>> yes. >> or if the economy outlook better. >> in a moment when it's good enough given a patient fed and i think that until we get some news that says it's otherwise, that's kind of where we are right now but, again, look at a long-term chart it looks like a strong bounce. >> quick answer on a deep question from mike santelli in 10 seconds. >> he always nails it. >> thanks for watching. >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlook new york city's times square i'm melissa lee traders are tim seymour. karen finerman, tim grasso and guy adami as the markets sore off the lows the signs of life from once thought dead stocks. plus check out chairs of activision the sock got wrecked this year but did it get extra life? macy's the worst performing stock this year but something about the selloff the chairwoman says investors get wrng. she gives the fine print but start off with the markets

stocks rally on the art of the deal we hope sending the dow soaring more than 370 points. the s&p closing above the 200 day moving average since before the big december selloff let's get to eamon javers on the deal talks. >> the president of the united states said two seemingly contradictory things during a cabinet meeting today. on the one hand he said he doesn't like the showdown deal that's coming together up on capitol hill he says this is a democratic deal it's bad for the country on the other hand, he said he doesn't think there is going to be a shutdown of the government at the end of the we can the question is how can we have a shutdown avoidance while not embracing this showdown deal here is what the president said earlier today. >> it's always nice to negotiate a little bit great so whatever you get. i would hope that there won't be a shutdown i'm extremely unhappy with what the democrats have given us. it's sad it's sad they're doing the country no

favor. they are hurting our country very badly but we certainly don't want to see a shutdown >> so the president there saying he is extremely unhappy with the deal at hand but on the other hand he doesn't want to see a government shutdown. so where does that leave news maybe the president's carving out some political space in which he could ultimately sign this deal while still denouncing it as bad deal and looking for additional funding elsewhere in the federal government to continue to build the wall on the southern border. won't get him everything he wants but it might get him just enough of a face saving opportunity to sign this teal and avoid another disastrous government shutdown which a lot of republicans on capitol hill are urging him not to do and then the other area where the president soda today was seeking wickle room is the china negotiations the president said today that the march 1st deadline for the trade negotiations that are going on in beijing in week, that is a hard deadline, he said but he also said that if he gets close to that march 1st deadline things are locking good, he

might let that slide a little bit. the question is here, does good look like to the president and what on what terms would with he let the march 1st deadline slip? he hints it's a possibility. that gives more wiggle room on that negotiation as well. >> the willingness to be flexible on the march 1st deadline is a positive thing in terms of finding the money elsewhere in the government for building a wall, i mean what was put forth i believe was 1.37 billion-dollar where would one find 4.5 billion not approved by congress to build a wall. >> well the federal government is huge. but that's more than you can find you know in the cushions of the couch. so the question is what do you do my understanding is they've been looking at this carefully going back to the summer and they do have a sense they can reprogram some federal funds toward building walls and they have a sense that their traunch of money to do that a certain

traurj that might provoke resistance a third traufrmg where they feel like they might face lawsuits if they repurposed that for wall funding. how much of the first traunch can they take and how many dollars are there? that's a question i don't know the answer to. but they've been scrubbing the books hard looking for money to move around in the federal budget. >> thank you eamon javers at the white house. well tonight was the cyclical secret he is materials financials industrials all seeing wig gains these are the groups that helped lead off the market lows will they drive us back to new highs guy? >> well the cyclical names we talk about will they drive us? the hope is they will. i'll tell you i don't think that's going on now. last night when the s&p closed at 2710 i started shoet saying i think we roll over from here clearly that's wrng. now we're some 35 points higher tp i think this is a level steve talked about i'll say this although citi bank rallied literally 30% the last month, month and a half all the waengs names have done strerdly well, most of them with the

exception of jp morgan are in a pretty defined downtrend from the beginning of 2018. i think what we see is like what we have seen before, seeing a bounce off the oversold condition preponderate banks banks like citi make lower lows and lower highs. that's what we see i've been wrong directionally with the broader market but if you look for the banks to take us out, i think this is where they roll over. >> in terms of the axe today in grasso the action in the cyclical does this tell you it's china trade hopes. >> it's china trade on industrials. >> um-hum. >> china trade on easterlies. >> what's the shutdown is there anything in the rally. >> i think thaegt both within the rally but i think we're ready to roll over industrials can reach a i will will further but the other two i think are ready to roll almost immediately. >> go ahead. >> oh, i thought. >> go aheading with, karen ladies first that's how i roll. >> i think the rally for me it's more about trade i think if we don't come -- if we don't avoid a shut -- we have

