tv Fast Money CNBC February 17, 2016 5:00pm-6:01pm EST
>> i'm really about the salt and sugar these days so i watch what's in those things, the oil drawdown bodes well for tomorrow's equity markets even though they shouldn't be correlated. a huge debate about the direction of oil. >> excellent point. huge move after the inventory drawdown. thanks for joining me on "closing bell." "fast money" begins right now. live from the nasdaq market site overlooking new york city's times square. this is "fast money." i'm melissa lee. tonight on "fast," confused about the market? well, we've got three stocks that are set to break out whether the stock goes up or down. we'll give you the names and it's the talk of america. apple ceo tim cook pledging to take on the feds in a privacy fight. this could be a very big issue for core investors and jpmorgan sounding the alarm on global markets saying the recent moves are out of control. the man behind that call and why the move in gold has him so worried about the rest of the market. but, first, let's start off with
the markets and stocks soaring as the dow, s&p and nasdaq saw their biggest three-day gain since august of 2015. get this, since the august flash crash we've seen very similar eerily rallies where stocks surge only to return to new lows. so can you trust the rally this time around? guy? >> well, you're going to trust it if it closes above 1950. 1920, i didn't think it would get here on whatever today is wednesday so it got here. 1925. the bears needed to prove themselves on thursday, unable to do it and now the bulls need to prove themselves at the levels we're currently at. 1925 to 1950. one of the things that we did say yesterday was the reversal in the oil volatility index, ovx made a change and closed on the lows and though crude closed unchanged yesterday it should be a bullish sign. for today that held true. api stats out now, big drawdown and crude should rally again. maybe we get another 20 handles or so on the s&p. i can see it trading to 1950.
i think it will fail if it gets there. >> how do you feel about the three-day move? have you done anything today? >> today selling a little bit. >> sold it to the ralies. >> sold a little bit into the rally? >> if the volatility index comes in more, then maybe i'll buy some puts but it's still too expensive. it's been a big, big rally. i feel more comfortable on the other side when things trade down in integers you feel like they are getting puked out and i think the puke is over for now and i -- i'd actually be selling into it. >> b.k.ers? >> all the things that keep me up at night haven't changed with the market is 40 or 5% off its low or it goes to 1945 which could happen at month's end. you have a countertrend real, still in a bear market and you saw it from the august flash crash and countertrend rallies and the lower lows and lower lows and i think that will be the overriding theme this year going on, so, yeah, i would fade it into this.
what did i do today? i just stayed hedged on my bearish positions and put them on about a week and talked about them here on the show and we stay that way in the end of the month. >> i think a lot has changed. when i look at it. i think about also what's happened with oil, first of all, can i make a very strong art that oil is the dog and central banks are the tail, and i think about the ecb back in january of 2015 which was forced by the -- essentially the deflationary elements of oil to overextend and overpush. i think oil is an enormous part of what is different now. i think banks are a little bit of looking to decide the balance sheet and understanding where banks are. again, this is probably more about earnings quality, but i get why we're asking the question after an enormous move in markets and why does it have to be one or the other? to me markets will be sideways and extremely volatile for a long team. >> do you sell the three-day ral? >> ultimately there are things you do. volatility, vix down near 20, 21 is a place to buy. iwm, the russell, which has been very volatile, threw some of those puts out there today.
i agree with karen. i want to trade this round. i have a long book and things to protect. a great place to do it, but i don't think markets -- you know, 1810 to 1950 to 2000 is where we are in the s&p. until proven otherwise that's a choppy range people should accept. >> let's go one step further on that. in terms of the things that we've seen rally the most in the past three days, which rallies do you think are the most specious. >> >> might be the banks. >> you would -- you would fade the banks. >> like deutsche bank, and then the other side of that coin is names like freeport-mcmoran, i'll be honest. when it was a 4 and change stock it was headed to 2 and change. steve grasso took the other side and here we are at 7, but i think that's gotten way overextended to the upside, as i think banks have. the move in deutsche bank i understand. i see what's going on there, but i think there's going to be an opportunity to sell that as well. an interesting day tomorrow. we'll see if oil after these stats, after today's action can hold on to the gains we're seeing in the aftermarket.
