1. 5 away from a new alltime high look at some of this weeks standouts, semis surging more than 4 for their best week in about two months retail rocking, gaining 3 on the week, and one stock in the front lines of the trade war, caterpillar, pulling back for a gain of just over 3 trade optimism seems to be back but is it enough to sustain the rally . Guy. You find yourself sometimes like the salmon swimming up streams. Theres an l in there. Thank you i feel as if i am one now. I am swilling upstream and it feels futile, but i will stick to my gun. I still think the headwinds are out there, and i think the market is due for a significant selloff i know there is trade optimism i get it i know this time the tweet came from chinese, not president trumps twitter account. With that said, i think it is delaying the inevitable. The inevitable is they get to the table and walk away with no deal, and thats somewhat negative for the market going forward. Listen, we had a bit of a rally over the last days, 1. 5 from alltime highs, but we havent gone anywhere for 18 months we get close to the president , theres a market sell off, and the president says were getting close. I think you have to have the mental model that the trade war will go on at least until the 2020 election and it will continue to grind on the economy. I dont know if the stock market goes down a lot more, but i know we probably go side waysuntil 2020 election. But even as trade war concerns persist, as time goes on, with Jerome Powell just saying today in switzerland he doesnt see a recession on the horizon, isnt it more positive than when he said it a month ago . I mean the effects are persisting hiv a financial crisis, i dont have any confidence they can predict a recession any better than anybody else. I was about to say that those left here i dont think we listen to the fed to talk about the economy. I think by definition of their manned date, the fed should be a lagging policy assessor. The more important thing this week was we had major reversals in a number of downward trends in terms of risk you had emfx starting to get very scary reverse, and probably most notably you stopped the downward plunge in bond yields which we all made to assume just because things are going to a lot lower it means the world is coming to an end, when a lot of it is related to the European Union and getting pulled down by bund theres no disputing we had mixed data we had both sides of the manufacturing data, but then the ism services which is a big part of the economy, actually showed much surprise to the upside. The labor market, if you look at the household survey, there were components that were very, very concern. We are not running out of gas any time soon. We have a fed that is accommodative and the bears have gone quiet for a couple of days. They have to. Back to the market, it is important to talk about the changes and certain risk assets. The treasury yield traded 144 earlier this week, it is at 156. It feels like it is tentative bottom i think it is interesting. When you think about the s p 500 it has been a flight to quality among equity investors, but look at the russell 2000, small cap it didnt have a great week. It massively underperformed large cap, which is interesting to me. The dollar, a lot of traders would have love to see a bigger pullback with stocks coming back up. It is only about 1 off the highs of the week. I believe we can sit here and talk about recession versus market correction, i think the best thing to happen would be for the s p 500 to get back above the prior highs we made in july and see how it acts up there. To your point, bk, every time we have been above a prior high over the last 18 months we had sharp corrections. So the point is can we get up there and stay and establish a new range. More importantly, then we need the maga names, other than microsoft. We need them to confirm the new highs. Theyve not confirmed, amazon, google and apple have not confirmed one new high in the s p since also, the higher the market goes the more likely the president comes out and says, were not going to make a deal with china that has happened every time. The less likely he will come out and say it yes he has more negotiating power. He will stick with not having a deal. Exactly or he will have a harder line in negotiating. Lets say we do make a new high, lets see what happens up there. Lets see what holds lets see if we start to make progress on the trade deal theres a lot of things that have to happen for this market to rip a lot higher. Do we have a bit of a runway between now and whenever the trade talks are, which are scheduled sometime in the first week of october . Sure we do, and we do especially in a world where hong kong, at least for the short run, has ironed out a lot of tension. Thats another big event of the week, lets be clear as china goes into the communist party anniversary, which theres no room for anything to get in the way of that, so we have a window it is very important that the market, which also though, dan, youre right, lets see what we do with the new trading range. But the old trading range was one we had to get through, and we had to back fill to get the s p up above the 2925 level. As 25 sessions we have done it we have the iyt. I think transports, which are maybe more cyclical in this environment than semis, were maybe the best tell of the week. You cant get runaway bullish, but after all of the bears we had and the reversals, it gives you time. Dan brought up the russell. It is interesting. This time last year the russell was making an alltime high, and it never got back to confirm the recent high in the s p didnt get anywhere close. Now here it is at 149. I have said a number of times and i believe this, 145 is sort of your line in the sand in iwm. Again, it does not strayed parts well im not looking for something to back up my dog, mccleary, but i will mention through the russell 145, in my opinion drags the s p 500 down with it. Can i ask a question . As the russell traded well as the s p went to rofecord highs earlier in the year . No, it hasnt. Then why do we care if the russell hasp performed well this year. It will be one of the first to show the slowing consumer or the cap ex freeze. I think it is important to remember as we talk about all of these things that the s p 500 is up 19 for the year. As we talk about as tim mentioned, all of the bearishness. We were down 3. 