tv Fast Money CNBC February 10, 2016 5:00pm-6:01pm EST
gain. a lot more to explore on that call as well. guys, thank you so much this afternoon. that does it for us on another earnings-heavy ebb "closing bell" on a day when by the way at the end of the day the market just took a slide lower. dow closed down almost 100 points. "fast money" begins right now. live from the new york market site overlook new york city's times squares i'm melissa lee. traders on the desk are peter najarian, steve grasso, karen finerman and guy adami. coming up, earnings palooza, twitter, cisco, whole foods and stocks are moving in the after-hours session. live team coverage. the headlines and instant reaction. also with us for the entire hour sun trust's bob peck with a buy rating on twitter. listening into the call right now manage the red phone. could he be on the verge of changing his tune? we'll check in with him shortly hand highly respected strategist says things have gotten so bad they are actually good and he'll tell us why he thinks stocks could rally 10% from here.
later, it's a secret sign that energy may have found a floor and had one trader placing a very big bet. we'll tell what you that is and we'll start off with the big moves in tech. cisco surging and tesla misses but the stock is soaring on an upbeat outlook and amazon announcing a $5 billion buyback. do these then to buy back the standout performance we saw in today's session in technology? is it time more importantly to put the tech trade back on? >> guy. >> when you talk about the tech trade, that's a pretty wide swath but in terms of cisco specifically it might be time to take a serious look at cisco. you don't have the revenue growth you need to v.probably up 2.5%, 3% and you're talking about a company that's traded seven times forward earnings, great balance sheet as shown by an acquisition added to a buyback. started to make a transition are, and pete can speak to the transition microsoft did. at least they are attempting to move away from legacy businesses into businesses to make more
sense for them, specifically cloud. i don't know if it raises all tech, but i think sysco's got a little bit of room on the upside here. karen? >> i agree. cisco is the most important of the three but for the fang stocks something like tesla is helpful. amazon the $2 billion buyback, $2 billion, a 2% buyback, i don't know over how long. i don't know. that doesn't really count for me for much at all. >> right. >> they have been -- the whole space i do think we'll see a nice bounceback. >> the context though is that in today's session we had yellin testifying. there's every reason to sort of be on sidelines but we did see a bit under technology. specifically more of the quote, unquote risky areas for a biotech area. is this good news in the after-hours. >> the point is with cisco, look at their legacy business and look at where they want to get, to i think they will be battling. i don't know what the margins will look like. i don't know what they should look like. heard warnings from oracle about licensing and fees and legacy business was much better on the
march gin front than the new business or cloud or xh commoditized business. i would not be a buyer of cisco. >> why you might want to have interest in there is they are returning money to share holders in a huge way. obviously they obviously had the buybacks in and add 15 billion to that and jump the dividend from 21 stones 26 cents a quarter. they are using the balance sheet and look at where they are doing this, by the way 5, 2-week lows. this is just an after-hours market. can we see the volume actually pick up enough that this is going to be meaningful tomorrow? probably not just yet, but these numbers tonight i think shows the transition is in place. i think -- >> i'm only interrupting you because i'm going to forget what i'm going to say so if i go back on a long-term chart on cisco you're making a series of lower highs and can you go back as far back acts last crisis that we h.you're still battling with levels that they cannot break through. >> right, but fundamentally, i'm
talking about the fundamentals right now. forget that side of it for a moment. >> it's because of the margins. >> margins coming down. >> right. >> look at the transition of where they are going, to data centers one of them, security another. that's where they will pick up but the core business you're right. that's a struggle. >> more broadly though. >> karen made a good point about the amazon buy back. people are getting guilty in the after-hours session. do you think this amounts to much? >> the amazon buyback. i'm with karen, not a big deal. i thought the day was really interesting. obviously the fang stocks we all like to talk about all had a decent day. first time you've seen that in a while. i think facebook should rally for a lot of different reasons, not least of which they are running a business really well. google bounced off a completely sold position in my opinion and amazon probably similar. what's interesting about the day is we talked about it here yesterday. we said the market was setting up for a move to 1880 in the s&p. steve went to the smart board and look at the high. spot on at 1880. gave it all back. tomorrow could rally again but
