tv Fast Money CNBC March 14, 2016 5:00pm-6:01pm EDT
mike, thank you again. that does it for us here on "closing bell." "fast money" begins right now. "fast money" does start right now. lieu of from the nas dance market site overlooking a rainy new york city's times square i'm melissa lee. traders are peter najarian, brian kelly, karen firn men and guy adami. if you've been sitting out the rally we've got three stocks to get you back in the name. we'll give you the name and crude and stocks did something very unusual and it could be the quote, key to economic nivena and the techerass e-i on the new smartphone. we head into the biggest week of stocks with the bank of japan meeting and the fed on deck. if you're nervous about the markets where do you put your money to work right now? are there opportunities out
there. these are the hideout stocks. >> hey, i'm always nervous. what do you say? >> yeah. >> three names. look for names that have done pretty well over an interesting last month and the three that come to mind for me are coca-cola, which is making all-time highs. no triple tops so coke is in the next range. a lot of analyst upgrades into their earnings in a couple of weeks. home depot which seems to do everything right. had a big selloff. coming back now and i think facebook is going to knock the cover off the ball when they report in three weeks so names that have done well despite market volatility, that's where you like to be. >> do you like those names, pete? >> i love growth. i love value, i like all three but i'm going to add a couple more. >> really? >> you're exactly right on coca-cola. i've been owning that stock for a couple of years. i think some of the investments outside of the koala world is part of the reason why i like them so much because they needed to do that. they have done that and i think that's part of the reason that the stock is actually moving up. i would throw in apple and google and value. i look at the yields and the
cash on the balance sheets. all of that i think for those reasons, those are the names. i'll throw one more that has had a little bit more of a pe multiple on it. coke and pepsi. >> you think they can live side by side. >> i think they can throw the pe for pepsi is extremely high right now. >> karen? >> doesn't make a difference that the fed is meeting and the doj in terms of what you're holding in your portfolio. >> names like google is ones they both like. i like as well. i don't think it matters what the fed does here. retail, i think the u.s. consumer is really not going to be affected by a quarter point, one way or another, and i like oak which is a name we talked about before because it's a way to play the energy-high-yield energy collapse without knowing exactly what you're doing. let them do it. they can do it, and so i think actually there's some volatility that would be good for them so it's kind of a hedged portfolio. >> okay. >> consumers seem to be a big theme on the desk here. >> you can have it. sold to all of you. no, no. not on in this environment and i
do think the consumer actually will be impacted by the fed. if you think about this, the consumer is weak already. look at auto sales. not doing very well. but if we have a rising dollar and a rate hike again in this environment, ultimately if you're our consumer and work for caterpillar you're not doing so hot. if you sell doughnuts next to the caterpillar plant you're not doing so hot. it is all connect the. the boj and fed matter to me. if hi to buy something ahead of the fed it's utilities because i have that dividend. >> if i had t-- >> if you had to? >> if i had to but i wouldn't. >> i would stay with my longs. >> absolutely. that's a great play. right now you have to buy volatility, s&p puts, why wouldn't you? the lowest it's going to be. when you look out, every time the fed has hyped rates for the next five years you get higher volatility so in this
environment, any time volatility gets this high, you buy it. >> the 200-day moving average has bumped up against and at 1860 it's failed each time. you do have to protect your portfolio. i would also say, how about target. you don't like to go outside the united states. target i think is one of those names that's just continued to -- brian cornell has done an unbelievable job and give you a great yield. the insiders bought when they told you it was time to buy this name and this name continues to perform over 80 bucks. >> rather buy coca-cola. >> how about both? >> the impact on that and that would impact coke. it would impact your pepsi. i mean, are you concerned about that? >> i'm concerned about everything. >> okay. >> but i will tell you, coca-cola, for example. look at the way the stock has traded over the last three months. rising dollar, falling dollar, rising market and falling market. it's done really well so when stocks trade well for potential head winds. that's a good sign. my one pushback to pete is i'm with you on google. when that stock went from 800 to
700 in a day. any concerned a all or is that just a blip? >> go ahead, karen. >> i just thought the environment at the time was so anti-f. a n.g anti-f.a.n.g. i think we're in a different market. >> people were going to get cash. so concerned about energy or whatever areas they were looking for. so grabbing for cash. pushed down apple and google. google's numbers were fenoam nal and in video is another example. video is a huge area. it's the beginning of growth for google and facebook. >> entering a period where people want to reach for cash. to your point, guy, the stocks you like are the ones that are doing well. are those the first to be sold? >> not necessarily those. more the stocks like apple and google where people feel like they can get back in and have used the stocks as an atm. you saw carl icahn i believe use apple as annitem.
