycle and your median was 29 a year later. I dont i get it. Its hard to buy up 15 to 20 from the low, but the fundamentals are improving. And tony is with us now. So what precisely is the call today . Precisely wall street is littered with strategists where you hit the target and then we change it. So actually we hit by target. The vix is at 11. 5 . When you drop below 12 for the first time in three months, every time youve been higher two weeks later in volatility by an average 20 . So youve kind of reached the target. In addition to that, we had a shock day. Brexit brought a shock day. After a shock day, you typically get a median gain of 1. 3 . Were up almost 6 . Thats the threemonth gain you get so i stick my by sixmonth target. There is no way when credit is like this, the real fed funds rate is negative, the yield curve is still positive, the Chicago Fed National Financial Condition substress indices are still very, very low, theres no way you want to get negative. What you want to do is buy at the better times and thats when youre oversold. To get a broader context, you are very bullish over where were going to go over the medium term. For people that are holding for the longer term, you think this is a great setup. I think this is a fantastic setup. You know, thats going to get my twitter feed going ballistic. But credit is listen, unless you think youre going into a recession, you dont want to get negative. Its not whether youre a buyer, its where youre a buyer. So if you can buy at a little bit better prices, i think thats the right call. We made the same call in march. Let me ask you, new money coming into the market today, what would you how invested would you say that new money should be . My input to the clients were institutional in the u. S. , so my input to the clients was lower your gross. Dont get negative, lower your gross and neutralize. As the t said, ive been very offensive in the market. I just want to lower that offensive bet. So, karen, if i was sitting next to you on your desk, id say lets lower our exposure and neutralize. However, if im looking out for that 6 to 12month period that i highlighted before, you want to be offensive, financials, information technology, the fundamentals obviously are pointing to that. And i want to kind of a basket of the more cyclical sectors, the industrials, the materials and energy space. I hear what youre saying and i kind of said the same thing, but i also know that on the other side a lot of investors are not that tactical and in fact cant you run the risk here, i mean if your view at the end of 2013 is 2375, why bother . Why bother to play neutral as opposed to just stay i was on the Halftime Report and got the same question when i did it before. Youre looking for a 3 to 5 correction, why bother. Corrections are only natural, normal and healthy until they actually happen and then all of a sudden youre down 3 in a day like we were after brexit and were going into recession, the Global Economy is going to fail. So i want to be in front of that. I want to remind investors unless youre going into a recession, you do not want to get negative on weakness, you want to use it to your advantage to become more offensive. You cant do that unless youve raised a little bit of cash or lowered your offensive bets a little bit. Theres one caveat that keeps coming up again, unless youre going into recession. Correct. Youre sure were not going into recession. Is that a view that youve held for some time . It is. Or is it on the basis of the employment report two weeks ago and the retail sales . Is it a fluctuating view . No. Theres three indicators that i use to determine if youre going into a recession. Number one, since the 1950s, you have not gone into a recession with a negative real fed funds rate. Its still minus 1. Its been flat lined for six years. Number two, the yield curve is still positive. You typically invert the yield curve by 15 months before you go into a recession. But lets say were japan and the yield curve doesnt matter anymore and the fed is pushing on a string. Whats the crosscheck for that . The Chicago Fed National Financial Condition subindices measure. They measure shadow banking, they measure banking. 10 five indicators including cds. The whole gambit of every indicator. Theyre showing very, very, very, very little stress. So ive got all three indicators point towards economic activity. Weve inflected earnings now. And the earnings are just going to start to grow and the multiple is turning higher. So our target this year was based on an 18 multiple, when it had been 16 in february when i changed it. 18 multiple on 121 in earnings. Im now at 130 on earnings and 18 multiple for next year and probably 2 conservative with a 2340 target. Have a great evening. Thank you. Guy, lets trade it. Hes been spot on. A 3 move from this level gets, what is that 60 or there s p handles which brings you right back to the levels which makes a lot of sense. What continues to scare me is the fact that what encourages tim and you, that bond yields continue to be stubbornly low. I dont know at what point they go too low and this unraveling the whole thing. Obviously you have an answer to that. How about the Global Economy gets a little bit better, which its seemingly doing with the fundamentals of Corporate America being reported. What if the fed is kind of stuck in neutral at a low level because of brexit and other issues and you get a higher long end, a la 2012 into 2013 and the financials go to the upside like they did then. The last time the tenyear note yield dropped below 1. 