the bond market continues to show strength and pete tells you the ovx is the significantly above. that does not auger well. >> when you look at the direction of oil and look at the ovx, 75 is where it went, to got down and actually closed closer to 72. volatility has not been able to break. volatility got all the way down about a week or so ago. 1970 and broke right there and stopped right at 509-day moving average. when you look at volatility in the overall market the volatility level remains extreme and because of that that's why we see the crazy moves at the end of the day. fang stocks actually traded pretty well. by the way, the $5 billion buyback that's reasonably significant when you're looking at amazon so can you understand some of the reaction in the post market. facebook, the numbers were incredible. stock ran all the way up to the highs that it did. the pullback, i thought we might get all the way down to the 200-day moving average. we didn't. nice pop today. still looking at 94 and facebook. >> these are very tough markets
and very easy markets because have you to look at a couple of things. have to look at china and oil and european banks, and until those things add up to maybe stabilization, you cannot buy facebook, amazon, google, anything. you can't buy anything as a marketplace. oil had extremely bullish inventory levels. look what happened on a daily chart in oil. extremely bearish activity. it looks like it's going to the teens. can you not buy the overall market because there's no growth. >> all right. our next guest south with a very bold call. he says stocks could rally another 10% from here so what it is that the bulls are missing. let's welcome ed yardeni. 10% sounds great from here but you're down 10% but you're basically calling for a flat year. >> basically a flat year. i mean, you made it sound like i was all excited about the market for this year, but actually i think we'll have another year like last year, very difficult, very choppy year, and i think once again central banks are going to be the key here, and i think to a large extent
investors are kind of giving up on central banks having any ammo and maybe even running out of fairy dust, and today's commentary by janet yellen made it very clear that the fed is not just data dependant but also market dependant and they are not going to be able to raise interest rates if the markets stay this turbulent. and so they got themselves into a real trap here because if they start talking about the economy is doing pretty well and the markets rallied a little bit and they start talking about raising rates again they will get another tightening tantrum. >> in this scenario where the markets will be up 10% from year, what areas will outperform within the senate, what areas will underperform? >> that 10% number is really an objective by year end. >> sure. >> and all kinds of things can happen between now and then and hopefully we'll get to that kind of target, but my vest strategy really throughout the bull market has been focused on a stay-at-home strategy as opposed to going global.
thought the global economy has hey lost risks and it's gotten worse, not better and stay home means literally staying in home-related stocks. some of them are doing reasonably well. health care has done pretty poorly but i think this is a good opportunity to buy health care because once the elections are over they won't be under attack by the politicians, and i think consume remembers in great shame with gasoline likely to get down to 1.50. employment continues to grow and consumelers have discretionary income to spend on entertainment and leisure and stuff like that. >> you mentioned central banks. you saw bank of japan, german ten-year yields down around a quarter percent, whatever it is. let me ask you a question. missteps by central bankers. does that throw a monkey wrench into this? >> to have the global economy
survive and grow at a muddling pace and some stock markets doing better, particularly in the u.s., if central banks are run out of ammo? clearly we're all coming to the conclusion that negative interest rates don't work and i think that clearly raises that kind of concern. this bull market has been clearly led by the central banks. i think it's going to be a stock pick's market as opposed to a market that's driven by the central banks, and for those of us who are investors we might actually look forward to that. >> ed, thanks so much for phoning in. >> thank you. >> ed yardnni of yardeni research. do you agree with ed? >> he just said health care, i'm not sure if he's referring to the biotech companies, hospitals, what he's actually discussing there. i tend to lean on a lot of different names because i think -- you know, when we got through earnings, we heard pretty good earnings from a lot of big pharma companies, those specifically and they sold off. we even got great earnings about the biogens, ceilingi icelgenes
world and to the upset -- >> when you saline on, you say long or you're leaning on them? >> i'm long these names, just about every name i mentioned. >> up next the ceo of sales force and a wearable tech stock and the name and what has them getting back in. the european banks doing something they haven't done in a very long time, they are surging. what's behind the rally and is it the worst is over and cisco, twitter, whole foods, tesla, big earnings, big earnings and moves in the after hours session and instant reaction on all the after-ho after-hours action. more after this.