didn't sell apple because he doesn't believe in the store anymore and sold it because he probably needed to raise money for something else so apple is a source of something else. >> do you like gold? >> yeah. i mean, it's had quite a run, and i would be a little concerned. we still have to break that correlation with the u.s. dollar so i would be a little concerned about gold at these levels but on the pullback of a buyer. i like silver here. >> despite crude falling more than 3 has stocks surged in late-day trade and is this decoupling it? dennis gartman joins us now. you've been saying for some time that it would not be the coupling that had existed and you say this is it. now what? >> first of all, i've never believed in the coupling of stock prices to crude oil. it has indeed occurred over the past several months, but if you look at crude oil versus stock prices over the course of any protracted period of time, six months, one year, two year, over the course of the past four years, stocks have gone up and crude oil has gone down. the correlation is negative, not
positive, and i think that this is a healthy sign today to see stock prices do a little bit better and to see crude oil prices weak, and i think that that's going to continue. the long-term correlation is negative and i think today is just a return to the long-term correlation. >> why are we at levels now for wti, dennis, that leads to you say we're in economic nirvana? >> i think that crude is very pleasantly priced at $37. i've said before on the show that i think we could be $5 either side of 37 for a long period of time into the future. i think -- let's call it 37 to 42 or 32 to 42 as a big range. i think at $37 consumers are happy because retail gasoline prices will probably remain under $2. at $37 and a reasonable contango you get $42 in the deferred futures. hedgers, frackers will be -- they won't be happy about it, but they will produce for that price. i think everybody is hammy, and i think quiet prices for crude
oil over the next year or two are the absolute nirvana for stock prices and for the economy in general. >> with 37 plus or minus $5 on either side, dennis. >> yeah. >> keep the self-defeating rally that jeff curry of goldman sachs was talking about at bay in terms of low enough to keep excess production off the market, not high enough to get, you know, rigs back in line, frackers back out there producing it at levels from before? >> i think that's exactly what will happen. the only difference will be that the frackers are learning how through various production capabilities of actually producing more out of their fracked wells than in the past. we had thought there had been expected to be a sharp decline in fracked well production, and you're actually not getting that. they have learned how to get more oil out of fracked wells already so i think either side of $37 is actually -- is indeed nirvana. consistency is the hallmark of strong economic growth, and i think that's a very good thing. >> all right, dennis, thank you.
dennis gartman. >> thanks for having me on. >> all right. who agrees? is this nirvana? are we witnessing nirvana? didn't even know it? >> i'm not a big nirvana -- understand what he's saying. not a big nirvana guy. crude sold off 3% and ovx closed unchanged which is encouraging if you stay long crude and are bullish. i still think some of these energy stocks have gotten a little ahead of themselves. we mentioned specifically schlumberger on friday. said at 27 times forward earnings it makes no sense. that was down today. i think the crude movement is over to the upside. the fact that the ovx didn't rally today concerns me a little bit but you've got to give it a couple more days to play out. >> how about you, karen? >> i agree. it's been almost 50% from 27 to touching near 40. that seems overdone, so some of those stocks that were sort of a little sliver of equity that just exploded, the chesapeakes of the world, you know, that one i wouldn't -- i wouldn't touch it here. so i think we have to just sit back and watch for a little bit. it's so dangerous. >> right.