>> i don't think the banks are overdone actually to the upside. not selling any of those because i think they were so ridiculously done to the downside, you know, the intraday from the low has bounced a lot, but if you look at jpmorgan, still down a lot. they will have investor day on tuesday, and so i think that's potential catalyst for jpmorgan. >> what is the catalyst for the next six months in the curve, flat rates, negative rates around the world and an equity market and capital market. >> you leaning harder to shorts. >> yeah, that's the first thing i would have said in this. the banks underperforming i think are a telltale sign that we're still going lower. >> so i would lean into that. >> what do you do with a deutsche bank, which has rallied 20% into the face of what everyone thought was going to be a major liquidity crisis and something we've learned over the last few days is deutsche bank has $215 billionch your reserves that they are ultimately there. leverage ratios a little bit off their targets but these guys are still very much in the game. there's very little balance sheet risk, that in fact these guys are getting 55% of the
funding from the deposits and the other 22% -- >> you don't think this is a short covering rally, that we're seeing a short squeeze. >> brian says you go after it. stay with that short rally and brian saying he's going after it. i think that's crazy. i'm amazed that after this move it's something that you shouldn't feel a little bit more costly. i think there's new information out there. >> the new information is the buyback of the bonds. it's stop the death spiral. it was in a death spiral, where people were hedging their bonds with the stock, and that was creating a liquidity issue. now i've said from the beginning i don't think that deutsche bank is going to be a lehman brothers type of situation and the operating environment for european banks is awful. if the worst came to worse could the ecb come in and bail them out if they needed to? sure. but if it goes from 17 to 18 to $1 it's still going to feel real bad. >> let's talk about the real and the question we ask are some. most hated stocks on the street actually responsible for this three-day gain? paul hickey joins us.
what did you find? >> if you base up the s&p, you go increment ily on short performance it gets better to the most heavily shorted so they are up twice what the least short are so you can certainly say it's a short covering rally. the only issue is calling it a short covering real. every bounce we saw during the last bear market was a short covering rally and the meaningful rally in 2011 and march 2009 was a short covering rally. rallies begin with short conversation, so it's hard to focus on that, but in the short term here, we think the onus is on the bulls here to -- to prove themselves here. we seem like the opening graphic we showed here, there's been several rallies since august, and they have all been met with lower lows, so until we make that string, it's a little bit of a show me for the bulls here, and, you know, short term we've had back-to-back-to-back 1%
gains and looked at prior periods where we've seen that, it's been week. oil has had a 12% one-day move, a 9% one-day move and 8% one-day move and a 7% one-day move so far this year. >> sounds like it's a sign of a turn. >> and we've seen these big gains. japan's had an 7% move, a 6% move and a 7% move in the last six months. it's down 22%, so when you see the big moves they are morning characteristic of weak market environments han strong market environments. >> let me push back a little bit and i'm generally bullish. we don't talk about when you see big, paying drawdowns, it's all short selling so that's not the same kind of selling at long selling, and i feel like here you're saying it's short covering. that doesn't matter as much as long buying. you know, i feel a little bit like hillary clinton what difference does it make if there's buying, there's buying? >> that was my opening point. just looking at the specifics and the characteristics of the bounce, it happens the same way in dead cap bounces or
meaningful rallies so just take that for what it is, it's just an observation point here, so the short-term head winds that i just mentioned, the billing moves happening in weak markets and those are short-term reasons not to be overly aggressive. >> basically this is an inflection of some sort, it seems. >> i mean, we could either have a sustained rally because all rallies start with short covering rallies or most rallies do or this could be a short lived thing. the onus is on the sgluls why is that your view? >> because every rally that we've seen has been met with weaker -- has been lower lows. the earnings of what we've seen so far this quarter haven't been great but getting past this earnings season, looking out six months, several factors. we were talking last week on "power lunch." the longer-term reasons to be -- to slowly edge into thing, but i don't think you want to -- like you were saying, do you want to chase the market right after a three back-to-back 1% days. i think you want to sort of pick your spots. >> well, you know, i look at the