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around in some of the stocks, fuzzing around around the edges as well. >> that they are buying the stocks. >> unconfirmed speculation they could buy bank stocks. >> all right. >> that was the one thing and then they start to expand qe we don't know what that really means but all this stuff is bullish around the edges. they have to stabilize in order for you to buy the united states banksing a well though. >> i'm just curious, karen, the reports that deutsche bank would use some of its cash to buy senior debt. does that put a floor under the stock at all. >> i don't know. >> i mean, it's probably a great return for them, since the debt will eventually mature. >> when you talk about the ecb buying equities, that to me is a bad sign if they actually have to step in and do that. when that happened effectively over here. that pretty bad. much rather see deutsche bank getting them buy back their own securities. >> buying it. >> and you see these banks. like i said before. you need to see deutsche bank stabilize before you see other
european banks stabilize before you buy u.s. banks the same way you see caps stabilize and china and there's a whole lot of things on your check list before you ent near u.s. equities. >> in terms of deutsche bank the stock didn't reach the friday low on the big spike up. >> yeah. >> gives you an example of how beaten down this name is and some of the names in the sector. talking about it last week. been a lot of activity of people playing for the downside. some of e moves they are making could stabilize the bonds. does that mean that stabilizes the stock itself? >> probably not. >> next up, hess saw nice gains after goldman sachs upgraded the buy from a neutral adding it to its conviction buy list adding, quote, the hopes and dreams story of 2016 saying hess offers the most development opportunities. they see 52% upside for the stock. hess that's lowered by more than
45% on the year. guy? >> hess loses money on the eps side this year, next year so it's an expensive stock number one. february 5th they priced a $25 million share secondary through a number of firms. goldman sachs being one of them at $39. five days later goldman raise an upgrade to stock and puts it under the conviction. >> and hopes and dreams. >> i don't know what to tell you, folks, and i'm not saying there's any improprietary here. just doesn't pass my any of test. yes, it rallied today and there's better placed to be. hopes and dream, all about it. hoping and dreaming every day, but i think you're reaching here. >> i feel like this is a drop mike moment. done. >> for me. >> goldman sachs and hess. next up, ceo sales for mark bannoff taking a 5.3% stake in fitbit sending the stock higher 5% one day after making a new
post-ipo low. b is this a good sign? >> it's a sign but i don't know how good. a lockup of a huge amount of shares and look at the short interest of the stocks. absolutely incredible. this stock, i think the biggest problem i see right now is even though they do control themselves in the wearable industry and they look so good they still have enough competition out there and how long can they hold off the apples of the world, samsungs of the world and the rest. folks that are all trying to get into wearables. don't a great job so far, but are they able to continue this defensive manner? i'm not so sure and i don't know if you want to chase the stocks. >> i'm not sure if you're aware benioff is an active buyer. you see mark cuban buying things. this was sort of interesting to me and you wonder if there's chatter around the neighborhood. when is the lockup, i'm curious. i don't know. >> today. >> it's today. >> 157 million shares or something like that.
that's part of the -- how much those folks are going to cash in. >> to your goldman sachs point though, i've seen a number of companies that as the lockup is approaching, they sort of leak out, whatever good news they possibly can to be able to release the locked up shares and the highies price possible. maybe he was sort of -- >> a bunch of conspiracy theorists tonight, aren't we? >> we're doing another show after this. >> it's not a conspiracy. >> peter najarian, twim. can we get a look at that. >> he trimmed up that goat. he looks good. handsome man. >> looks good. >> as we head to break. it's not just twitter and tesla dominating the headlines tonight. take a look at cisco and whole foods both moving lower in the after-hours session. we've got all the headlines and instant reaction. i'm melissa lee. you're watching f-fun first on cnbc, first in business worldwide. meantime here's what's coming up on "fast." >> tonight on "fast" which one
of these two men do you think could save their stock first in the answer could come as the earnings call unfold. we'll bring you the lateest. >> plus. >> open norman. >> it's the secret sign that energy may have found a floor. we'll tell you what it is and why it has traders so excited when "fast money" returns.