5 and the yield curve flattened like it did now, it wasnt a time to be a seller, it was the time to get offensive. Still trading it around the desk. I think there are two trades. Youve got vix under 12. Stock replacement, in other words, youre selling your stock position and buying options to being able to participate on the upside or youre buying protection right now on that portfolio so you can ride the bull to the upside. One of those two. Otherwise i think theres a lot of foolish trades going on. If you look at Morgan Stanleys number, year over year theyre down 9 . Thats a shallow fall off and i think these guys all have operational margins to the upside if things turn yield curve. About 15 bips steeper than where we were on the lows of brexit. Watch the dollar. But i think theres only so much the dollar is going to move. Its had a nice move. Emerging markets absolutely outperform here. Im with pete. I like what i own. You always think what you own is great, priced really well, which i think it is. But i need protection, its cheap now. Im going to get blasted, like i do, but its protection. It is insurance, i get a lot of pushback. Up next on the program, intel lower on earnings. The Conference Call is under way. Well bring you the latest headlines from that. Plus twitter cracking down on abuse and banning one of its most polarizing users from ever using its platform again. But was the move bad for the business . Later, stocks are at alltime highs at the republican president ial nominee donald trump gains ground in opinion polls. Is it more than just a coincidence . More fast money after this. Welcome to opportunitys knocking, where selfproclaimed financial superstars pitch you investment opportunities. Ive got a fantastic deal for you gold with the right pool of investors, theres a lot of money to be made. But first, investors must ask the right questions and use the smartcheck challenge to make the right decisions. Youre not even registered; im done with you i can. I can. Savvy investors check their financial pros background by visiting smartcheck. Gov in a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. Welcome back to fast money. Intel falling after hours. Josh lipton has the details. Josh, whats the main problem here . Well, simon, intels stacy smith was actually just on cnbc where he sounded a bullish tone for the rest of the year. Take a listen. We have insight into what we think some of the big cloud customers are going to buy. We have new products coming into the data center that we think will give them some capabilities that theyll buy a richer mix of products for us. So that momentum in the data center and particularly in the cloud as we go into the back half of the year we think give us more than seasonal growth in q3 and q4. Investors, though, at least here in the after hours not as excited. That stock had enjoyed a nice, recent pop so maybe some disappointment in the results. Revenue from that kline Computing Group coming in at 7. 3 billion, better than expected. But the data center group, so chips for servers coming in at 4 billion. The street wanted to see 4. 2. On the other hand Gross Margins at 62 , that did beat and that revenue guide is higher than analysts had forecast. So on this Conference Call, which is kicking off here in just a few minutes, analysts will have some questions about the state of pc demand, data center growth, head count reductions and also those reports that intel did get a chip order from apple for that new iphone. Guys, back to you. Thank you very much, josh. Lets trade intel and the chip stocks. Of course weve also got qualcomm tonight. This stock was down a lot more an hour or so ago when they reported in terms of intel. Tim pointed this out earlier in the week and i think its worth repeating. Were bumping up against levels we last saw at the end of the 2014. Whether or not thats interesting or not, well see. Its something to keep in mind. I think the quarter was fine, valuation is reasonable and dividend is great. But like cisco has now proven itself to the upside breaking 30. 5, i think intel has to prove itself. I think its data center and things where people have tried to be most excited. Those are the places where they have missed the most today. Theres nothing awful here but it gets to a place where think about where sentiment has changed towards the chips and the entire semis to where it is now. I dont think the arm deal should be implying a different multiple on the entire sector. This is a company that gets 90 of its business from pc and server. Theyre doing a great job and i think theyre neutral here. I dont think you run out and sell it but youre not buying it today. Karen. Some puts and takes on this. It was fine, it was fine, but the only thing wrong with it is that its run up so much in the last very short while. Last month alone its up 10 . Youre running into 52week highs. When you bring up Something Like qualcomm, thats well below the 52week highs. So this is one of the many names, new highs today. We talk about cisco and microsoft pushing closer and closer, but intel, because of microsoft, already ran into the number. So to guys point, now its basically flat lining where from we came in this morning. They didnt do enough to impress us. Tim is right. The internet of things and the data center, that area we expected more. We didnt get