5 from an alltime high, still up 15 , 16 on the year. You know, things are not bad, it is just really trying to figure out what is the risk reward. I have been saying this, i feel like a broken record it is not a great environment to putting new capital work, especially when can you define that when you say one up, two down, what is that im thinking about the risk reward relationship you think about every new high we had since january 2018, it has been incremental, a couple percent above the prior high and then we had the plushflushes. We had a 7 flush, a 20 flush from the highs you get my point i do, but im not trying to make people think one up, two back, that the s p 500 is down where it was in the last couple of years they have continued to make new highs. They havent been bombastic but it is there. I have quoted these numbers since january 2018, weve been largely side ways, but semis, a number of things have gone higher. Were saying valuation is important, were seeing multiple expansion. Thats a figure of risk too in a way. So were not having the fundamentals confirm the higher valuation. The new highs are not confirming everything because theyre not done on big volume and then we see the flushes lower. All that tells me is that it is risk the risk is not to the upside but the down side. I would say about the small caps bringing back to that, theyre heavy regional banks, right. They make the money off the heavy interest spread which when the yield curve flattens is not that good. If you are looking at a small cap as a leading indicator of what the yield curve might be, you want to see the banks rip higher because people think the yield curve will steepen again. We were talking about how it seems like the longest shortened week ever. It feels like eightday week. Eight days a week is a beatle song. So we are done with the halls . Done with the halls what should be the first thing you are looking for on monday morning monday morning. I guess the yuan is no longer in our crush hairs so i think rates would be important, the guys would be able to back me up on that. I think in a lot of ways you have to continue to watch the res you will i think the russell leads by six months the s p go back and look last summer where it topped out and where the summer topped out. So i would youre not a believe in the russell as an indicator, what do you look at . I want to see a little bit beige, people potentially short covering, people taking off a little bit of that negative expose so you want to see followthrough on big volume thats what i want to see, particularly if we are going to break out to a new high. I want to see it on big volume. All right we are just Getting Started here on fast money. Beyond meat getting smoked after one analyst said, sell this stock. You will hear from the man who made the call and later breaking down what you can expect from apples product. Were live in new york city, much more fast money 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. Got that on camera welcome back to fast money a sign of the times in the ipo world. We were talk wing advisers and shareholders about skaping its upcoming ipo this comes after sources told cnbc that the company slashed its valuation in half due to weak demand. Is we work on the way to scrapping its ipo . Could that be the best option, dan . It is interesting the wall street journal is reporting this, saying that the ceo is meeting with the head of soft bank to see what they can do with this thing we have had 100, almost 200 billion of tech ipos come this year everyone knew it was a controversial one, at least from the standpoint of Business Model because of how capital intensive it is, and then you have the huge ramp year over year i dont think theres a positive spin either way. If it comes and it is not a great deal, we are dealing with look at lyft, uber, theyre making new lows every day. Do we want another name like that, a 25 billion publicly traded company not making money a lot of people are skeptical . I dont think so by the same token, if they can get an infusion from soft bank, then it kind of shores up one problem the market has in my opinion. On top of all of those issues there are also the Corporate Governance issue, questions about the ceo, the board, how diverse it is. And im a huge fan of the network as all not only am i a participate from time to time but an avid viewer. On the squawk show in the mornings, in sam zell was on and threw a lot of cold water on we work if he doesnt like it, why should i we mentioned a way to play this space. I will say it again, nasdaq makes an alltime high and dan ridicules me all the time about exchanges, although it is not in the equity space, the Chicago Mercantile Exchange continues to make alltime highs and, might i add, isnt terry duffy going to be on our show in subsequent weeks . I believe in october. That will be very kpooesing. Yes you can read more about we works ipo plans from cnbcs alex sherman on our website beyond meat getting grilled after davidson initiated coverage on the stock, with an underperform beyond meat falling more than 3 on the day. Brian holland, Senior Research analyst at d. A. Davidson brian, welcome to you. Thank you. You think the total address of the market is smaller than what most people, most analysts are thinking, and you are saying it is smaller than potentially the milk market . Yes so i think on a relative basis thats right we view plantbased