welcome back to "fast money." an earnings alert on cisco hovering near the after-hours live. josh limitson live in san francisco with the latest from the conference call. josh? >> reporter: well, melissa, of course, cisco is a true tech bellwether and investors pay very close attention to what ceo chuck robbins has to say about the macro and economic climate out there. take a listen to what he told analysts. >> we've experienced one of the most volatile times in the global markets. this volatility led to a slowdown in spend aing impacting our business, especially during the last few weeks of january as we closed our quarter. despite this slowdown we executed very well. >> reporter: so throughout the call robbins really emphasizing the climate remained soft and challenging, cisco saw customers, in his words, pause a
bit in the last three weeks of the quarter and you heard him talk about the execution and strategy depends in part. you see the new partnerships cisco has developed with everyone from apple to air-in and aggressive m & a and recent billion dollar acquisition of jasper but the news here that surprised investors, of course, boosting the dividend, $15 billion of the increase of the stock buyback program and sent the showers up after hours and the capital return program will have no effect on that m & a strategy. >> is there any elaboration on where in the world or what businesses specifically felt that downtick in business and spent the last three weeks of the quarter? >> it sounded pretty broad-based, a lot of curiosity, of course, about china. remember, it's a couple quarters okay you saw orders pop 40%. you still saw robbins sound pretty positive. he called it well balanced and said switching it around,
growing double digits and as he's done throughout the call with respect to china. clearly said a lot of certainty there, melissa, but cisco is taking things, he says in, his words a quarter at a time. back to you. >> thank you, josh lipton. let's trade this because at one point in time we used to see juniper was taking cisco's lunch and now it looks like the roles have reversed. >> probably still true. one of the reasons cisco has to move away. pete talked about microsoft before microsoft got its mojo back and i'm not suggesting that cisco is microsoft. what i am saying it was stuck in the mud for years in terms. stock until they re-jiggered their business. cisco seems to be in the midst of doing that. revenue growth is patry. i get it, but i think it's enough to see the stock trade up another 8.5%, 9%, up 26 bucks. everything helps at this point. >> i feel like you're interested. >> i am, i am. >> more financial engineering to come and when you talk about the
amazon buyback, a much bigger buyback, very accretive and if i look at the historical pe, cisco to itself, nearly near the bottom of where it trades. the dividend is nice as well. it's actually i think sort of compelling. i know on a chart basis it -- it may be -- >> you have some room so to guy's point. i think you have room all the way up. resistance is 30 and it's wide open to be a tradeable stock. 4.6% yield and that's what we do see money coming into the market. those are the attractive things, stocks that actually yield like bonds or really premium bonds, but i don't think longer term you should be investing in cisco because i do believe it's declining revenue type. >> how about the idea that they are moving and shifting like you're using of the microsoft example and that really does fit. chuck robb bins stepping in for an historic figure and he's stepping into cisco. has a real problem here. has an old business that's dying
off and yet he's able to at least maintain the revenues as they are going through this transition. i think that's pretty present and navigating in a really difficult environment. we all, every single night we sit around and talk about china and the slowdown there and talk about europe and all the concerns there, and this company managed to actually increase their revenue year over year. i thought that was -- >> the stock was depressed. down 17% right out of the gates this year for a reason. juniper was down 21%. >> in this market environment, grasso, in an environment where people are paying premiums, utilities and telecomes and utilities more so, consumer stable stocks, could you see that this could be quote, unquote more defensive within the tech sector than others and people are looking for other places to put their money. >> i think consensus was uniformly negative, so uniformly negative across the board and it's the actual mirror image. up 7% year to date so this space and sector was so depressed it
was right for a pot. got a little bit better news coming out of the print. let's see what it looks like three days from now. >> tune into a first on cnbc interview. chuck robb bins tomorrow at 9:30 am on "exon the street. the twitter conference call halfway through. the stock was down more than 13% in the after hours session. right now it's down by about 1.2%. we'll bring you the comments from ceo jack dorsey that sent shares moving and behind the $4 million bet that we're on the verge of a massive rally in the energy space. we'll tell you what has traders so excited. much more "fast money" right after this. this bale of hay cannot be controlled. when a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. thankfully, mary miller banks with chase for business. and with greater financial clarity and a relationship built for the unexpected,