>> to jump in right now. >> yeah. so on crude oil i would argue that perhaps the 45% to 50% rise that we've had may be the reason why the market has sold off a little bit. if we have that negative correlation up at these levels gas prices have started to come up a little bit, albeit they are still very low. >> we may be past nirvana. it's one day. it's hard to kind of put it all together, but i would just say we would have to have crude oil stay like this for 18 months between 32 and 42 for 18 months before it really filtered into the economy. >> it really is early to call nirvana. >> i mean. this has been a very swift move from 26 to 37, and here we sit right now. i think the most important thing is when you look at a day like today. down 3%, 4% on crude and looking at the wti and look over at chevron and exxon and conoco and the names that have given us the reports of what their plans are, big solid names, they didn't get pushed around the way they had been in the past. >> right. >> so we'll see if that's a one-day phenomenon or not, but i think a little bit of the
read-through is are we in a new range, and is that range higher and if so, seems like the big guys who have addressed things can sit there for a while and people aren't apt to start selling again. they are holding on to see where they will start buying. >> i thought nirvana would feel different. >> much better. >> yeah. >> you and you are not a fan. right at your college when you were in the quad there. >> yes. >> i bet you used to crank nirvana? >> play is on your cello. >> >> i played it on my cello, guy. >> cello. >> up next, moments ago the investment fund valueact ceo made some comments about the high-end consumer and where he's putting his money to go and leaked potential photos of apple's new iphone 7 causing a bit of a curious reaction among apple watchers and do have big implications for the stock. we'll explain, and later three major bank stocks have surged 50% off their low and a top
♪ ain't got time to make no apologies...♪ and ca"super food?" is that recommend sya real thing?cedar? it's a great school, but is it the right one for her? is this really any better than the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed? wealth management at charles schwab. woman:man: yes.a newspaper? woman: it's quaint. man: did you read about this latest cyber attack? woman: yeah, i read it on my watch. man: funny. woman: they took out the whole network.
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with the c.o.o. $19 billion investment fund valueact and spoke of one high-end consumer play. take a listen. >> the only high quality business that we have found in the last 12 months is rolls-royce which where the stock is down by half, as the earnings come down because they are putting more engines on wing and they lose money on the engine shipment but they are putting in place a 20-year recurring revenue stream in the aftermarket so from here to 2020 we think there's $6 billion of incremental market revenues available to rolls-royce and we think that the pricing is rational because really there's only two players now on the market. >> want to revise that a little bit because the rolls royce he makes reference to makes airplane engines. >> it's been a hot sector, but they have been sitting out so they haven't gotten a lot of contracts and the stock has consequently gotten killed
except valueact went on the board in early march. they are the an tut sis of "fast money." they will probably be here when the 20-year plan is over. looks expense i have to me. i'm not sure what will get them on track but value act has done a great job. >> yeah. >> in terms of some of the other large holdings, microsoft. >> microsoft has been great. >> yeah. >> that actually happened overnight almost. >> valeant is an interesting one, too. >> 15 million shears of valeant and adobe, 21st century fox, $24 million. >> you talked about hideout and microsoft is a great example. this company has been going absolutely perfect the way they have been moving themselves in the cloud and exactly where he came from. that's a direction they are moving and still trades an incredible multiple and have growth all be in the cloud which becomes a bigger portion and you get the yield. >> did valeant ever tried at a level where you thought it was a value stock? >> not yet. >> i mean, can you make an
argument right here it's value but you can also make a better argument that the headline risk associated with it is to good to trade from a side and what's new on the list is adobe which is a ridiculously volatile stock. a stock that goes up seemingly up and down ten minutes and did report on the 17th and if you catch a break on adobe and it sells off on that report like you've seen now for the last three years, you buy any weakness in adbe. >> obviously for a faster money trade i think microsoft is interesting right here because you have it close to the $50 breakout level which is now your support level. you get a dividend and it actually has done pretty well so it has moment mum behind it so for me if you want a fashion money trade buy it at 50. >> air suits off. >> come on for the big boy. >> just has a little window patch on it. >> selective coming off the suit. catch the entire interview right now on cnbc pro and hear what he thinks about american express
and valeant and up next drugs and pot is the next pot. yes, you heard that right. gw pharmaceuticals skyrocketing more than 120% following positive results of its cannabis-based drug which reduced seizures in chirp. take a listen to what was said about the drug earlier today on "power lunch." >> this is a momentous event for our company and for this product which is the most important clinical event in our company's history. it not only reinforces the potential for the drug in the fold of epilepsy but validates the potential of cannabinoid. >> and he talks about the cbc, the substance derived from the marijuana plant and also talked in the interview on meg on "power lunch" with the other applications for cbd and other drugs for other diseases like
multiple sclerosis. >> ms, yeah. >> they have an incredible pipeline. that's the interesting thing about a company like this and this brings you back to the old days. i first started on the trading floors, companies were waiting for that stock to get to market. they get to phase three and they fail and in this particular case they are getting to phase three and there's a chance to get approval. that's why everybody was after this stock and when you are looking at different areas they are focused on,ensy could be a big market and multiple sclerosis, of course, could be as well and cancer so they really are in the right spot. phase one, phase two, phase three in multiple different areas right now. very, very interesting. i don't think this stock is overpriced based upon what they have got in the pipeline right now. still has to get to market though. >> right. >> i mean, this -- does this prove that you need to do your homework? you can't say i'm not going to invest in biotech because the political overhang is too much. >> if you're buying ibb or xbi which are the two biotech etfs then i think the political overhang is too much and that you're making a sector call.