to avoid a shutdown. i think that's the easy money. it should have been -- should have been in fl already. to me it's all about china i think that a delay from march 1st is somewhat baked in already. here we are february 13th. you know, we don't have enough time to come to a deal, right. i think the assumption is baked in by march 1st if we see progress let's continue to negotiate. if we don't get that i think that will be really bad. but i do agree with steve that the industrials have more to run if the china trade continues in a positive momentum. >> if we keep running into a potential trade deal what happens when we actually get a deal. >> i think we have room to run after the deal before we were confronted with a couple of dynamics i agree with karen, the art of the deal is that there is some kind of deal i think that's the presumption the things i get most encouraged about a day like today and the last bit of the trade for the market and see high yield and credit continues to improve. if you think about what took the market down in december it was

that the markets and credit side began to seize up and saw something we hadn't seen we had volatility effectively from february through to october without a deterioration in credit that improves if you look at the v shape, the industrials have gone v plus in and they're probably 4% above where they started this mess they are correcting at least better to a better place and arguably if you think about the things that are moving the market i do agree that we -- we have a dynamic where the fed off the fable is something that gives people reason to not really scream for the worst. imprisoning the bottom line is we know earnings are getting weaker we know the market is probably reasonably priced. but without the fed being on russ. >> what -- they are not off the table this is the pushback in the back of my mandi what happens if any raise that would upset the market the way you pose that question what happens after a the china deal, i think the market -- that's the biggest sell the news event in my mind right there it can never live up to what we expect. >> i think if there is a china

deal what happens after the china deal is then there is a new negotiation with europe. there are now second biggest trade partner. and is there some grand deal with europe and tariffs imposed there. we go from one side of the globe to the other and don't underestimate i think one of the headlines today was bipartisan group in congress found no collusion between the trump administration and russia. i think that was part of this as well so maybe it takes some of the mueller investigation off the table. i don't know if that's the case. it it just seems that was part of it as well. again i'll say the banks have traded extraordinarily well. and i didn't think from 2,500 we'd get to where we are now but i do think you start to see again some -- some lechls where it would make sense to take profits specifically in these banks. >> where does positioning -- how does that play into it i read a bank of america merrill lynch survey of fund managers with $5159 million under management and most preferred cash over equities the allocation to global equities at the lowest since

september 2016 here we are in the markets. >> let me ask you clarify when you say prefer cash over equities on the margin or they would have a big are allocation of cash deanna they would to equities that would be kind of. >> i don't think it's a bigger allocation to cash than. >> sort on the margin a higher >> a higher cash allocation. >> than they've had in the past. >> yeah. >> my view on that is i think positioning is everything. where we were positioned andrea where groed and fear was at the end of december, we have kind much scouted the numbers over the last few weeks but we're at a place at least bears are at a lo low going back to june. bulls have certainly reasserted themselves and to be clear will also on the government shutdown i forgot to mention this earlier if you think we rallied on a possible deal how about the month of jan where we had the best january in history do not delude yourself into thinking this is a dahm process it's china i think positioning is everything which is which people should be nervous right now. >> with why are they sit something -- how are they sitth

on cash. >> why are they cautious that number took me off. >> could that be the next play. >> in could be definitely. >> it's been positioning. >> off the china deal you have all the money supposedlien oh the sidelines. >> i think the pain trades to the upzblood the point to the oversold once you get bit by the overselling of the macromarket you kind of sit on your hands. they've watched the market rally tremendously in january. and they're still sitting on their hands. i think ner looking through saying what do we have to look forward to i want not going to be earnings. >> well mike wilson is chief u.s. equity strategist a at morgan stanley he says take profits because the rally running out of steam mike great to have you sounding like one of the fund managers who are so cautious after a china trade deal, it sounds like you think there is nothing to look forward to in the markets in terms of earnings growth as a catalyst, global growth as a klgtsist, not there. >> to me trade is not really been the main issue. it's been a side show to the business cycle, right. let's go back a year ago where