the latest from elon musk. we start off with julia boorstin and twitter in los angeles. what was behind the big turnaround. >> >> jack dorsey kicked off what was supposed to be a y & a session by investors by addressing concerns about the company's shrinking user base and stressed so far in january the company has returned to the level of users it saw in q-3. that helped the stock make up some of its losses. >> monthly active usage in january has bounced back to q3 levels. we're confident that with disciplined execution this growth trend and active usage will continue over time. >> cfo saying moments ago on the call they are seeing improvement from a combination of new users and what they are calling resurrected users as well as improvement in retention of existing users. jack dorsey also talking about how they are working to grow their numbers with a focus on not just being at the second screen but the first screen for live news and entertainment and also by improving the service.
>> we think there's a lot of opportunity in our product to fix some broken windows and confusing aspects of our service, that we know are inhibiting growth and timeline is a big focus. >> daily active users have actually been flat since q3 around the trend is positive while the ad load has been increasing in overseas markets in particular. we'll be able to ask the c.o.o. adam bain directly tomorrow morning on "squawk on the street." >> that conference call looked bizarre. >> looks like they are broadcasting from the moon. >> or are at a bar. >> for more on twitter let's bring in sun trust's bob peck, a buy rating on the stock. bob, is it true, flat when it comes to monthly active users is the new up? >> low expectations going n.quarter in line, guidance fine. the most important thing was
laying out the vision and strategy because right now wall street doesn't believe. did a good job of going through product and recruiting and new ad units. talk about 3x returns and embracing the developer community and the new cat lifts coming up. logged out users to google, vine, tap and now it's all about execution though and you'll see the markets sit back so they can execute again and seize ideas. if they don't execute the question of m & a will come up after that. >> do they see anything for the high level departures next month? >> they have the right team in place and are also looking to hire for more. still settle down a little bit and still in flux. >> we'll check with you a little bit. now we're down by just less than 1%. pete, what do you make of this? >> pretty amazing actually because when you look through the numbers they didn't impress and that was the reaction that was initially the knee jerk and everybody moved to the downside and the one thing i would be concerned about in terms of twitter is engagement.
the monthly active users, all focusing on that? is it the timeline and what's going to cause the engagement process to increase so that they can actually get themselves positioned better in terms of theed a growth to be more competitive with the facebooks of the world. totally different company and they have to find themselves in the social media world. that's what they are fighting for and they have to fight for the dollars as well. >> does this feel like a real turnaround or short covering in. >> doesn't follow like a real turnaround. still dorsey needs to do a lot more. and i said it on air. it's very easy to fix what i think instagram is the money-maker there, so all you have to do is when i follow melissa lee, all i want to do if i want to see your pictures, i just click your pictures and all i see is your pictures. >> sounds weird. >> and now i take on instagram. if you click on top only videos, then it's now youtube. there's a lot of things they
need to fix and the reason i say this, not to be redunn lant, but it's easy and the fact is nothing is getting done. they are doing esoteric fixes and the stock continues to slide. >> and since jack dorsey was named permanent ceo the stock was down by more than 50%. >> i don't think they should -- bob peck will probably agree with this. i don't think they should ever talk about average monthly use. >> it's ought of the bag, it's done. if they said we're in the going to talk about monthly active use the street would freak. >> this is what they should do. they should say beginning next quarter or sometime in the future. >> and the stock would sell off sharply. >> it will sell off less than saying starting next month, you know what, not doing it. >> to me they are a news service. you can be a voyeur and get your news. you don't have to be an active participant. what do you know. i can grow a beard and run that place. i'd do really well out there. >> i'm full. >> seems that's what it is. >> twitter shares down 5%. news alert on bill ackman.