in this one particular case though, if you know this company very well like it sounds like pete does, i'm not making any comment particularly on what pete knows, i'm just saying that in this particular case you actually can make a lot of money show how would i trade this? between 80 and 90 today. threat trade for a week or so. this is going to be a long runway on this one. as long as it holds above 80ish, i think you're okay. >> that's a crap shoot. short covering here. pete may be right. i don't know. up 120%. clearly, nobody knew it well enough friday. >> right. >> to know that this is going to happen. >> not that we haven't seen the prices before. this was a $1130 stock this time last year. >> so to pete's point it isn't ridiculously expensive. >> it did trade 10 million shares to that that i wouldn't chase. >> still ahead, feeling left out of the recent rally. no need to fear. three stocks ready to play catchup in one of the most beaten down sectors this year.
we'll give you the names. i'm melissa lee and you're watching cnbc, first in business worldwide. meantime, here what else is coming up on "fast." that's what deutsche bank says will happen to the worldful get gets too hawkish by a top investor will tell you how to fed-proof your entire portfolio. >> plus. did you see that? it very well could be the first images of the iphone 7, and it's generating a curious investor reaction. we'll explain what it could mean for apple stock when "fast money" returns. manior
welcome back to "fast money." leaked images of what potentially could be the new iphone 7 indicate a slew of new design features from apple. cnbc's josh lipton is in san francisco with more on this. josh? >> well, melissa, 9:00 to 5:00 mac which published the photo says they had a case case that looks very much like the 6 and 6 tszs are curved backs and it does not look to confirm a hole with headphone jacks which would confirm rumors that apple is going to drop it in fever of
blue tooth. >> even though the headphone jack is really thin. it's the thickest piece of the phone today and by dropping it you can actually make the phone even thinner and as we've seen apple's prime objective. to put the maximum amounts of features and functionality into the smallest and thinnest form factor that they possibly can, which they feel can give them an advantage in the marketplace. >> if consumers still want to use the headphone jack they already have then they could sell a dongle allowing connection to the phone. more importantly though, additional images leaked yesterday now seem to show that the camera has changed for the iphone 7 as well with the size of the camera significantly larger than current models. we know the camera is a big point of competition with rivals such as samsung where viewers say that the new galaxy at seven boasts a good camera. this comes with a big caveat that we should treat these leaks
with a lot of caution and skepticism and asked about these images apple tells me it declines to comment on rumor or speculation, melissa. >> all right. what's the buzz here on all the new features? something worth upgrading for? >> buzz and hype, i was talking to piper's gene munster there and his take is there's more hype for the iphone 7 than the 6s and less than the 6 right now which would make sense. 6 obviously was a big dramatic change. having said that munster told me he's still excited about the 7 and estimates that iphone units will drop about 15% in march and gradually move back to flat line and finish the year back in positive territory. >> all right. josh lipton, thank you. who is excited about this new iphone. who thinks it's going to spur upgrades? i love apple but this isn't
coming out for months, right? >> have an event march 21st. >> i'm sorry, i'm sorry. i think we're going to see -- this happens before every release and every earnings. you have all kinds of channel checks. i don't know. i think the headphone jack thing, heard that before. sort of interesting. >> yeah. >> and, you know, you can see with the beats acquisition why they want to do that and get more locked into the ecosystem. >> sure, and the camera for that matter, too. >> the headphone jack part is probably the most interesting part about this. i don't know if it will spark a mass upgrade cycle and that's why for me apple has to close above 105 and probably on a weekly basis because 10 a 5 is a big level for apple. >> i wonder how much dongles they will sell. strangest word. anyway? >> i'm hoping -- i can't plug my beats into the new iphone? >> right. >> you don't have beats.
