 Alright, good Wednesday morning everyone. We are on the floor of the New York Stock Exchange with Jim Kramer to talk about the markets. Alright Jim, let's begin with the Federal Reserve. Jeffrey Gunlack endorsing Niel Koshkari. Look, Gunlack is an outlier. I happen to like him very much. He's done some high quality bomb work. I'm not as crazy about his stock work. He knows that. Certainly no ad hominem attack on him. But I would say that Koshkari is not as good a bet as Warsh. You know where my friend Jay Powell, Doug Castle with a very good piece today about talking about who is likely to get in. He's talking about Warsh. I had one at Gary Cohn because I don't want the Fed to bleed off its bonds. I want him to sell its bonds. Because I have always regarded that one of the big dangers in this system is the Fed's large bond holding. I want it to be gotten off the balance sheet. I'm very conservative about debt. The Fed has too much of it. Alright, let's move on to Pepsi, the beverage company saying that the declines in the beverage business are temporary not structural. Right now the stock is reacting initially to the idea that yes they made mistakes. One of the things I love about PepsiCo is that they say in the first paragraph they made mistakes and they're going to course correct. Betting against it is renewing. If your stock's been down 11, 12 points has been not right. She's the CEO. Remember 50 times of her cash compensations in stocks. So she's clearly working for value creation. This is the only stock in that whole consumer sector that we own for action alerts. And we told club members last week beware this was going to happen. We're selling. If the stock gets down to 105, 103, 102 we'll issue another bullet. And we have by the way a very important bulletin coming out about waste management that I really want everyone to read. But we were on this for PepsiCo for club members and it's the kind of value that you get if you are a member of the club. It is the kind of value. And Jim yesterday you said PepsiCo is the sort of best house in a bad neighborhood. You said people should trim it and you got a really good price yesterday and I gave that to club members first because that's what ActionAlertsPlus.com club is about. It is. All right Jim, Netflix's price target was raised by UBS. This again is a survey about what's going on with Netflix. The original program is resonating around the world including particularly Narcos 3. I'm pretty close to Netflix. I believe in a lot of these stories that are coming out. My favorite kinds of companies that have these streams are Amazon, Netflix and Spotify. And Ted Strando is telling Andrew or Sorkin yesterday that Netflix could spend $7 billion on content next year. Right. You said that last time and I think it's absolutely a possibility. And remember they say that the sign of success is an enormous negative cash flow. To some degree people felt that read on that conference call was given to hyperbole. I like read so much you know what I've had to think you know what to some degree maybe is right. And Ford looking to cut $14 billion in cost. They've been cutting costs now forever and where's it got to stock? GM is ahead. Tesla, you need to ask me this about Tesla because I'm now going to give you the story. Tesla there's a research note out this morning from the Mura Instanet saying $500 target they're well ahead of everybody and that would include GM. I say it's not a zero. Some game GM still has a very low valuation. The airlines, the autos have the lowest valuation. I don't want to buy Ford. I want to buy GM. And I Tesla's a cold stock. I'm never saying anybody should buy it or sell it. And in that Tesla note it said that the buyers are economically irrational. Yeah I thought that was funny. I mean it's true. My daughter just said dad I need a Tesla and she ended up buying a more expensive car and Candidly used her own money which I took down some debt. She was very hard working. She had a job. And I was very encouraged by that. Well congrats to her. That's great. Meanwhile a myelin receiving approval for that MS treatment. So this $3.5 billion drug compact so it's one of the most amazing drugs. It is the drug that everyone presumed Teva would lose exclusivity to. So this Teva had gone down well in advance of that. So it's not like that Teva's stock didn't forecast this. However, those who want to speculate on Teva remember that Allergan owns 10 percent. Allergan is an action lawyer's plus.com name. A disappointing one. I talk about the good ones. Talk about the bad ones. It's been a disappointing one but they do own 10 percent of Teva as part of a transaction. It was so brilliant where Teva bought their generics. Teva's a myelin. This is worth probably 40 bucks. You can go up to 40 on myelin. Teva, if you could buy some because everybody knows it after tomorrow when the downgrades will occur for the remaining analysts and then you wait to see what Brent Saunders does with Allergan and his 10 percent stake. Well and as you're writing real money some of these analysts know it's I mean these the levels they're giving may not exactly act up in the weeks following it. What if it sells? Yeah, basically that they'll give a sell rating and the stock creeps back higher a few weeks later. Well I mean typically what happens is on day three of a new quarter people say wait a second, you know at 3M that was downgraded by a very good analyst he too said JP Morgan stocks up quick six. Maybe that should go yet. A good example of that would be United Technologies. The stock fell to 109 with the Rockwell Collins. He pushed it very hard here saying I thought it should go right back up. It's right back up. Do you reevaluate that? Do you reevaluate J&J which is coming back after Jamie Rubin hit it so hard? I would point out