more, but i think in the next couple quarters stacy smith souned very, very positive about the cloud. And more to come with the earnings call. So which is the better, qualc m qualcomm, if you remember to commit fresh money tonight, qualcomm or intel. Im into intel right now you are paring back, wenren you . Yeah, i was. Maybe they break out but they havent. It was a perfect opportunity for you to say to pete, pete, you know, we play this game would you rather. Thats what we do here. I know you dont do it in the morning. Youre very uptight. But heres the thing, would you rather, so here we go. Would you rather qualcomm or intel at these levels . Would you rather, what would you do . I think qualcomm has some mojo behind it. A lot of the problems are behind them. They have a great balance sheet, valuation is reasonable. I think people are not in this name enough. Id rather qualcomm ahead of intel. Thanks for asking, simon. What a great game, guy. He can play it by himself. He tends to do that. Still ahead on the program, crude oil stating a stunning rally so far this year but is the hot trade about to come to a screeching halt . A top technician will weigh in and tell you what hed rather. Youre watching fast money firon cnbc, first in money worldwide. This man could be your next president. Then its a deal . Yes. We can have pizza the wrong way. Crust first. And the stock market seems to love it. And one wall street watcher will tell us why the rally might just be getting started. Plus, one of the most hated men on twitter just got banned from twitter. And it just set off a tweet storm. Twitters investors should be very worried right now. And well tell you what the war between a blogger and the social giant could mean for twitter investors, when fast money returns. Narrator the best place to find adventure. Kubo come on, this way. Narrator . Is in the forest. Kubo wow. Narrator so grab your loved ones monkey dont even. Narrator and explore a world of possibilities. Kubo its beautiful. Narrator visit discovertheforest. Org to find the closest forest or park to you. Welcome back to fast money. Twitter taking a big step in curbing abuse on the social media platform by permanently banning a well followed and arguably polarizing blogger. Julia has the details live. Twitter has banned milo, a Technology Editor at conservative breitbart who has 338,000 followers. Now twitter didnt comment specifically on his account which rallied hundreds of twitter commenters to attack leslie jones, the costar of the recent ghostbuster with sexist and racist comments. Milo tweeted that jones is barely literate and said if at first you dont succeed because your work is terrible, play the victim. Now, he defend end his tweets on power lunch. Theres absolutely no evidence whatsoever that im in any way responsible for inciting harassment against anybody else. Its just an absurd claim and theres no proof of it. What there is proof of that leslie jones did not like my review. I teased leslie jones. So sue me, whats the big deal. Twitter claims that it temporarily locks or suspends accounts that violate the companys rules. In order to protect the experience and safety of people who use twitter, there are some limitations on the type of content and behavior that we allow. Our rules prohibit inciting or engaging in the targeted abuse or harassment of others. Over the past 48 hours in particular, weve seen an uptick in the number of accounts violating these policies and have taken Enforcement Actions against these accounts. Now, trolling has been an ongoing problem on twitter. The company says dealing with abuse on the platform is a top priority. Ceo jack dorsey even reached out to jones direct lly to try to help. Lets trade this round the desk. By the way, we get trolled all the time on this show, which is actually kind of funny. I got one that said seymour, what does about too much hair gel that causes the brain to go permable. Actually this is not funny. This is about racist abuse that this woman took. Lets trade it around the desk, please. Well, i guess my perception would be that they did the right thing. Is it bad for business, though . I would say that if it is, theyre willing to suck it up and say, you know what, this is something were going to stand up for and were going to stand our ground and not allow this to occur. I feel i interrupted you. Im sorry, tim. The key to twitter is people have a voice and its an uncensored voice. On some level thats the world we love in. People can block people, they can mute people, they dont have to listen. These are basic amendment rights. Is there a point where they go too far . Of course there is. Im not condoning any of this, by the way. But blocking and muting you, you havent eliminated here. Here what theyre trying to do is eliminate the problem. I think taking away peoples ability to freely communicate on twitter, only communicate what people think is appropriate is going to be a big problem for twitter, to be clear. Im not saying that i want to be a part of it. I certainly dont condone it. I think most of the value in twitter is as a live media curated experience that people love and its a way to socially communicate. Its been very valuable in a very tumultuous world. But if you make it about censorship, i think are we in china or are we in russia . I think they did the right thing. I think you can go too far. Good for them for saying, look, these are our corporate values. We dont condone this, were trying