>> you need a dongle to do that. >> you want to go stocky on this thing? >> yeah. >> apparently intel has more of a presence in the new apple phone and maybe the stock is interesting here. qualcomm would be the loser here and qualcomm is now pushing up against a two-year downtrend, so maybe it's time to sell qualcomm and buy intel. how do you like them apples? >> a call that cirrus logic would be a beneficiary of that jack going away. >> which is pretty interesting because we know how tied cirrus is to apple already. you with a tonight talk about oil in the market. how about cirrus tied into apple for years now but interesting part is they want a smaller phone as well. i mean, apple is not trying to leave anything off to the side. going to the emergency market. >> the giant phone and tiny phone. >> right, and they are exactly targeting the emerging markets. not huge but 10 million to 20 million, not such a bad number per year, that's what they are talking about. >> and what kind of margins are
you going to get on an emerging market phone? >> probably not that great. >> i'll give you the campaign for the smaller known. get donald trump and his tiny little hands to talk about the -- perfect, genius! >> great point. >> i'm donald. i'll make america great again, brilliant. >> i'm definitely going to go to break now. >> just came to me. >> coming up, i'm not talking about any candidate's hands. >> coming up. is the market just one rail hike away from a total meltdown? one of the big banks says so, and it could have major implications and one trader is making a big bet that a hard hit airline is about to hit new heights. what has them so excited when "fast money" returns. you know, it's amazing how much information is contained in a single image. one visual can make or break a film. i am analyzing images for factory managers, sales people and healthcare professionals. that's good watson. but not exactly movie material.
here's what's coming up in the second half of "fast money." two days until the fed meeting. is the market just one right hike away from disaster? and one of the big banks is sounding the alarm. how worried should you be? we over got the details. airline stocks have gone almost nowhere and one named trade that is about to take off. what that is later this hour. time for a fakeout or breakout because with much of the market on the rebound -- i don't know what that noise was, what are many so. names that might be able to hold on to the recent gains? dom chu is in the newsroom with more. >> like a bull-ear, bull/bear. no idea. a lot of stocks have had a big rebound since the recent lows, and just how much has that shorter-term momentum done for the longer-term picture? we screened the 1,000 russel index and turns out 150 of the members have made new 52-week lows so far in 2016. of those, 75 stocks have bounced
by more than 50% from the lows just in 2016. among those, only six, believe it or not, just six have seen that positive momentum push performance positive for the past 12 months. in other words, they have gotten back a lot of the past performance and among them, can you see there, tes larks the electric car maker gained 50% since hitting a low of $141 and change on february 9th. up 7% over the course of the past year. then there's mid--scale retailer jc penney, a $6 stock back on january 20th. it's rallied 86% since and it puts its one--year return at nothing spectacular but still positive. 4%. it's not big, but still positive and then there's the energy stocks, right, many of which have been ripping higher. new field exploration in particular. the stock has been on a roller coaster ride and shares up 51% since february 19. they are now just about flat, maybe 2%, 3% positive for the past 12 months. traders will be trying to figure
out if the volatility continues given the wild swings we've seen in the last two months to a year and if it translates positively maybe some of the stocks have seen a turn for the better or just trading in between the big range. back over to you guys. >> thank you, dom chu. tesla is an interesting one and got an upgrade from bear and execution issues seem to be overblown at this point. they have actually seen model xs come off the production line. >> i would say 225 it fails. that's been the pivot level for quite some time. pete talked about this last week and questioned why is tesla rallied? look no further than -- >> oil. >> -- price of oil so if you think oil is topping out here, which i do, there's a real good chance that tesla could fade. i'm not saying it's going back to the levels that we saw a couple months ago, but i do think it will retest back down below 200 bucks. >> this could be a fakeout. >> is that what i'm supposed to say in answer to the question. >> fakeout. >> so, look at there. >> oh, i'm sorry.