we were worried about last year the kpee was overheating, fed has to go faster and tighten financial conditions and ultimately lead to a rj maen squoez which it did and a profits down cycle that's where we are. the thing i don't hear people talking enough about is the just acknowledging that the profit cycle is really rolling over in a meaningful way like we haven't seen 2015 ob 2016 that doesn't mean a economic recession. but our work suggests gnat revisions are not done yet let's back up. the reason we rallied so much, the main reason is because the fed pivoted that was unequivocally positive we wrote about that at the beginning of the year. we said the rolling bear market is turning into a rolling bottom getting back to the materials and banks and semi conductors and homemade builders and the things that got hammered em over dm which is a trade we he spoused allier cyclical over confesses. but that's played out. i agree, what's the next thing to drive us higher

i think you're all right it's positioning there is carbon the sidelines retail hasn't come in yet and the reason fund managers hold cash is because they are getting outflows. still shea outflows and looking at the same thing as the earnings are not good. near nthey're not excited about the fundamentals they understand they have to play but fundamentally it's hard to get excited about the zero% earning cycle this year. >> in terms of the earnings revisions we have gone through the bulk of the first quarter earnings subsection. are you anticipating just more revisions to the full year coming in the second quarter, the third quarter? and what in your view is the primary catalyst behind that is it a stronger dollar what do you see's the factors. >> all of those. first of all, the revisions for the first quarter come down to the point where we have negative year over year growth and the consensus numbers are baked in but the companies haven't guided for every quarter. the scones sus now negative 1.5% to first where

ten two% in the. >> and the hockey stoik in the fourth quarter of 9, 10% that hockey stick needs to many can down down. i would argue the first, second and third quarter are deeper troughs. that's transpiring over the next 30 to 60 day sales will slow materially the margin story which i don't think is fully appreciated and the dla as you pointed out is stronger than everybody is looking for including us by the way. it's now -- up 9% on a year over year basis a 4 to 5% drag on s&p earnings all those -- all those things combine to lower company guidance probably over the next 30 days. >> so we talk about the s&p as the market but it's 50 oh or more actually stocks so within that though we have the ones that bet and ones that miss and where do you think the industries are that are more likely to beat and ones more likely to miss. >> that's the right question

the risk n they may be cheap and pricing in further cuts wae wary of the high growth multiple stocks. where the revisions haven't come down retail is is one area if some of the software stocks look vulnerable i would say on the other side we have stocks that are pricing in still a slowdown quite frankly, the banks are not pricing in a recovery. they're also going to see further earnings refrgss what you want to do is let it come in a bit buy the things cheaper that's why we are screwed towards value. em that's where the downside is priced properly. even here i argue it's not priced appropriately zbloop so mike, how come -- is it shocking to you that other strategists haven't noticed the falling estimates in earnings or haven't ac flojd them the way you do you are the doom and gloom guy or the realist >> how come others haven't >> i don't know. i think -- i think price momentum has eyed a lot to do

with it what i marry is the stock is up so it mbue priced in i think -- i think people confusing stocks being up because of fed dovishness and maybe a trade deal and maybe a government shutdown. which i dwroe is is not a big deal but makes female feel better and stocks are up for that reason and not really telling us anything about the trough i think there is one -- there is one -- so a comparison to first quarter '16 that's similar, right. fed backing off, china stimulating, companies missing numbers, stocks are going up but there is a big difference. and the first quarter '16 that was the fourth quarter of negative year over year growth this is the first quarter of the negative year oh over year the comparison z are braulgts good going forward it's apples and oranges on the comparison that's why i'm not excited about the full year growth our guess is it's flat earning growth year for s&p you have to find the companies that can grow in the environment which aren't overpriced a month ago easy today it's harder but that's the

challenge. >> year end bull case is 3,000 what's your year end base case. >> 2750. and that's the nafrt we had a year maf. >> head home at this point. >> not really because there is great trading opportunities right. it's a big range appear. i wit for the next big pullback saying there is a great opportunity like in january that's where we are. >> mike wilson, thanks. >> mike sticks with the guns and does thoughtfulwork. i think that's steve's point it's interesting because apple gave the warning the stock traited at 145 not a lot changed. 170 now. sky works game out warning 78183 now. maybe you have to say there is pricing and good news to mike's point there is bad news coming i think again the market ahead of the skis. i thought -- i didn't bring him back i mentioned mike by maim. >> just don't continue referring to mike. >> changing the conversation. >> i lost my train of thought. my point is this i thought we were seeing a pullback for a while but stick to the guns i