dollar and look at oil and think they are related. this is what's shaping up and making this different i.said at the top this isn't a time to stampede and bull away. but to look at the anxiety in the markets over the last six weeks saying the dollar is stuck where it is and everyone who thought the dollar was going higher is in a tough place because at the same time you see an argument like all the thing like transports, supposedly leading indicators and were so destroyed and up on the year, ups and ksu, cummings, all these names are up on the year at a time when this is supposed to be a difficult environment. >> because if that's short covering then you have to discount how much they are up. >> and that's the point. if you're short you're more aggressive in buying because you're chasing, that's human nature, so if indeed this is a short covering real, then the -- the magnitude of it matters because you may not say you can't say well then they are up on the year necessarily. >> as crude oil market
stabilized, that's the question, so to say and get bushel here you have to predicate it on oil stabilizing here, which it hasn't done yet. >> right. >> so if we do see stabilization, then that is certainly a positive because like you said, foreign, you know -- there's been foreign selling in the u.s. markets. you see weakness in the morning and strengthened in the afternoon once the foreign markets are closed. >> paul, thanks for coming by. >> tim mentioned the transports, bottomed out in january, but on the last thursday. >> and here were in the iyt. led on the way down, maybe they are leading on the way back up. i'm with paul, bulls have to prove themselves. two days closing above 1950 in the s&p will be enough for me. >> all right. breaking news here on the gop candidate. cnbc's john harwood is here with the story. john? >> reporter: we've got a new nbc/"wall street journal" poll
of republicans showing donald trump not leading the race, that's the news. ted cruz leads with 28% to 26% for donald trump in this poll. marco rubio trails behind with 17% and then john kasich at 11:00 and ben carson at 10 and jeb bush in 4. last month trump was leading cruz by 13 boss, and here's what was different this. took place after the new hampshire victory by donald trump and also after the debate last week in which he bitterly went offer george w. bush who is popular here in south carolina, popular among republicans nationally saying that he had lied to get us into war, saying that he failed to prevent the 9/11 attacks and faulted him for not keeping america safe. our pollster who has been around a long time covering these cycles say we don't know yet whether this is a temporary paws with republican voters pulling back for their judgment and it's
happened at earlier points in this race and donald trump has come back stronger than ever, or could this be a turning point in the race? we don't know yet, but as of now this is very striking because it's different from what other national polls are showing. we have ted cruz leading donald trump 28% to 26%. melissa? >> this is going to be one to watch. john, thank you. john harwood, fascinating results out of that latest poll. tim, what do you make of it? >> interesting, maybe this is also saying that donald trump is really an independent. i know he's part of this poll and this and that, but i would not be surprised to see donald trump as an independent. i think it's probably going to be a better road for him and the feeding frenzy within the republican party makes an interesting poll and move follow him to make. i'm agnostic, not making that call one way or the over. what i would tell you i think the republican party is doing enough to themselves that trump may want to step outside of that. >> what's interesting coming to trading in the mark. over the last week or so i've talked to more people that are starting to be worried, worried or concerned about the election,
starting that to factor into their investment plants. >> about what though? >> what's the outcome. look at top four leading candidates in terms of business-friendly, market friendly. >> run for the hills. >> none of them are. >> exactly. >> that's my point. >> that's -- that is now starting to permeate the marketplace. people are making investment decisions based on the election. >> up next, it is the one group of stocks that just can't stop rallying, and it could be signaling the next big clue as to where the consumers are finally spending the gas savings. we'll tell you what it is. looking for safe places to hide out. we've got three stocks that are ready to break out. we've got the names and how you can get in on the action, and later the debate over privacy versus security. is apple in the crosshairs but is tim cook less battle with the feds cause to stay away from the stock? a surprising take, and much more "fast money" right after this. man 1: [ gasps ]
man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried? man 1: you are the ceo.