not to allow it. Weve seen other companies that do that and i think it creates a positive sort of vibe, if you will, to that company and i think that they need to step in. There is a place where you can go too far. We all sort of agree with that. One is a question of where that exactly is. If you read these tweets that he wrote, i read, i think they are from him but im not certain, theyre unbelievabley racist. I think theres no place for it. Good for them. I agree with you theyre terrible. But hes also inciting she has to take it as well. At the end of the day, and this is very important in this country, standing up for what you believe in. At the end of the day as the situation becomes more and more tense. I do think this is on the margins of positive for the stock. I have no idea what this quarter is going to be. How do you trade the stock . I think youve got to wait for july 26th, hope they have another horrible quarter. Hope the stock prints back down to 16 and then i think you buy it with both hands because i do think there might be some runway for these guys going forward. Still ahead on the show, the fear index hitting a oneyear low as stocks hit new highs. Could that be a sign to sell . Still ahead, speechgate fallout, trumps kids and lots of protests. So what can we expect tonight . John harwood will be taking a look. Hi, simon. The plot thickened in the speechgate today because somebody stood up and took the rap. Well tell you all about it. What is your biggest jump the shark moment in life . Welcome back to fast money. Heard this one before, the dow and the s p both hit new record highs today. The dow positive for the ninth day in a row, its longest streak in more than three years, and the nasdaq still about 2. 5 away from its record levels which it hit exactly one year ago. Heres whats coming up in the second half the fast money. Oil has nearly doubled but the run might be over. Weve got the shocking chart that you probably need to see. Plus check out where we stand with earnings after hours. American express, intel, qualcomm and mattel all on the move. Well bring you the latest headlines as their Conference Calls continue. Thats later. First we turn to politics. Day three, of course, now of the Republican National convention under way with speakers tonight including Newt Gingrich and marco rubio. However, the nation is still buzzing about the fallout from the speech from what they call speechgate earlier this week. John harwood is in cleveland with the very latest. Reporter interesting day here, simon. First of all, to talk about outside the arena, overall this has been a very smoothly run and administered operation by law enforcement. We did have some protests this afternoon with some people burning an american flag, some scuffling and some arrests. But that was tamped down pretty quickly. The action has come inside the arena, most particularly with that controversy about the speech that Melania Trump gave that involved lines that were in Michelle Obamas speech in 2008. Now, the problem got worse because the Trump Campaign chairman, Paul Manafort, insisted nothing at all had happened. No cribbing. Heres manafort. We dont believe theres anything in that speech that doesnt reflect her thinking and we dont think that and she says were comfortable that the words that she used are words that were personal to her. The fact that there are things like care and respect and compassion, you know, those are not extraordinary words and certainly when you talk about family, theyre normal words. Now, of course, we saw today that that statement from Paul Manafort was not true, they were not her words that were personal to her because a trump speechwriter acknowledged that she had put those words into the speech. She had an explanation for it which was that Melania Trump had made them allowed to her from Michelle Obamas speech. She wrote them down, put them in without attribution. That represents an extension of this story. Now for the third day of this republican convention, well see if it puts an end to it but theres some republicans concerned about that. As for the program tonight, we do have two important speakers. One of them is going to be ted cruz, the chief rival to donald trump during the campaign. Will he endorse donald trump . We dont have a clear signal about that. And then finally, mike pence, the Vice President ial nominee, huge moment for the governor of indiana. Because he not only is Donald Trumps running mate, but this is his introduction to a national audience. Hes somebody who may run for president in the future. Well see how he does with that responsibility, guys. Presumably if cruz does endorse him, the arena is just going to erupt. Thats going to be a very magic moment for the gop. We will see. You know, today there were cruz supporters at a meeting who booed at the mention of trumps name. So we dont know exactly how thats going to play out. But yes, the roll call on tuesday went much more smoothly than the initial rules vote on monday where you did have booing on the floor. So i would be surprised if you had a dissent, a counter demonstration on the floor. Of course ted cruz is speaking and the fact that he is speaking, his delegates will want to treat that respectfully. John, its karen. What do you think the quid pro quo was between the two of them to have cruz speak . I think for ted cruz, its the chance to address tens of millions of people. Right, thats whats in it for him. And he wants to run