think we are rolling over. >> still ahead as the market soared off the lows the one left for dead stalks are revoifd. we tell if you you you should believe the wouns. check out activision up 3% the company conference call under way and bring you the latest and the unbreakable netflix. shares of the streaming giant outperforming the fang stocks is there room to buy? the trader weigh in much more "fast money" right after this. building a better bank starts with looking at something old, and saying, "really?" so capital one is building something completely new. capital one cafes. inviting places with people here to help you, not sell you. and savings and checking accounts with no fees or minimums. because that's how it should be. you can open one from right here or anywhere in 5 minutes. seriously, 5 minutes... this is banking reimagined. what's in your wallet? ♪ ♪

our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest.

welcome back to "fast money. we have a new alert op amazon in general motors let's get to eric in the newsroom with more. >> that's right. amazon and gm, they're in talks to invest in electric pickup maker riff on. according to reuters citing sources. the value stakes value it between 1 and $2 billion riff yan based in detroit is seeking to be the first company in the u.s. with an electric pickup truck if negotiations are successful a deal could be announced as early as this month. but there is a chance of course that talks could fall through back to you. >> thank you very much eric chemy. >> the pickup is one of general motor as protective motivatable vehicle. >> it's not without risk making the shift to ev but certainly a hunl risk if they didn't make that shift. >> if any lost that share to somebody else like tesla who might make one. >> the future of the business depends on it. they don't -- i think gm's is

chief, cheap for a while doesn't matter they put out good earnings it seems impervious to upped is because but i'm hanging on. >> just being in the headline with amazon a huge tailwind for gm up 16% year to date i agree feels like it's rolling over but it's a tailwind for them. >> gm has a major ev auto ton must should be getting a multiple one 20th of teslas. >> to netflix adding to the more than 30% gain this year after william blare called for more than 20% upside. they say wall street is underestimating the lineup william blare calling the move roam an at this year's oscar a milestone for the company with shares up 50% from the lows. there room to buy, steve >> so my thesis or my outlook was as netflix so goes to the market i think the market is rolling

over i am bullish on netflix. i like the stock overall if the market backs up in backs up. but ultimately longer term i think netflix is a stand alone entity with zero competition. >> a couple weeks ago when it was 330 or so it wasn't a would you rather but i imposed it. >> you're doing it again. >> i'm doing ben again i think there is a good chance the market rolls over and trades 300 maybe the 350. are here with the 355. i think the broader market is rolling over hoolt of analysts getting behind netflix. price targets being raised the next level in the name is 375. but i think claysing i would avoid the rather. >> what was the rather would you rather. >> i don't remember. you know. >> it was netflix or disney. i don't remember i think netflix or disney. >> can i push back. >> when you talk about zero competition. >> yeah. >> i mean i find that hard to believe. you got some very big companies.

>> what is television i'm trying to be -- azmodan prime, yes hulu yes. >> disney, yes a big competition tor content. so even -- the -- so the cost have to rise and you are competing right for you know people are going to sign up some dtc, so you just totally dismiss anything else. >> i think the cutting episode, i think everyone is going to have a whole bunch punch bunch of pay per month streaming entities i think everyone did shall did shall there is enough for them all to survive i wind up spending the most of my time if i stream something on amazon prime or on netflix but netflix themselves said hbo is the competition it's fortnite are they getting into that game too where you have seen that space struggle do they have another entity to sort of kind of fill the covers as well. >> there is no question that gaming is taking a different

demographic appear audience and different consumption tastes in media. injury they all feel that way. for an analyst to say we don't think netflix's content is priced into it or underestimating the value of the content? are you kidding me stock trades at 150 times earnings. what are we trading it on? the view that amazon had a few emhily as since orange is the new black that's the point they've come from being a distribution call to a content place. telling me now that we think that content is undervalued. i think content is overvalued. and if it is i would go to disney right away. >> for more on the nets flicks raly going to cnbc.com first in business worldwide here is what else is coming up on fast >> it's alive. it's alive it's alive p it's alive. it's alive >> you got that right. because a number of of once left for dead stocks are soaring. we tell you which ones have more room to run.