"squawk on the street" earlier today and spoke of the impact of lower oil prices on his business. >> one of the things that people underestimated is travel specifically really benefits from lower oil prices and we're seeing in particular that macro effect having a positive impact on our business. generally it's a pretty healthy travel environment. certainly the terror in paris and issues you -- you know, people see in syria and turkey, there's pockets of issues around the industry, but generally it's positive. >> what i think specifically he said, you know, that was interesting on the call was that in recent weeks drop in fuel prices have been working. >> it seems like we're getting a delayed effect from consumers across the board. it is very interesting. xfs, which i know you can't count, bookings up 29%, a company thrown around at volatility 2, 1 times forward 2017. i don't think it's terrible. in fact, i think those are pretty decent valuation.
c-trip, own a piece and they are exposed globally. if you don't know that one it's anning in company. >> marriott which we'll get to. you wonder is that consumer saving money on airbnb and it's interesting. maybe marriott is a have not in the -- in the space. >> saw a rise in international book its but not domestic bookings which was interesting to take away. >> you should be fading the airlines, tremendous rally coming off and this could be an aberration type of thing and the airlines, particularly like a united airline trading up against 52, that's where i would take a shot. >> boeing one of the biggest gainers on the dow today and this comes at bogue ceo defended the company's accounting practices for a 787 dreamliner earlier today and that's just one week after reports surfaced that the s.e.c. was probing its financial projections. the ceo confirming nor denying
the existence of any investigation and the s.e.c. has also declined to comment. guy, what do you do here? >> wait pore it to get to 120 and sell it again. jpmorgan downgraded the stock and took the price target from 142 down to 120. if you remember for a long tim 120 was the level we talked about being support and broke through there and traded down to 102 and change i think over the last few sessions on huge volume. i think it does get back to 120. i think people will cover it up there and if you're long you sell it there and if you have the temerity to put things and put it on a short position. in my opinion where there's smoke there's fire. >> what people are misunderstanding is what they are calling program accounting, kind of what's being called into question is incredibly complex, takes in hey lot of assumptions and inherently it's going to be wrong or going to miss on something. >> this is par for the course. >> it's what they do, how they report. have had a blizzard of bad news on the stock. i think the stock is a buy and
looks very interesting at these levels and people are counting them guilty before not understanding how they do it. >> still ahead, the ultimate test for the consumer, walmart. one of the top performing dow stocks out tomorrow morning and traders take their position ahead of the bigger report. you're watching f-fun, on cnbc. >> looking for a shaf place to hide out? no need to fear. safety plays in a very scary market. plus, jpmorgan sounding the alarm on the global markets. saying things are spinning out of control, and it's one specific asset that's the biggest cause for concern. the man behind the call when "fast money" returns.
welcome back to "fast money." the man who called the collapse in deutsche bank is back and despite his bearish position overall he's got some bright spots. let's welcome carter worth. which charts are you looking at in the. >> three and they are defensive names in the first two and let's look at them. >> philip morris, coke and then
corning, but start with philip morris. one thing we know is that if you have a circumstance where a stock has worked off of the low and you have a higher low, higher low and yet it doesn't make too many highs, a lot of tension and keeps trying and fails and ultimately you can draw the lines like that, and that kind of tension, call it a wedge, call it an ascending trail, but more often than not you start to break out and we just did today, so we're looking for a pretty important move here, a defensive name, independent of what the market does. here's another name. it's the sake circumstance and you can draw the lines the same way, both defensive and both yield plays and the point being when you get back to a prior peak you struggle at that peak because people from here unload and they had a horrible experience and the guy from on here unloads because he has a great experience, so this represents the memory and ultimately you should get a resolution of this standoff so strong stocks at 52-week highs look like they are going to get stronger and the third is