fakeout. >> it's a game. >> yeah. >> you have two choices. >> right. >> all right. >> your thoughts on these stocks? >> you know, the energy ones that are up huge, that i just couldn't get on board, nor tesla either. i think energy does come a little bit. >> energy is ash -- >> a fakeout. >> play the game the right way. >> she's leading you. >> fakeout. >> i just wanted to make sure i got it right. fakeout. that's what i'm going for. i think 200, 220 to sell that. absolutely a fade. i like tesla for the very, very long term of the electric grid, not the fact that it's a car company. i have to buy 120. >> which one is a takeout? >> that's a whole different kind of game. >> fakeout, i agree with you guys. i mean, look at tesla, unless
you believe oil is continuing to the upside, if we see a break to the upside, i'm not so sure that i do. i'll tell you what last week or two, huge option activity in tesla and they were right, buying the april 230s, they doubled in a week and a half. unbelievable. i think this is it. you have to wait for this thing to pull back. >> sticking with rebounds here. financials have rallied sharply off their lows. hour next guest says there's more room to go and three very large names. let's go off the charts with carter worth of cornerstone macro. hey, carter. >> a catchup trade. we know what's caused the markets to rally. huge rallies in beaten down industrials, metal names, all sorts of retailers that were destroyed have come back and tip clip when you get to the end of a ricochet, we're up about 12% now, you get the last lag yards to come along and financials are the one group that have not come along. the year-to-date figures. you know the s&p is basically down a little bit, but of the ten sectors, financials, of course, worse, but then within the sector, the -- the regional banks down 8. you've got the big banks down 11
and broker/dealers, obviously names like morgan stanley down even more, so this spread to us based hon how much rebounding we've seen elsewhere in the market, we think this is going to narrow so as a pair trades against the s&p, on a two-year basis, you've got the s&p actually up 9% and you've got the financial sector itself, one of the parts composing the hole basically unch and here's the bank index, and that is spread with the s&p what we're eyeing here so i want to look at three stocks, but i want to do a short-term chart and a long-term chart and citigroup. it's a 30-minute chart only going back about 60 days but you have a well-defined head and shoulders bottom and you have a neck line and to my eye looks like we're going throw here and here is the long term. that's just the formation on an immediate basis. here it is on the same one-year chart so this thing that we looked at is the beginning of what should be the conclusion of
this matter. so morgan stanley, almost identical. again, on a minor formation basis, you can see it quite clearly. here's the neckline and here is the same on a one-year chart, so the setup is clear. here it is on the one-year and, again, a symmetrical move up gives you a pretty nice catchup. just exactly what many industrials and materials and finally bank of america, exact same setup and that's what's so important about f.here's the one-year chart. weave seen this from beaten down stocks all over the market. this is the last group that's lagged. we think that this is the end. ricochet so we would pair this against the s&p. >> i agree with carter for completely different reasons. we look at things very differently but what happened to citibank and bank of america, completely done overvaluations, haven't seen them like this in a long time. bought some recently and hasn't
worked, clearly in i don't know how long. hope springs eternal. i'm long. >> you mentioned, carter, some of the big banks and those banks had really been under pressure in terms of exposure to the energy sector. deutsche bank had been sort of under the same pressures except in much more mag night way and you actually advocated going short deutch. do the charts look different at this point? >> deutch is the most beaten up at all which means it has the most air to recover. let's all talk about a bearish rally. countertrend rallies are sharp in the market. just as they are in the markets and it doesn't change anything. something you can do if you have the ability to be do it relative to a market which has already ricochetted a lot. >> carter worth of cornerstone macro. >> still short deutsche bank. >> how does a short, select countertrend rally feel in. >> well, it doesn't feel fantastic. kind of like a stick in the eye. it's not great, but thankfully i've got them through options and i have a defined risk on that and at this point in time that's that's the way to play
it. i'm sure diet bank, credit suisse and ubs, could we get more of a real but then we sell them? >> do you think this is a short violent upward rally or do you think that's something longer? >> i'm long u.s. banks in general. i have some regional exposure as well as some of the big banks but i'm actually with you. i owned some puts in deutsche bank but i've been wrong. that stock, i thought it would continue lower and made a big bounceback of 5 or 6 bucks and because of limited risks i know exactly what is on the table. >> you made a good salient point, people taking the s.a.t.s, you might want to look at it, and that's crude oil and you think it's going to be higher. >> could it be a longer term countertrend rall? >> that's a whole different kettle of initial. >> but if the trend is higher oil. >> i think oil is going to stop here. >> he's also talking about doing it verse the s&p and i actually kind of like that idea, right? let's just say b.k. is wrong and how could that be? let's just say he's wrong about
the way the markets are going to go then the financials are going to rip. >> still ahead, the fed gearing up for one of its most important meetings. year and is janet yellen in hot water no matter what she says? why investors are show nervous, plus as oil sinks, it's taking one surprising group of stocks with it. what it is and why you want to steer clear. much more "fast money" ahead.