plus. >> get in we're going shopping. >> shares of macies left in the dust but karp finerman says the e llxpins zun. shwi ela there is much more "fast money" right after this

well back to "fast money." markets soaring today with all three major indices now up double digits off the december lows, giving life to once left for dead stocks. let's get to dom chew in the newsroom with more. >> melissa stocks roaring to the upside as the bulls look to take the s&p 500 back above the 200 day moving average tradeding of above the longer term trend line since december 4th. and a staggering upside for stocks since the christmas eve lows but many so of the biggest beneficiaries have been the stocks hit hardest in 2018 for example take a stock like shlumbege and oil services up around 22% or so so far in

the 2019 united rentals lost 40% last year but up 28% this year. similar story here with casino giant wynn resorts, a 41% drop last year turning into a 28% gain year to date. general electric, also falls into the boat. lost 57% last year it's rebounding by 32% this year and then mattel thanks in part to better nan expected earnings report shares surged by 68% or there abouts year to date after falling 35% last year. melissa these are some samples of the believe the founds trade. will trade be sipping don't stop believing. >> dom chu. >> a little journey. >> like the favorite group right. >> i wouldn't say that but i appreciate you asking.

they're fun in. >> i thought that was ring tone. >> we thought it was a perfect time for another round of. >> trade it or fade it. >> that's right trade it or fade it so let's kick it off with mattel down 35% last year up a whopping 65% this year. tim seymour, this was a 2017 power lunch stock drop pick of yours. the timing was off. >> the song don't stop believing would really apply i kind of still believe. it's not a good investor as they left the winners run and don't let the looser run this is one arguably i let run too far. i'm in jail on this somewhere south of $20 but the turn around is impressive for a company where expectations were so large barbie back north of 10% in terms of growth. hot wheels is back i think the worst of the story for mattel in terms of the bankruptcy of toys "r" us is behind it. >> forgetting what you paid for it which is i think totally

irrelevant. >> trade it. supposed to say that first. >> yeah you came to it today with fresh eyes, no history of owning the stock everything you say is true even though bounced a lot, we're here it seems the story is very much. >> because i spent so much time sitting to your right op left which is i need to own this tomorrow fresh today to stay in and the bfl is we had refirmgs that a turn around in management and story is alive and well and the expect aches this company is going out of business were overstated new movie releases are reported and. >> karen are you unclear on the -- the trade is. >> trade it means buy, no, no, i'm saying he sounded like a little luke warm because oh it's run a lot maybe i fade it then he did say trade it. >> but i just wanted it clarify. >> i didn't say anything for a long time. >> what did kirn say at this point. >> no, i'm with him trade it.

>> trade it. >> i think the positioning is ultimately -- i would fade it. i think the positioning is ultimately what created the bounce but it's bounced twice now that stands to the positioning of it. i think you cannot buy something so overextended. >> let's move to wynn resorts. guy trade it or fade it. >> a lot of wynn's problems are self-indoused. contessa brewer does a agreed job on the wynn story. win from 200 to one hundred in the straight line over the previously six months. you you would think i'm playing the game correctly given have yousen on the market i would say fade it but you would be wrong i'm going to say pull the graphic please ding ding you say what are you snuts yes, is the short answer to that question and mccaul gaming revenue down year over year i get it bad numbers but valuation is is interesting. the stock is bouncing. if you have any hint of a trade deal in the next couple of weeks you see a rally in the name.