for president. And for donald trump, it is a symbolic wrapping of ted cruz into the fold. Whether or not ted cruz says the words i endorse it is a signal the fact that he is here and speaking to his supporters to rally around trump. And we should mention you have a special program tonight at 10 00 eastern, john, here on cnbc. For the moment thank you very much. We stay within the political arena. Despite the chaos coming out of the republican convention, trump is closing the gap with clinton as stocks, of course, importantly make new heights. So is that more than just a coincidence . Scott welch is cio of dennessy financial partners. Good afternoon, what conclusions do you come to . I think that you have to be careful about if a follows b, that doesnt mean that b caused a, right . So thats kind of what youre seeing right now. I think theres very little correlation between the rally in the market and trumps rise in the polls. I did the rally in the market is more of a function of peoples perception that the economy is strengthening come boybined wity money in the central bank arena. If you look at the ubs survey that came out, it suggested that wealthy people in this country had record levels of cash because 84 , i think it was 84, believed that actually the election could adversely affect their income levels. This is already in the market. People have already thought about this. And if the market is rising, presumably trump is not that detrimental to what is going on. That would follow. Its not depressing the market, is it . No. You have sort of three basic scenarios. Its who wins and by what margin. Right now as we sit here today, the most likely scenario is that clinton wins the presidency and congress retains control of at least one of the houses. If thats the outcome, thats more political dprgridlock in washington, more of the same in terms of policies, probably no fiscal stimulus on the table given the partisanship and youll be dependent on the central bank to keep the rally going. If clinton wins in a landslide and happens to bring on her coat tails the congress with her and you have a unified Democratic Administration again, thats probably pretty negative for the market. The party has moved pretty far left in terms of its antibusiness and antigrowth rhetoric. What would be the cutting edge of that, maybe some trade deals . How would that impact i think youll be looking at heavy regulations, more restrictive growth policies that come out of washington making it more difficult for Small Businesses to get going, more difficult for businesses to do business overseas. Who knows. And what is the third scenario. The third scenario is a trump win. Its almost inconceivable to me of trump winning without gop retaining control of at least congress and maybe the senate. Under no scenario is there going to be a filibusterproof senate so theres still going to be a lot of gridlock no matter what, i think. But if trump wins and the gop retapes control of congress, i think thats going to be viewed as pro growth, pro business, even though trump himself can be wildly inconsistent in terms of his policies. But the business community, there are parts of it very concerned about the trade situation. Sure. Is your assumption here that those types of things do not get through congress and hes held in check on what would be very destabilizing in world trade. So the nuclear winner scenario to me is if in fact trump comes through on his so far promises to enact trade restrictions. I think the reason for that is no other trading partner is going to allow that to happen unilaterally, so thats the opening shot in a trade war, which i think is catastrophic for the markets and for everybody. However, even if its a gop house and senate, theres still filibuster by the democrats and theres still people in the gop who dont agree with him. So even if he tried to go down that path, i think it would be diluted to the point where it wouldnt bow catastrophic. Have a nice evening, thank you. Lets trade it around the desk. Whos first. You know, im not a politics guy but you talked about this is a fedinduced rally and i happy to agree with you. But maybe the fed isnt off the table for the rest of the year. Maybe they do surprise sometime this fall ahead of the election. I dont know what happens to the market. I do know what happened in february after they did it in december, well see. But all the yard sticks, all the goal posts that they have set up have seemingly hit so i think the one Monkey Wrench this market could have is a fed that moves sometime in september. I think ultimately first of all this is a market that is not pricing in elections right now, period. Based upon brexit, by the way, i bet most people in this country will wait until the day before before they feel like they know who will win this election. Based upon what the polls are doing right now and if in fact trump has closed some ground, this gets you even more to that case. Whats happened right now is youve taken some enormous risks off the table or weve lived through them. We have china which has stabilized. We have earnings coming through which year over year are not as bad as people expected. Thats what the market is doing right now. If trump gets his way and has trade restrictions and trade barriers and trade wars, it will be a disaster. I dont think thats going to happen. I agree with tim. Three and a half months is a really long time in politics. Its also a really long time in this