heretofore a weak stock that's bottoming out. draw your lines like this that's a double bottom, and what's important sheer this, that we've broken above the downtrend line that's essentially been in effect for the better part of two years, and this action here typically is concluded by a move above these tops and saw we're also looking for a fairly powerful move out of corning. despite what the market do, we think plenty lower. there are always names to buy. >> all right. carter, thank you. >> you know, it's interesting as two of the three stocks are i believe current positions or current holdings of you guys, coke and p.m. >> you own both. >> i own both and both these names fall under names that i think we've had nice debate on dividends. do i want to own them. just because the stock has a good dividend. coca-cola has a good dividend and there's strategy changes, a stock with a lot of issues over the last few years and by 2017
they will be growing eps and a lot of these companies do deserve a premium multiple in this tape. no question with yield. people are starved for yield. >> philip morris 4.5% dividend and that is as safe as any dividend is going to be, right? no guarantees out there but for floirs i think you'll be able to get a $4 a share horvat next year, plus you have momentum in its favor in a sense, right? it's held up very well, even during the market downtown so when i look for something to buy and something to hide out, that's where i want to be. >> coca-cola, real quick, may grow at 10% eps, but they are not close to that now, and i think they trade close -- >> would be flat. >> close to 20 times forward earnings. great chart work. >> as always. >> coca-cola topped out in '99 right around 45 bucks, traded there again i think in the fall of 2014 so how would i -- i'd rather trade it on a breakout to the upside above:45. i know that might sound somewhat
counterintuitive and needs to prove itself where we are right now. >> any of these fall on your value screen? >> corning at one point, lost money and just have a bad feeling, for no good reason. not dissing corn, the company. >> you can. you're allowed to and what we do on the show sometimes. >> my own personal bias. >> it's funny. one point of the show where corning would come up constantly. >> exactly. >> yeah. >> this was kind of the '06-'07 esknown king, emerging markets, easy name to get excited on growth. >> and i'm not excited anymore. >> apparently not. >> very honest, karen. >> very honest. >> coming up, the latest in the battle between apple and the fbi and what the next move to move for apple investors and jpmorgan is out with a terrifying call saying the global market is, quote, spinning out of control. the man behind that call and the one asset glass that he says is the biggest cause for concern when "fast money" returns. vo: know you have a dedicated
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welcome back to "fast money." stocks rallying for the third day in a row. the dow and s&p having their first three-day winning streaks of 2016 and their biggest three-day gains since the august lows. dow soaring triple-digits while the s&p soared 1.5% pushing it out of correction territory. second half of "fast money." are things spinning out of control? the market move that has jpmorgan sounding the alarm on the u.s. and where the best place is to hide out and wall markets one of the best performing stocks in the dow. its earnings report tomorrow send the stock to new heights? the traders will weigh in later on. apple dominating the headlines after the ceo tim cook refused a federal judge's order to represent the government hack into the iphone of one of the san bernardino murderers. eamon javers is in d.c. with this story. eamon? >> reporter: a real standoff between apple and the federal government, specifically the fbi and the department of justice.
the fbi says they want access to the terrorist koehler syed rizwan farook's el phone. it's an apple iphone c and can't get in without help from apple computer. the judge ordering apple to help in the process of unlocking this phone. what they specifically want is to stop blocking the fbi's attempt to simply dial the pass code over and over again randomly until they stumble into the pass code to unlock that phone. apple computer, however, saying they are not going to comply with that order. here's what tim cook said in a statement that was posted on apple's website last night. saying opposing this order is not something we take lightly. we feel we must speak up in the face of what we see as an overreach by the u.s. government. we are challenging the fbi's demands with the deepest respect for american democracy and a love of our country. meanwhile, the white house weighing in on this from the spokesman's podium today, josh ernest saying the white house supports the fbi.