welcome back to "fast money." we're just to you days away from what will be the biggest fed decision of the year. in fact in, a note today deutsche bank hays a hawkish statement could reprice the whole market so are we really one rate hike away from hell? what should you do with your portfolio ahead of the fed? greg parsons joins us now. great to have you with us. >> great to be here. >> what do you think happens? >> look, i think, look, on certain volatility here to stay. there continues to be consternation around what the fed does or doesn't do. at least it's temporary. we focus on portions. market that frankly trade with a very limited sense of rates, specifically mortgage-backed securities so i think, look, volatility is here to stay and the market has rebounded quite strongly over the last few months so we don't have the same perspective and things will be
quite as dramatic as deutsche bank would think. >> if the fed is hawkish what do you think the markets will do because the broad consensus is that nothing is happening at this meeting? >> look, we're in line that in expectations, march, pretty transparent and tug-of-war going on in the world versus the rest of the world and expect them to raise rates once or twice over the next few months and it will be act in the immediate term pretty violently and if the fed raised in march but don't expect that to happen. >> so in terms of the one thing you mentioned that you trade a lot them backed securities and that's kind of an illiquid bond market and what are you seeing from that perspective, hoy-yield sector because that's the segment that led the turbulence in the stock market? are you seeing liquidity issues in some of the bond markets that you trade in? >> well, i think, right, we view mortgage as a substantive idea. two fundamentally different asset classes. in the mortgage market, continued improvement of things that drive collateral values.
income continues to strength-in and as a result you're seeing a lot of attractive opportunities and continued stability in mortgages. high yield trades with a little bit more kind of direct exposure to the markets at large, and you've got to be in the right names, but at least up until now no real liquidity concerns. >> let me ask to our nirvana point for you. what's nirvana for you, an economy meeting up a little bit and heat rises or nothing from the fed? what's the best case? >> if you believe that the fed rising rates implies that the fed is looking at the economy and believes the economy is continuing to strengthen. that's our version of nirvana. what we would like to see is continued again, home price appreciation, job growth and economic stability within the u.s., so if you believe that the fed is staring at that and weighing that into their decision and that's the reason they are raising rates, that's a good scenario. >> is that your belief though, if the fed does raise one to two times as you expect, you think that's going to be because of a growing economy or an economy
doing okay as opposed to, you know what, if they don't do it they will be painted into a corner and if something bad happens they won't have other options. >> more of the first. have their eye of what's going on in the u.s. and the implication of downstream of raising so they will only raise if things are stable here. >> concerned about other central banks making missteps now, bank of japan, people's bank of china, those types of things? >> on the periphery aware of what goes on in other markets and we're more aware of what's going on here. >> we're going to leave it there. thanks a lot for joining us. >> appreciate it. >> >> what do you expect into the fed meeting? >> i would expect more volatility than right now. greg mentioned volatility twice in the first minute when he was sitting here and i'm always looking at volatility and talking about volatility and locking at the 16s and the lower end right now. you've got to own some volatility here and protect your positions. had a dramatic run, energy in
the desk for trash or the run of financials as of late. you've got to protect yourself on the lower end of volatility. >> what's cheaper for volatility, calls in the bank or some of the s&p puts? >> probably looking at a prodder portfolio and can probably get the full hedge that you're looking for. if the calls are inexpensive, i'm all over them, bank of america, citi, you name them, i'll jump ton. >> still ahead, stocks getting put in the dark and something in the market is change and could be good news for solar. and one airline stock that is about to soar. why investors are betting on a big trade this month. that's next. you're watching "fast money" on cnbc, first in business worldwide. this are six degrees accept rate you from make money in this market. a half dozen businesses are set to outperform the rest of wall