although i'm pessimistic brewedly i think the market in wynn can go higher. >> i agree with the last statement but i say fade it i agree with the last statement that see the last pop on a trade deal any hint as you worded it of a trade deal you could see a pop. that's one to fade it's a already in the name china trade is there macao. >> who is the golden week holiday not for you personally. >> actually early signs god. i think gnat mcstory has been so devastating for the entire space. i actually am a trade it players on this game as i said trade it >> all right low pressure mets move to the energy space grasso, trade it or fade it. >> i fade this as well if you look at the short. >> you like nike. >> we're getting there a couple more names left. correlated to oil. they already had the run we're in oversupplied state. i would be fading -- fading the

entire face. >> karen >> i don't know. i mean i get -- here is the thing about the game we have thengs down say 6040%. >> are you going to. >> i'm going to trade it okay. >> then you're talking down the game. >> well. >> i think something about the market not the game not the game. >> all right the market. >> we have a stock down 40% right from 100 to 60 then up 30%. it's only back to 78, right. just because we have seen the big percentage gains doesn't mean the story -- you know that it's played out. also these are companies with debt the enterprise value hasn't moved much therefore i'm still trading a lot of it. >> trade it. >> i tell what you i think the oil services space is one of the most fascinating out there because we talked and i talked about how the short interest in the energy sector at record highs services under more pressure i like slb appear hal here. >> united rentals, this is definitely a karen finerman name trade it or fade it we know the answer i think karen. >> the answer is trade it,

right. some people point it out had a big bounce talked about the bounce isn't so big. people point to the debt here. not understanding really the way the company, it's very asset heavy. right? but if you look at the multiple you look at the cash flow here, it is so easily sustainable for that debt. infect, they always have the problem what do they do with the cash pb buy back stocks, do squikss, become big are and big, they talked about last quarter about a sidekick laroue shift of the idea of sharing economy for big equipment. near the master of that. i like it. >> is this grasso's life serial. >> trade it. >> trade it. >> you like. >> he likes it. >> this is a frayed it for me as well >> you know i know you don't care about this. first of all karen was saying don't hate the player hate the game she was playing that's what the pool kwo say you mentioned life cereal this is a more you know. >> yes. >> three brothers from yonkers

new york gill crest brothers we're up, guy. >> home build he is just another group of stock soaring after getting punled last year and one trader bets it it could heat up for a name plus check out activision up 4% after hours. the llca under way, more from the c suite. more "fast money" still ahead. it's time for the ultimate sleep number event on the sleep number 360 smart bed. it senses your movement and automatically adjusts to keep you both comfortable. save 50% on the sleep number 360 limited edition smart bed. plus, 24-month financing on all smart beds. only for a limited time.

[cell phone rings] where are you? well the squirrels are back in the attic. mom? your dad won't call an exterminator... can i call you back, mom? he says it's personal this time... if you're a mom, you call at the worst time. it's what you do. if you want to save fifteen percent or more on car insurance, you switch to geico. it's what you do. where are you? it's very loud there. are you taking a zumba class?

whai tell clients, etfs can itfollow an index,re. but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence.

before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. - but yeah, i've hedged a little. i enjoy buying gold, gold has protected me. i always think and i laugh about it, 'cause when i'm sleeping, my gold is working for me. it's still making money. i feel comfortable. when i got involved with gold and it's something i could physically touch. that i could hold. and it was, no one could take it away from me. i have it, and i have it secured. - [narrator] us money reserve is the only precious metals company led by a former director of the united states mint, and as one of the largest us gold coin distributors in the country, us money reserve has proudly served hundreds of thousands of clients worldwide. there may have never been a better time to start diversifying your assets with physical gold and silver. it's easy to get started. just pick up the phone and coll toll-free to request

the complete guide to buying gold. it takes one phone call to get started. don't put it off another day. - of all my years involvement with buying gold, it's only gotten better in my faith in the company. us money reserve. that's the company i do business with and i don't see doing business with anyone else. - [narrator] don't wait until the next crisis. get started securing your financial future today. if you have bought gold in the past, or you would like to learn more about why physical gold should be an important part of your portfolio, simply call to receive the complete guide to buying gold, which will provide you important, never-seen-before facts and information you should know about making any gold, silver, or platinum purchase. - don't wait until it's too late. call to get your free copy of my new us gold report for 2019. inside you'll find the top 25 reasons i've covered on gold ownership and why you need to start owning gold today.