>> obviously the department of justice and fbi can count on the full support of the white house as they conduct an investigation to learn as much as they possibly can about this particular incident. >> donald trump also weighed in today on this issue siding with the courts and law enforcement not with apple supporting apple here. edward snowden, the nsa whistleblower, he's tweeting from russia saying the fbi is creating a world where citizens rely on apple to defend their rights rather than the other way around. so, melissa, where we go from here is apple has a few days now to respond to this court order and then if they don't like the way that decision is handled down they can appeal it up to the ninth surcut and possibly after that all the way to the supreme court. >> specifically issues that there's ten attempts that you're allowed to try the pass codes and once the ten attempts have happened then essentially the phone shuts down and it's not accessible anymore. would this happen let's say
if -- if the suspected killer had a samsung phone? would we still be facing the same issues? >> i think you'd be facing issues specific to samsung software, their phone, but fbi is aware that this new ios 9 software that farook was use does have an auto erase capability and they want apple to suspend that auto erase on the phone so they can do a blunt force abeing it a. not asking apple for the password because apple doesn't know that. they are asking apple to suspend the ability of that phone to erase all the data on it so that while they try to guess the password the data stays in there. they can figure out who farook may have been working with or communicating with in the hours and days lathe leading up to this attack and where he was and those are key elements to this investigation of the terrorist attack back in december. >> and if apple suspend it had for this particular phone would that have implications for other apple users or no? >> that's clear lit concern here on the part of apple. they see if they are forced to
create this kind of software that would allow this particular individual phone to access, the software would exist and could potentially get in the hands of hackers, bad guys, male violent governors and others around the world and that could be a security problem for millions of iphone users around the world. the u.s. government, you can rest assured, does not see that threat in the same light as apple does. >> eamon, thanks for bringing this issue to light and explaining all of this for us. eamon javers in d.c. >> cooks move bringing to light how much your personal data should remain private. take a listen to what t-mobile ceo john ledger had to say about this very issue earlier on cnbc. >> he's in a real, real difficult spot. he's being requested to help authorities deal with the security of the device, and, you know, we'll see where it goes. i wouldn't know how to advise him but i understand both sides of the issue and i think it's
ground-break. >> we value security and privacy for our customers, you know, at the paramount basis, but the questions right now associated with national security and horrific acts where 14 people were killed, i really don't know how to balance it? >> what does this mean for apple investors and for the stock? does it have implications or not? >> i don't think that it really does. it's such a unique situation. i don't think that people will feel, even if they end up needing to comply, let's say that does happen, i don't think people will say, you know what, i canned buy an iphone. i'm concerned about security. >> i think that may not be right but i don't agree. this is such an emotional issue, and i think apple is wrong. i think they are digging in. >> emotional meaning they should give up. >> they are going to wave the flag and say i will never buy this company again. >> i don't see this as the end game for apple. >> this is not a case of the fbi being arbitrary saying we need to look at something. this is a mass murderer. edward snowden can go hide back
under the rock. this is a case where a company has an obligation in a very specific situation. this is not we need general access, this is getting information vital to our country. >> but's eamon said once you create the software to do that, that software exists and what if that software lands in the wrong hands? >> they are going to lose track of that software? come on. >> they could put it in a locked phone. >> this is a situation that can happen again and again and again. let's not try to make this a bigger issue in terms of what could leak in enemy hands. i mean, they are going after some specific information and give it to them. >> i can only speak for myself. if there was a change to my apple phone that allowed me, government to get into, it i don't care. i would still buy an apple phone because i like the product. whether or not people feel that way and it translates in the stock buys, i don't know. i don't think it will. >> tim got emotional about this, rightly so or wrongly so, he was
emotional. if this becomes politicized and becomes bigger than, that will you start hearing people say, you know what, ban apple? i'm not say it's going to happen, but as emotional as tim got other people can get equally emotional and the world we live in now things happen very quickly. >> i'm half italian. >> but the issue, too, is where do you draw the line? if the u.s. government this time, happening within our country, what if there is another government of a country which apple operates and they are asking the same thing for another investigation which we may not agree with. >> and then what? >> and then what? >> the american company responding to the american government. it's really simple. >> we should note that apple co-founder receive wozniak will be on "power lunch" tomorrow at 2:00 p.m. eastern time. interesting to hear what he has to say about this situation. still ahead, are the recent market moves out of control? we'll tell you what jpmorgan's head of fixed income is sounding the alarm right after the break and shares of walmart are outperforming, but one thing our
trade remembers waiting to hear from the company tomorrow. we'll tell you what that is later this hour. much more "fast money" straight ahead. in new york state, we believe tomorrow starts today. all across the state the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating next generation technologies. let us help grow your company's tomorrow, today at business.ny.gov
across the world are out of control. bob michel is the ceo and head of global fixed income for the commodities group. joins us here on set. thanks for being here. >> thanks for having me. >> one of the things you mentioned is $100 an ounce gold and what that signals to you. >> absolutely. when you look in the last few months in totality, there's some significant dislocations. when you look at november and december, ten-year treasuries have been trading peacefully at 2.25% and then bam, down to 1.5%. you had high-yield spreads which were 600 basis points over and go to 900 basis points over and had you gold which had been trading at 1050 suddenly go to 125 and that told thrust was a lot of concern in the markets. people were looking for a safe haven and gold was actually the currency of preference at that point in time. look at today. today is not a safe haven trade day, right? equities are up, bond yields are
up a bit. what happened to gold? up ten bucks. >> you actually made the comments on nbc a few days ago last week. >> yeah. >> specifically. >> and since then we've had a three-day real, some of the biggest gains in months and months and monies and nothing in your view has changed even though the treasury yield is back up. not 1.5% anymore. >> so what's changed is greed has replaced fear. you've had that significant repricing. people have had cash and are going back into the markets and putting it to work. we're doing it. we were in buying high-yield and corporate bonds in the last couple of days so i think you have to appreciate that that repricing has occurred. does that change the fundamental picture? i don't think so. i think there's a global growth slowdown under way. when i read the fed minutes today, i see a central bank that's out of sync with the other banks in the world and second guessing it self? >> here's the question and u.s.