seema mody has that news. >> pershing square losses accelerate and this follows a 20.5% decline in 2015 so certainly a tough time for bill ackman and his hedge fund and their second biggest holding is valiant pharmaceuticals, and that stock is down about 15% this year. >> seema, thank you. >> again, you heard it right, down 19% this year. >> coming off a terrible last year. >> exactly, exactly. >> that's getting to be a pretty big cumulative hole to dig out of. >> yeah. >> i've got to say. everyone i know, and i don't know bill that well, no one that i know let's bad news run, you know, like water off a duck's back. doesn't bother him. >> and he keeps going, and eventually, you know, he seems to find his way out again and
again and again. >> the bigger question is how many other funds are going through the same problem. >> many. >> and there's a lot more funds which means a lot more pressure because a lot of guys can't survive as long as he's surviving. >> there's going to be a lot of funds. this could be a record year of funds going out of business, and what's that going to do to the market and what are they going to have to sell? >> one thing that's interesting that came out a lot at the end of last year. what kind of lockups do people have. pershing has one that takes out a quarter over two years but it buys him down. down 20 and then down 14 you've got to be up. >> performance is taking it out for him. don't even need the lockup. think about it. >> the flip side to letting bad news roll off your back is bad news in a stock may roll off your back and you may not embrace the idea that it could be time to cult your losses. >> well, that may be, and it's hard to cut your losses when you're a huge filer, very hard to do because the street knows right away when you do 1%. i did wonder why the herbal life
thing came out now. what was the timing of that for? >> right. >> i don't know. >> that was curious. >> still ahead. tesla shares moving higher in the after hours session. we'll hear from ceo elon musk about what drove the quarter after this break and one part of the energy market has been crushed and trade remembers betting on a major rebound. all the details later. much more "fast money" still ahead.
welcome back to "fast money." tesla hours are soaring after hours. cnbc's phil lebeau is monitoring the call and it's really about the outlook, isn't it? >> it is, melissa and elon musk has just started talking about the conference call summarizing the fourth quarter and let's talk about the fourth quarter and then we'll talk about the rest of 2016 which is the reason why the stock is moving higher after hours. it was a big miss. a logs of 87 cents a share compared to the street estimate of a profit of 10 cents a share. revenue slightly below expectations at 1.75 billion. the street was expecting 7.9 billion so here's the expe expectations for 2016 and the reason that investors are pushing tesla shares considerably higher after hours. higher cash balance. in fact, just a few minutes ago elon musk was talking about the fact they expect to be cash flow
positive on a non-gap basis by the end of this year. gross margins for the model s and "x" to be 25% and 30% by the end of the year. q1 deliveries coming in at about 16,000 vehicles d.have to stop production on the model "x" to work on some what you would call challenges in terms of mechanically making sure everything was set with the vehicle. they did have to stop production in january and restarted production and when you look at 2016 this is what people are focusing on, the guidance for full year deliveries, most people were thinking 70,000, 75,000, that would be generally a good year. they are guiding people to expect between 80,000 and 90,000 vehicles to be delivered this year and one other note about the expectations for this year, as you take a look at shares of tesla. march 31st, circle it on your calendar because that's what tesla will be unveiling its mass market model three electric
vehicle. interesting bhoo-to-see the reaction when we show the vehicle and they will charge $35,000 for the model three before federal incentives which could bring it below $30,000. they believe that's the sweet spot of the market. let's hear elon musk talk about the model three. >> we're looking forward to the unveiling of the model three at the end of next month. it will be really well received and getting to production and delivery at the end of next year. >> they believe production will begin in 2017 on the model three and deliveries can begin before the start of 2018. remember, melissa, just last week adam joan as said i'm not entirely sure we will see the model 3 until 2018. that's some of the chatter that pushed it out lower and tesla saying we'll told that 2017 delivery date on the model three. >> also said that it would sell