- with over a quarter of a million clients worldwide, we're one of the most dependable gold distributors in america. give us a call today to get started. welcome back to "fast money. shares of under armour racing higher after the company reported better than expected earnings before the bell the move adding to the more than 25% gain so far this year. nearly 32% jump off the lows of december so should investors chase the rally or has under armour gone too far too fast of course the interesting thing is it was international that really played a role in the earnings >> it was. and a congress margin 150 bps better for a company discounting its way into oblivion.

the turnover in the c suite is no longer the story. the expectations have certainly been leveled at this point i remain neutral on the stock it's in a big run. it's difficult for me to get strongly behind the move. >> yeah. karen? >> i dwree with tim. i think if you want to play the space nike is really the premier way to go at not a premier price. this is way more expensive more risk. >> i think the reverse -- -- i think the reversal was impressived to etoday in under arm are where it came from, where it finished up the positioning the overarching theme tonight. it outweighs any type of revenue warning they had when you see the stock up this much i would still abbuy are. wait until it levels off but still abbuye >> valuation -- it's had a great run obviously. and maybe it has another 50 cents to a dollar to the upside which percentagewise is significant but valuation gets in the way at some point. >> all right from a soaring retailer to a sinking one.

macies's is the worst performing s&p stock this year down 17% and one of the stocks in the red. but karen says investors could be missing something about the selloff. karen, head on over to the plasma. >> yes. >> >> as moses the said down 17% mainly due to the bottom dropped on the market comp stores sale down not much like that. however all that have said, i love this miracle down on 34th i didn't thanksgiving of that but it's good. >> the stock is priced for disaster we are look being at the cheapest the stock has been in years even though they have paid off debt by their own -- historical to the market and to itself it hasn't been this cheap since 2008 a lot has happened and yet here we are as cheap as it was at the bottom of the crisis but, to me, the thing that is most important here is this. i always think that the debt

markets are a lot smarter than the equity markets and let's look what's happened in the debt markets. they announced this bomb on january 10th and we see the the debt trade down and then it's back to where it was. it's all the way back. and since i think the debt markets are smarter than the equity markets that's really interesting to me. because now we look at the stock -- make that circle smaller if i could i can't but all right. it's hasn't bounced back at all. nothing has happened to the stock except it particulars down every day. january 26th they announce earnings they have set the bar so low that if they don't -- even if they trip on it that's okay. as long as' this don't trip and fall flat i think you make money if the stock if you really afraid of the name and you think department stores are dead you can play through options which is how i have chosen to. because it's an asymmetric risk if they put out earnings fine

okay in line with the january 10th guidance you are seeing the stock higher than here trading way cheaper than anything elks in the space they deserve a discount but the discount is too much even with the bad news i think disastrous news is already providesed in. >> a couple of things inkt karen is bucking for her maiden appearance on oa a great show on this friday. i'm not looking to tee you up peej talk about the hardly square location. that undervalue foslid i talk about the stock as cheapest at 3.15% of book. and that's included in the real estate but i don't think ner monetizing they are selling i want to back that out of the earnings because that's a one-time thing i'm not relying on real estate but there is a put in there for real estate. >> karen, i tend to agree with you both on the debt side. because this was a major catalyst about a year ago took

the stock -- after preholiday 2017 but do you see that the balance sheet has the ability to buy back a little bit of debt? because that was a major catalyst for the stock and gives the sense the 6% dividend yield is alive and well. because the valuation is cheap and people are quick to point out they lose part of the div and worried about the debt which i point out is a good thing. >> thanks more bringing up the dividend that's a crazy high dividend i think nef the cash flow to do it it's trading at debt to -- to ebidta less than two times i think they have rom. probably great for them to buy back debt actually instead of dividends but i think they can do both. >> thank for the fine print, karen. coming up home builders upon a hot streak one trader bets this could stee a rally in the next few weeks and find out the name and what has him bull shall let's check on the cramer cam and jim is giving his take on

the next big rally much more "fast money" still ahead.

have you ever worked with dr. francis? oh yeah, he's ok. just ok? guess who just got reinstated! well, not officially. nervous? yeah. yeah me too. don't worry about it, we'll figure it out. i'll see ya in there! just ok is not ok. especially when it comes to your network. at&t is america's best wireless network, according to america's biggest test. now with 5g e. more for your thing. that's our thing.