centric trading show for equity investors. what do people in the u.s. who have the option of only buying u.s. stocks do with their portfolio given your scenario? >> i think you stick with hoy quality. when you talk about how we're investing with corporates we're sticking with high investment companies. we're talking about apple, came with long debt and that's prudent management of their balance sheet. >> on the fixed income spectrum where do you go then in your scenario? >> quality duration. >> okay. >> and it means a lot of different things. >> we look at countries that are suppliers to china. we see a big slowdown there and think that central banks will have to adjust rates, people like australia we see rates coming down a lot. look at peripheral europe that. traded off in the risk-off environment so we're able to go in and buy italy and spain at yields that i think are too attractive with the central bank in buying out the net supply
every month and then, as i said, corporates reprice. we're sticking with the high quality corporates in both the high-yield space and the investment grade space. >> bob, thanks for coming out. out of time. bob michele of jpmorgan. >> he thinks peripherally europe is hanging in there which is great and i tend to agree with it. we're an environment where liquidity is tightening around the world so to say it won't fool on the high end of pressure. i think we see massive dislocation of markets. that's an opportunity though, even though i think the world is a slower growth environment. >> both down a lot and to bob's point, up ten points. gdx is hanging in there. something going on in gold and the other thing, i didn't realize italy was a peripheral country. that bums me out a little bit. >> actually called the biggs, aren't they? >> i didn't make the term up? >> i'm asking a question, not making any statement. >> fortunate trying to understand. >> just saying. >> after the break, a big rally for twitter today after the
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welcome back to "fast money." an earnings alert on jack in the box. let's get to seema moody in the newsroom. >> reporter: stock down 19% after reporting weaker than expected first quarter results. according to the company solid sales and traffic results at qudoba were due to expected margins and the chief executive said sales were sluggish at jack in the box restaurant as several competitors began promoting aggressive offers and guidance came in well below expectations. the stock down nearly 20% after hours. >> seema, thank you. sounds like bad news every which way you slice it. >> mcdonald's. >> is that two words. >> one way for me. >> golden arches. >> and i thought that would win with chipotle's loss and maybe people got scared of the entire space. down 20%, a little bit of an
overdone. 2014 it topped out at 60. past resistance should be support. >> getting worried about mcdonald's? you're long, right? >> i -- i don't think so. i mean, i think this is a case where the valuation isn't terribly cheap. this has been a defensive stock during a difficult time. when the bad stuff is flying higher mcdonald's is probably going to be sideways. it's been sideways. hasn't been sold off. it's been trading pretty well considering the tape. >> walmart out with earnings tomorrow before the ball according to analysts. big box retailer expected to report declining revenue and time for a little take your position ahead of walmart. karen, where do you stand on this one? >> i like the retail space because i like what's going on with the consumer, but i don't -- i -- i'm not long walmart. >> is it expensive? do you not see the turnaround really taking place? don't believe the ral? >> i feel like it's been for several years we've been talking about walmart sort of trying to get their mojo back, and, i
mean, relative to amazon, much rather own walmart for sure but don't here. >> had too much of a rally for me to buy into or even after earnings. even on weakness would i late and let this settle out and see if there was any weakness and to me it's had such a run it's as no touch particularly ahead of earnings. >> yeah. >> i actually think wall smart will be to outperform and agree with brian's approach into earnings, tactically this is how i might approach it. these guys have the most momentum to gain from, you know, their recent history. i think their comps are pretty easy to beat. i think they have a lot of problems there but same store sales saying they are finally getting it right. >> do you think it has to do with the view on the economy that things are worse so it proves that the economy is actually decent, what happens to the walmart trade, it unravels sns. >> this stock has gone from 56 to 66 i think in two weeks, a pretty significant move for any stock, not least of which is