as a solution within a Broader Market there are, you know, roughly 30 to 50 Million People in the u. S. Who are lactose intolerant only 15 to 25 million identify as nonmeat eaters. Thats important to us because the hightouch consumer in plantbased milk represents about 60 of the purchase. I think if you hold all else equal with reflex to the occasional buyer and you translate it from plantbased milk to meat, i think you get to, you know, a number thats probably at best 75 of what were seeing on a share basis in plantbased milk frankly, it probably ends up lower than that because meat is a much more fragmented market than milk. Could we be at a point, brian, just to play devils advocate, where theres more than just the flexetarian and the people that need the alternative . To me, there are people that want to eat the alternative Meat Products because they want to lessen their Carbon Footprint or other environment social reasons, are we underestimating that cohort . No, i think that market exists i dont think plantbased meat is a fad i think it is here, i think it is here to stay. I think it will take a long time it will be a slow build and, again, those folks who are thinking about the environment and to the extent thats part of their decisionmaking process, theyre not necessarily a frequent buyer most categories in food are, you know, largely driven by the core audience, the folks who will go in and buy once a week, maybe once every two weeks so i think when you are comparing plantbased milk and plantbased meat, and thats what the company is doing so thats what were working with as a proxy, i think thats what is going to dictate this category there will be folks who will my great over i dont know that they migrate over in such a frequent a frequent manner, such that it would drive the kind of numbers that are being thrown out there right now. They will be there, but they wont be there every week. Okay. Brian, thanks for sharing that with us. We appreciate it Brian Holland of d. A. Davidson with an underperform on beyond meat his price target, by the way, is 130 a share. Woo hat is a flexatarian you go back and forth you eat regular meat and alt meat and you dont have to find an alternative, but you can choose to. Not like a regularatarian. I would not consider myself a flexatarian. Sometimes i eat vegetables, sometimes meat, sometimes i eat them both together thats what normal people do nonetheless, beyond meat held 150 today, probably trading wise, thats a good place to shoot against. What is interesting, i didnt hear hem going against the Competitive Landscape at all my view is im not concerned about the Addressable Market i think we are seeing this kellogg, hormel, tyson. Thats the probably with the stock. Thats why when you look at where the other companies trade even in their best days, this is just a chipwich. That was a fantastic sandwich, by the way. Can flexatarians eat that more on beyond meat and that call on cnbc. Com im millio im melissa lee. Mere is what is coming up next netflix is under pressure as the streaming wars kick into high gear. What does the company need to do taon top well debate it when fast money returns it was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back to fast money netflix has been a big underperforming over the past few months, falling more than 18 . There could be more pain ahead as disney releases its new streaming service, but there might be a bright spot for netflix. Julia boor sto Julia Boorstin is in l. A. With the story. Hey, julia. It is worth noting we have seen a reversal of fortunes between disney and netflix over the past year disney shares gained 27 while netflix stock has fallen by 16 . Disneys market cap is now nearly double its streaming rifle, just a little over a year ago netflix briefly had a higher market cap than disney now, two new studies project a shifting power dynamic netflix will intro to 219 million by the year 2024, but its dominance will fall with amazon prime growing to 127 million and disney to 82 million subscribers over that same time period so in the face of shrinking market share, where will netflix go to find growth, especially considering that netflixs u. S. Subscriber base shrank last quarter. Now, it is projected they will look overseas and could ramp up investment in local language films in series in australia, poland, germany, france and the netherlands as well as russia. Those are big netflix market with relatively few originals. We have to see what other threat other news streaming services will pose to netflix in addition to disney plus, next year warner media is launching hbo max, then nbcs parent universal getting ready to support its streaming service and dont forget apple tv is expected to launch its Apple Tv Service by end of the year we may learn more about the apple streaming service, its pricing as well as the precise launch date an apple iphone event scheduled for tuesday. Back to you. Thanks, Julia Boorstin from l. A. What do you think . I think it has been a trend for a highmarket stock that on some level has been executing except for the best days in terms of stealing market share and having the ability to almost price their service in other words when they started to raise prices people were concerned and expected to be churning. They proved it quite wrong except when disney pops in with a disney plus that is an offering that is very, very competitive. I think the most important thing is multiple. I dont think netflix is failing per se, although i dont think theyve proven they can be cash flow positive. I think disney has come in here and rerated and people are starting to question what im paying for. Thats the main point earlier this year when they said they would have 3. 5 billion dollars in negative free cash flow, half a billion more than previously forecasted, that was the issue when facing down a huge competitive threat when a lot of content is coming off what j