and say look stick with the fundamentals. I think 3M is going to have a good quarter. I think J&J is going to be fine. I think United Technologies probably a couple of points to head. Don't forget too high. Remember Honeywell is going to be doing a strategic review. Honeywell is more favored but if Honeywell does not spin off the aerospace there'll be people who are disappointed. Honeywell could come down. So just be aware that some of the big cap stocks that are screaming are in, I don't want to use the word precarious but our levels where typically people have said you know what maybe I ought to take some off the table. Again the oils if we get an oil number 1030 which indicates a build in the inventories I think people take profits in that group too. Jim what did you make of Shopify's link up with Instagram? No Shopify is a piece put out by Andrew Laugh about why it's worth going to probably go to 60 and that Andrew Laugh if you go to at citron on Twitter you can see a seven minute video about why he says that Shopify is a multi-level medium potential fraud that will be investigated. I have felt that Shopify stock we compared it to Etsy on Mad Money and we thought it was too high but it was not for these revelations that I think that Laugh has brought to light. The stock is up a great deal so I think people should go to Twitter at Citron and then if you can get his report later in the day I'm sure it's going to be talked about it seems like a very rigorous report. Remember Laugh wrong on Camture, right on Valiant, early on Wayfair, Voxeljet, correct on it but most importantly provocative, honest and tough. Alright Jim let's end with earnings to watch we have Costco reporting on Thursday. Well Costco is historically after they report a fantastic number then going down and that a lot of this because of Amazon and I think that Amazon Whole Foods the tie-up hasn't been impacted yet. If Costco addresses it which they traditionally have not then I think maybe it's clear sailing but Costco has moved up a great deal. Home Depot moved up a great deal. Again those are positions that in a more logical extension of my real money piece today you could definitely say well wait a second Costco which is a great company and should go higher maybe profit taking will ensue not unlike Home Depot there could be profit taking. Now let me go on a couple of discreet issues. Puerto Rico municipal bonds there's geos and there's revenues. President's comments seem to indicate that they're going to wipe this out Goldman has nothing to do with it by the way not just saying because I'm alumnus of Goldman the revenue bonds I do think could be wiped out but that has been well into those bonds. I bought some I have a municipal bond before I came on stocks I have some Puerto Rican geos I you know at 30 I don't trade and at 30 maybe they're a buy maybe not I don't like the Puerto Rican situation now you have the president against it which is makes a pretty severe situation not one that I necessarily want to get involved in a couple other things to be thinking about David brought up a very good report a report about craft times what can they do and whether that stock is going to go lower Goldman Sachs I have to agree the with PepsiCo I like PepsiCo in that group I like constellation brands ahead of their quarter that stock sometimes sells off after a good quarter might be a good opportunity to buy it after it sells off I do think that there was a downgrade of Accenture that I saw I want to take the other side of that once again on action alerts club members please check your bulletins this morning we're going to be issuing a few of them I see technology stocks going down that's more of the typical thing that I talked about in the real money piece people didn't like Intel at 35 they suddenly like it at 40 the larger thesis in the real money piece is about how index funds buy ETF funds buy hedge funds sell unless it's a definitive story about an actual weakness talk about the Shopify piece again good at Citron and I'm not working for him as I pointed out once again I make that that's a severe charge for those who are going to make it I did I did a piece about why I thought he was early or perhaps wrong on Wayfair I did not like his Kimors not come true I'm sorry I did not like his Kimors piece because of the spin-off was done at a very good valuation I did like his valiant everybody can be wrong but the work on Shopify is if you click on the links seems rigorous to me so everybody can be wrong I can be wrong left can be wrong but I do always want to point out to you why stocks are moving there are important lessons and Jim before we end you have Bill Ackman on tonight yes and Bill this is about automatic data and what can be done with automatic data he says I might speak in a question about Herbalife might speak in a question about Spotify it might speak in a question about Chipotle if I have it I know Bill really wants to address the issues in automatic data and of course that's what we're going to do automatic data has been a stock that I've liked but Paychex has been the one that I've liked the most City came out yesterday this morning and reiterated its sell on the stock of City I reiterate my buy in the face of City's so far I don't want on Paychex so far I'm right and he's wrong but remember what I said about Andrew left could Shopify be far more legitimate than left says absolutely but I think what matters Shopify is an expensive stock we said we like we preferred Etsy to Shopify so I think you should be as informed as possible a lot of these videos what we do in Action Alerts is to inform you as an investor and you need to know it's all good advice Jim Kramer we appreciate it thank you so much for more information on the stocks in Jim's portfolio please head to ActionAlertsPlus.com