kind of market. So i think its not really a factor. Other things, the economy much more important. Pete, quickly. No, go ahead, go ahead. I know youve got to go to break. You dont do politics . You should run, though, pete for something. Why would you do that . Because youre a goodlooking man. Coming up on the program, oil is cratering as stocks soar this month. Could there be a crude warning hitting the charts . A top technician will be here to explain. Plus the volatility index is hitting another oneyear low. But could that actually be a bad sign . Weve got the details and much more fast ahead. Approaching medicare eligibility . You may think you can put off checking out your Medicare Options until youre sixtyfive, but now is a good time to get the ball rolling. Keep in mind, medicare only covers about eighty percent of part b medical costs. The rest is up to you. 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These are the only Medicare Supplement insurance plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. Remember, medicare doesnt cover everything. The rest is up to you. Call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. Go long™. Welcome back to fast money. Crude staging a big reversal higher today but oil has been a drastically underperforming stock. Dom is back with the details. I remember where there was all that talk about oil and stock market prices, correlating, moving in tandem. Not so much lately as we hit record highs with stocks. The oil market has shown signs of more volatility both up and down and the net effect is after a strong rally to start the year, weve dropped over 10 just since early june for crude. No doubt a lot of our viewers and readers already taken notice of that breakdown in these correlations. Strategists also weighing in on that action. Just today Michael Purvis said the correlation between stocks and s p 500 prices is breaking down. They had been trading relatively closely for some time. Whats also interesting here, guys, is that energyrelated stocks and etfs have been able to shake off for the most part a lot of the recent weakness in oil prices. Theyre holding up relatively well. His recommendation to clients is if we move wti back towards that 40 mark alongside a stable stock market like weve seen, he expects high Quality Energy stocks like exxonmobil, chevron and halliburton to outperform, guys. Back over to you. Thank you very much. So where are we going on crude . Chart master carter worth is at the smartboard. Sure, simon, thank you. I thought wed maybe look at the previous bottom in 08, 09 and look at an analog. Two charts, im going to move them quickly. Now lets zero in. The bottom in 0809 is what you might call a triple bottom. After 29 sessions remarkably, we sell off 20 . Then after 81 sessions, we sell off 20 . Well, guess what happens this time . Almost identical. It happens to be a Double Bottom instead of a triple, but again after 27 sessions, we sell off 16. As of todays low, after 81 sessions, were here. So were having literally a perfect match. You come down, you come down, 29 sessions, 81. Here it happens again, this time 27, 81. But this is where the analog will break down. In this point we continued higher after pulling back. I think were going lower and crude to my eye is heading back to 40. I think you can draw lines anyway you want. You can draw it this way, take it away, put it back, you have a break in trend. I dont think this is quite finished yet. Where im thinking is the 100day moving average. So i think weve got another two or three bucks to go. Carter, thank you very much. Carter worth there calling oil down to 41. Guy, any reaction . I love carters work and i Pay Attention to every word hes saying, wise guy. Multi tasking. With that said, i think crude is rolling over. The ovx is still around 40, pete can speak to that. I think theres a move to the downside. But i think if you want to play stocks, i do think, and ive been waiting for this for a while, i think the refiners might have turned to the upside. Valero reports on july 26th. Huge activity by valero, huge option activity looking for upside out of something thats underperformed. You look at exxon year to date up 22 . You look at valero, its down 28 . So will there be some catchup. Look at the xle. That is a chart thats really interesting versus the crude chart we were just looking at. The xle continues to hold on to the 200day moving average. Until that breaks i think you can own the exxons and chevrons and big cap oil. Real quickly, simon, if you agree with carter, which ultimately many do, many should, 2 down, 3 down to a very key level on oil, its time to buy it. This is again ultimately its been very volatile. People have been looking and overreacting. Halliburton sees the market turning and sees a lot of Oil Companies with Balance Sheets improving. Rate counts will be up by the second half of the oil. If youre selling oil in this pit, youre doing what you did many times in 2016. I agree with them both. The conservative way to do it, chevrons, the exxon plus you get the great yield. 