[ ding ] show me just add magic. hey toothless. [ ding ] [ gurgling ] [ ding ] show me cartoons on netflix. [ ding ] [ cooing ] [ door closes ] [ cooing ] ♪ [ ding ] show me fish on youtube. say it and see it with the x1voice remote. from netflix, prime video,youtube and even movie tickets. just say get "dragon tickets". welcome back to "fast money. check out the home nlders op fire this year up nearly 20% but one trader says one home nld

are has more room to run let's go to make khouw in san francisco. >> we are looking at dr horton dhy today trading well over two times the average daily options volume calls outpaced puts by 7 to 1 and a notable trade i saw was the purchase of the august 41 calls somebody paid $3.44 aet for 2000 of those. for those to break even the stock has to be above that 41 strike price by the premium they paid that would be an increase of over 10% but i think we can assume that someone who is buyingthe calls isn't hoping only tobreak even but actually make money. so i would actually assume any are targeting highs from last april getting us to over $46 personally, i think dr horton looks reasonably cheap here at 10 times earnings that's the number they are targeting. >> let's go to grasso. >> isi, the dr horton specifically, is cheap the price to book it's more expensive than lennar i'm long

lennar but a couple of things went on today. isi inflection point in the home builders space you had the avoidance of the government shutdown that's positive for home builders i would say i'm positive krs the space. lennar specifically. >> yeah. >> the the home build esper look remarkably like banks. topped out early in 2018 lower lows lower highs dr horton is one of those. i think you're still in a well defined downtrend. toll brothers as well. if you look for a break out buy it above 42.5 otherwise you are up against it ear at 40ish dollars. >> to you completely different views. >> well, i mean my view is that i think people wrongly assume that is a fed play but yet they're a fed play and if you actually believe that the fed is totally out of the picture i think you have a little rom now in a world where we actually have the fed out of the picture and again so the interest rates stay sideways, home builders didn't do much either i think people need to see these guys

grow and there are structural issues in the housing mechanic that are difficult right now i don't see getting better so help from the fed is a short covering rally but leave it alone. >> but the fetid is on the sidelines because they are -- they're outlook for growth is dim pen that's not necessarily god. i get the job market is strong. >> it's a rates call. >> but it's sort of like. >> i agree. >> one or the other here. >> i'm surprised they weren't higher going into the year actually, right. i think there is a lot -- i understand what you say there are headwinds hard to find labor. finding some commodity headwinds as well. but with the labor market as restraining as it is, right and rates here, you would think. >> i think the whole space is chief. i like home depot and lowes as a ditch way to play it also the consumer soo i'd trade it. >> it, if we played the game but we're not in the game. just. >> i would trade it every available time. >> crafty. >> thank you, mike mike khouw in san francisco. more "options action" check out the full show friday 5:30

eastern time up next, final trades. see >> announcer: "options action" is sponsored by think or swim by td ameritrade. eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade so, the whole world is talking about ai. big, bold promises like... it'll find life on mars! but here's the thing. you don't live on mars. (beep) you build wind turbines. supply car parts to thousands of cities. answer millions of customer calls a year. like this one: no, i didn't order this. it's terrifying. and that's why you work with watson.

hello. it knows your industry, protects your insights, and works with tools you already use. that's why it's the best ai for the job.

. >> how did tim get out of the box? >> time for final trade tim seymour. >> just to reaffirm my trade to call earlier with mattel letting kirn know um not in it because it's done okay i want to stay in because they turned around product releases look good. and i actually think you have a dynamic here where some of the licensing business for barbie is hot again. go barbie. >> all right karen. >> yes, so it was good enough for the other final fine print macy's i like the calls going into earnings february 26th. you need march calls to get that i think the risk reward compelling if they come close to meeting what they laid out i think the stock is significant downside if you buy the options you know exactly -- it significant upside and if you buy the options you no he what you have to risk to the downside. >> grasso. >>s in a long time in the coming home builders, 2019 i think is their year

lennar i'm sticking with that horse. lennar. >> guy. >> back to last spring sister and look where take two bottomed out where it's at today. take 2 interactive. >> we'll see you back here tomorrow a my mission is simple, to make you money i am here to level the playing field for all investors. there is always a bull marke somewhere. and i promise to help you find it "mad money" starts now ♪ >> hey, i am cramer! welcome to "mad money. welcome to to my america i a just trying to make you moneys my job to entertain and teac you so call me at 1(800)743 c.b. c or treat tweet me at jim cramer what happened to the lon awaited rollover a few days ago this market was