for considerably higher than the expected 35,000 price tag, but, again, they are sticking by that. >> that's the initial once. >> those are the initial ones. >> i see. >> they will bring it down. >> just as they have done with the model "x." the initial signature version of the model "x," goes for 110,000, 120,000 and then the price comes down. >> jump back down on that call. phil lebeau in chick. let's bring in senior research analyst ben kallo. how does this feel to you, is it short covering or a change in sentiment about tesla's stock? >> thanks for having me on. i think it's short covering at this point. i mean, i think that the worst case scenario people thought they would lower their guidance. they did reitiate that they had given this range before. i think people are looking at the demand commentary for the "s" and the "x" and are positive on that. the cash flow positive commentary is interesting because if you look at the
cadence that needs to occur for deliveries, they guide it to a down sequential quarter from 17,000 to 16,000 in q1 which means they need to make it up on about an average of 23,000 cars a quarter for the rest of the year which is a big number. >> ben, that's what struck me. net cash flow positive 2016 with spending $1.5 billion to ramp up production. i'm not mathematician clearly, but i don't know how they get there. they will have to sell clearly a lot of cars because margins seem to be compressing as well. >> you know, the margin guidance was good. they talked about gaining to the 30% gross margin by the end of the year which was a target for 2015 and they push it to the end of this year, and then 25% gross margin on the "x." now everything needs to go right to hit that cash flow positive number where you can fund your cap "x" without having to tap the market which i think is the worry with every stock we now
have out there with the capital markets the way that they are. >> ben, when i look at the chart, i think we make it a lot more complicated that it is so for the lay person i overlay crude on top of tesla and they are in lock step so other than rallying 10% and selling off 20%, if crude does not rally, can tesla rally longer term. >> you know, as i defended it in the past, i would say -- until i was blue in the face that they wouldn't correlate but they are correlated, especially when you talk about the model 3 or a 0,000 car or cheaper eventually. gasoline prices do matter. >> ben, we'll let you go. thanks a lot for phoning n.ben kallo, senior research analyst over at baird. you make a good point in terms of the cash flow positive by the end of 2016. not just the production ramp for the new vehicles but also, don't
forget, the battery factory that they are going to be spending on. should we be skeptical about these predictions? >> well, sure seems like they are high right now, and i think all of us on the desk, we were watching the stock trade under 140 and pop over 160. i think to steve's point, forget all of that. it's trading with oil, and -- and that really is the driver right now. you look at some of the numbers. the deliveries, yes, they are above, but can they reach the numbers? that's something we won't find out until the end of the year. are they going to get that 80,000 and 90,000 vehicles, really does seem like that's a stretch. >> interesting point in terms of oil, and oil has to find some sort of a bottom or go higher. >> but from here would you rather be invested in tesla or in energy equity? >> wow. >> probably get more bang for your buck out of tesla. >> out of tesla. >> okay. >> i was just wondering. >> i've got a better would you rather. >> seems like they are on the same side. would you rather -- right now --
>> which one would react sooner? >> with oil coming in it's unverse because you get more purchases of f-15050s and more purchases of the standard bigger trucks and would you rather tesla or ford. >> are you going to answer your own question? >> i feel like an answer of your own question is coming. >> nobody wants it. >> if you want to talk about cisco, would you rather tesla or cisco? >> no. >> good question, steve. >> that's a lousy question. tesla, lousy question. i want the trade on tesla, please. >> what they are saying no-man's-land here at 160. 180 was the pivot point so your stop is 140 on the downside and you're looking at 180. risk reward isn't there. pete tells you to play it through options. at 160 it is a as no touch. too many expectations. >> stock is up 11% right now. up next, whole foods rallying after hours on earnings and a very upbeat outlook. hear from the company's ceo on the quarter and we'll take you