4 chevron, a little north of that. Still ahead on the show, the fear index hitting a oneyear low. Is it too quiet out there . Well tell you why one trader thinks theres trouble ahead. Thats next. Youre watching cnbcs fast money. First in business worldwide. Is that a real thing . Its a great school, but is it the right the one for her . Is this really any better than the one you got last year . If we consolidate suppliers whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Ok. Sure. But are you asking enough about how your wealth is managed . Wealth management, at charles schwab. Fresh ingredients, tokyostepbystep recipies, delivered to your door for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. Man youre beautiful [click] im coming back to you [click] welcome back to fast money. American express just reversing after hours and turning lower. Kayla has more on the comments that may have sent the stock lower. Kayla. Well, its moving lower on some of these comments from cfo Jeff Campbell as hes walking through exactly what forces led the company to a beat of 15 Cents Per Share in the quarter. He said that much of the benefit came from a sale that was largely expected of the costco portfolio as well as the fact that the Company Bought back a lot of stock in the quarter. He said there is more restructuring and more associated costs still to come in the back half of the year, that spending will be elevated but theyre committed to growth and they are kmcommitted to the higher end of guidance. He also gave positivity around the costco transition and how American Express is trying to contain some of that business, even as the cards transition over to citigroup and visa. Heres what campbell had to say. We are pleased with the demand for our products and the success weve had in putting cards into the hands of former Costco Program card members while of course closely following the terms of our agreements with citi. We expect to capture the 20 of the out of store spending of the former Costco Program card members as a result of our acquisition efforts prior to the sale. So yes, theyre trying to continue to capture some of that business but tried to show investors what the business would look like if they didnt have to include businesses that were declining or outgoing, like costco, like jetblue, and a couple of other portfolios billings in that case would have been up 7 . Loans would have been up 13 . Revenue would have been up 4 . Instead it was up just 1 and it was a miss. But it was really these comments about uncertainty and the word complex or complexity that campbell used at least six or seven times in just the prepared remarks about the call when he was talking about the second quarter. He said that the costco switch, theyre still waiting to see exactly how thats going to go, how many customers they can retain. The competition is getting particularly intense among other of their rivals, especially at some of the big bank issuers. Interest rates, he said that they had been prepared to talk about Interest Rates lower for longer, but now theres uncertainty there. And of course the elections here in the u. S. , brexit in the market in the uk and europe and all of that. It was really the complexity that theyre still talking about. Theyre trying to get to the bottom of. But no investor in any company, simon, likes to hear that word. No. I think we knew it might be rocky as they spend a lot more on the business to invest to try to make up for costco. Kayla, for the moment thank you very much. Lets trade American Express, guys. I dont think the company is terribly cheap. I think their whole rewards business is something thats putting more of an expense on the business. Youd be neutral at best. Id rather own paypal. Id rather be visa. Id rather be in visa or mastercard over American Express. Ive been in American Express and all its been ever since the costco deal, this stock has been under pressure and had a difficult time. But then you get past that. Youd like to say yes but it doesnt seem to me theyre gaining necessity ground begins visa or master right now. Lets switch to the vix today. They say the fear index may spike. Mike joins us. As you point out, very low in the 7th percentile and even lower. We saw 2 times as many calls trading as puts. About 13,000 traded for 1. 93. Those would be bets than vix would be higher by november expiration. Thats actually how the vix futures curve has been shaped. Not much volatility predicted between now and labor day but potentially a sharp spike when everybody returns from the beach. Thank you very much. For more options action, check out the full show 5 30 eastern every friday here on cnbc. Up next on the show, the final trades. Im here at the Td Ameritrade trader offices. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. Td ameritrade. And so to the climax of the show, its time for the final trade. Lets go around the horn. Pete. Carter worth was just talking about oil and all those Different Things going on. He thinks its going lower. I dont necessarily agree. I think Conoco Phillips is a buy, its going higher. Despite the cruelty of twitter, im buying the stock. I think its going higher. A lot of things are target to click. The message is getting through in terms of the core business. Karen. Yes. I want to be long volatility here. Lots of ways to do it. S p puts are cheap with the vix here. Why long volatility . As a hedge. Guy, just finish it up. Yeomans work, simon. Yeomans work. What carter worth didnt mention is viacom which is too cheap at current levels. Thank you very much, gang. Im simon hobbs. Catch fast 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 frinltds, im ftrying to make yu some money. Call me at 1800743cnbc or tweet me jimcramer. Its all up to you. Thats right. You have to figure out what you want and what you can handle in this market