walmart so if the economy is getting better, does it unraffle? maybe so much. i mean, this has had a horrible couple -- i mean, really horrible -- you don't think it's getting better? >> i don't. >> i think 56 and 66 in two weeks is too much for walmart. >> yeah. your view on that, i'm curious? >> i think that this is company is a victim of its own problems over the last years. went to small stores and fresh things. losing their price. it's all about price for these guys. trying to do too many things to compete with amazon, et cetera. their problems are their own. i think they are getting some of their mojo back and, yes, it's a defensive stock, high div. great balance sheet, you know, that works. >> twitter shares rallied 7% and some traders are betting the stock will continue to fly over the next couple of months. mike coe is in austin, what did you see? >> a lot of call activities. outnumbered puts by 5-1 and almost all of that unusual volume was the result of one big set of trades where somebody who
already had some bullish positions hon in twitter did some big adjusting, selling out of one call spread and rolling one of their other calls to the june 21 call trading for $1.30. ultimately this trade was long 11,000 of those, bullish bets that the stock would rise 20% plus by junics peration so extensively extending the rally off the lows which is 20% between now and june expiration. >> do you buy into this, mike? >> you know, this is an interesting situation. really disappointing me in terms of fundamentals but here at the end of the day i think about it this way. twitter actually has some engagement from its active users and haven't figured out how to monetize that and that was a problem facebook might have faced in the early days. this is an unusual social media property. i use it and i think everybody else on the desk use it and once they figure out how to monetize it it will be worth a lot. >> anybody buy into the notion that twitter set for another leg higher? >> yeah, i am. >> you do, too?
>> yeah. listen, you know, again, they are getting to the point where all they need to do is one thing right. they haven't been able to do that one thing right but at some point you're throwing up darts. could you see a 20% rise in there? >> sure. >> i'm long the stock and i'm clearly not happy and what make said they are growing 60% year over year in terms of ad revenues and i think they will probably build on that, but you have a very loyal user base, more loyal possibly than facebook. those people who use twitter are spending as much time on it per day as people on facebook or more and they haven't figured it out but i believe they will. >> stop talking about monthly average users and get away from that and get away from that me traffic. i think it helps them in the long term and be more like google. tim is going to be right on this one. i think will rally from here. >> for more "options action" check out the full show 5:30 p.m. eastern time on friday. coming up on emmuoney, cramer
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and finally fast but not least, a very fitting song for california journey, the german short-haired point taking home the title of best in show at the annual westminster dog show. he's the third of his breed to ever take home the top prize. >> good looking pooch, right, guy? >> look at that. >> final trade time. to the male hound? >> yes, that's me. eem, close out that trade. >> b.k.ers. >> oil looks like it will be up. the whole world wants to be long, b.k. is hard wired to be against consensus. sell xle. >> chairwoman? >> a big retail rally this year but it's time to sell a little into it. children's place, to say good-bye. >> negotiator? >> the knee jerk was to take it
lower, higher than the close. i saw with this rally on ntap. >> i'm melissa lee. thanks so much for watching. back here tomorrow at 5:00 for more "fast money." don't go 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 save you some money. my job isn't just to entertain but to educate and teach you. call me at 1-800-743-cnbc. or tweet me @jimcramer. after today's tremendous rally with the dow gaining 257 points, s&p vaulting 1.65% and the nasdaq roaring 2.21% it's worth