welcome back to "fast money." i'm morgan brennan. with oil prices back below $40 a barrel that has pressured solar stocks. just take a look at the three-month charge of the gunk heim versus west texas crude. why? oil has stoked fears that demands for solar will wane as other energy sources stay cheaper for longer and analysts say those worries have been
misplaced. there's been a rotation in the investor base from tech to more energy investors with a bias towards oil and gas piling into the sector. he says that's contributing to this psychological connection, but that it's also key to remember oil doesn't actually compete with soil solar for power generation in this country so he has outperform ratings on sun power and canadian solar, and he also likes first solar heading into that company's april 5th analyst date. melissa, back to you. >> solar stocks have been on fire. do we take a look at this? guy, i know you've been a proponent of sun power. >> up again today. to the point morgan just made, the same point we're making about energy. if you're bullish crude, then you should continue to be bullish the solar stocks. i think crude is going to top out here. with that said i still think sun power's room to the upside, contradicting myself a little bit and validation is cheap and there's a huge short interest and if you want to pick one name in the space it's wspwr.
>> solar city has had quite a run, up 55% over the last couple of months and rumors that elon musk was going to take it -- didn't go anywhere but the stock is seeing a nice bid. >> if i'm going into a space the only other name i like better is first solar. i like that from a valuation perspective and not learninged like a lot of various names in the solar world are. i think that name some day could be a takeout for some big industrial under the right situation. >> delta surging 11% in the next month and one stock that's about to take off to new heights. mike coe is breaking down all the action. >> delta airlines, saw more than three times the average daily call volume today, and it looks like someone is pressing a fairly substantial bullish bet and 48.5 calls out to april and spending about $1.40 and bullish belts that delta will be up 5% or more by april expiration and an important note for investors
is this should capture their next scheduled earnings release coming up in the second week of april so given how violently the stock has moved around, if you're inclined to make bullish bets, buyers like this still makes sense. >> do like delta. >> go over there? >> i thought what mike was talking about today as well and that was massive and because of that i jumped in it but i was already in it. i rolled out and grabbed a little time and went out to april like mike was talk being about. i think the names are still cheap and haven't reacted the way they should with you i'm in all three, american, delta and ual. >> for more "options action," thank you, my, by the way. check out full show at 5:30 p.m. eastern time on friday. coming up on "mad money," can r.r. donnelly turn a page for profits as the company prepares for a big breakout, and which six groups could cbs winning? that next on "fast money" and more on the final trade. maas
there's six degrees separating you from making money in this market. a half dozen businesses are set to outperform the rest of wall street is coming up. plus, the old school printer reborn as a digital power player. a little fast but not least. a new space probe could finally solve the scientific mystery of whether life exists on mars. europe and russia just launched a joint mission searching for methane and other atmospheric
gases which could get to the bottom of martian life. this mission could bring humans one step closer to flying to the red planet. which i know guy has always wanted to do. >> i'm in. let's go. beam me up, scotty. >> how do you know they even went? >> completely cgi. >> how is the flag waving for instance snrs. >> right. >> time for the final trade. let's go around the horn, pete? >> just about a week and a half, red hot buyers, stock was trading around 65, now 22, time to get out. i'm out. giddy-up. >> b.k. yes? >> looked at the headline. market was basically flood and autonation down 2.5, upticks on subprime autos, sell this one. >> chairwoman? >> we talked two weeks ago about wynn, steve wynn, made some huge purchases and came out with great earnings. more room to run. pete has been all over it, guy, too. excellent call, wynn. >> you're a buyer of wynn, wow. >> happy pi day.
happy birthday tim adami and whole foods markets. lots happening in the space, wfm. >> all right. i'm melissa lee. thanks so much for watching. see you back here tomorrow at 5:00 for more 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 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. there is always something brewing underneath. even when a seemingly sedate day when the dow edged up 16, s&p