welcome back to "fast money." i'm jane wells. the whole foods call just ended at a much better than expected quarter raising outlook to 1.54 a share. started to come down. do not expect same-store sales growth to grow this year and the current quarter started out negatively impacted by the weather. meantime, whole foods is taking forever to get its loyalty program out testing it in philadelphia and another city announced in the third quart ir. we really want to get it right and if you download the app get digital coupons. instacard is being used in growing sales. that will expand. but the other thing they have been talking about is this, the high-low central artery. the low end, the quarter had, quote, more and deeper promotions. more are on the way and more personalized offers which will impact margins. at the high end whole foods tries to convince people that the step is bert and has a new
culinary and hospitality chief. more prepared foods and co-khoe walter robb talked about exclusive brands. >> they increased to 15% of total sales 1, 50-basis point increase over the prior year. notable product launches include a collection of body care products from babies, organic greek yogurt, organic animal sliced deli meats and expanded seasonal and holiday hours. >> cannibalization has worsened for the third straight quarter and more stores will be open. regional records have been broken and in the silver lake neighborhood of l.a. two more this summer. lots of competition from the likes of trader joseph. by q-4-3-management expects to see notable improvements in cannibalization. >> jane wells, thank you. competition not just from trader joe's but the run of the mill
supermarkets out thereto. >> competition from kroger's trying to up their offering and the whole foods turnaround reminds me of starbucks several years ago when schultz came back and management here. this is the lifeblood, that business. don't care about money and have one of the better incentives that i've seen and this is a brand that is an encuring american brand like a starbucks. i think there's still growth here. it's not cheap but it's not expensive either. i like it. >> you do? >> i do. >> kroger's is about 16.5, a little more expensive and deserves the valuation. kroger has been eating the lunch and as you get down to the valuations, no pun intended. i'm with karen. whole foods can figure it out despite the fact that the comps are going the wrong way. >> i think the problem though is bigger than just whole foods. >> is it a trend? >> the trend seems to be really hitting a wall and a lot of head winds and i don't know what makes it better. i don't know if it's a price thing. >> the trend that people don't
want to pay up? because they are going -- >> whole paycheck. >> going cheaper and investing more promotions. >> and they can get the things they never used to be able to get at kroger's and when you look at the comps and whole foods versus kroger's, the value ices, seems crazy they are trading at same valuation but they are beating them and on both sides and that's why i would rather be on kroger's. >> crude fell 2% which didn't stop one trader from making a massive bet on one area of the market. mike here with the action. >> ticker symbol amj was the master limited partnership etp, a big mouthful. what it is essentially is a bet on the mlp energy space, and what we saw was a substantial buy. 50,000 january it 27 and 30 and 40 call spreads. this is trading around $21 right now so the break-even is more than 40% higher than where it's
currently trading and the maximum profits would be about 82% higher in one year. so this is a very bullish bet on the energy space, and this is -- this etp is down 25% year to date. 50% over the course of the last year so betting on a very big turnaround. >> thank you for more "options action" that's friday 5:30 p.m. eastern time on cnbc. coming up, the final trade and final word on twitter. here at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade.
all right. time for the final trade. we kick it off with sun trust's bob peck. bob, grade twitter's earnings report. >> low expectations going in. numbers fine. we laid out a vision which gave hope and now that's about execution. grade "b." >> all right. pete, final trade. >> >> looking at cisco, like the numbers. don't chase it but on any pullback it's a buy. >> grasso? >> 'tis any, still long. those protect that 86.25 mark. if you're going to put new funds to work has to clowe above 90. >> karen. >> >> i am intrigued with this fitbit purchase. haven't seen this before and it's on the bottom. very serious.
absolutely worth a look. >> guy in. >> mr. softy, think they are going to reach for it. >> interesting. >> our thanks to bob peck of sun trust for manning the conference call on twitter for us. i'm melissa least. see you my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you money. my job isn't just to entertain but to educate you. call me at 1-800-743-cnbc. or tweet me @jimcramer. i want to do something tonight that shows i'm a washed up has been on this, my 50th birthday. hey, give m