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tv   Fast Money  CNBC  April 6, 2016 5:00pm-6:01pm EDT

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over money starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. traders on the desk, peter narnlgage, brian kelly, dan nathan and guy adami. debt at the highest levels since the start of the financial crisis which could spell more gains ahead and we'll explain and give you three stocks that are poised to take this market even higher. one of the biggest deals of all time is now dead so why are biotech stocks surging today? we've got the answer and later something unprecedented is happening in the global markets, d it could signal the next great trade. we'll tell you what that is and how you can make money right now, but, first, we start off with the markets, stocks seeing their best day in nearly a month
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soaring on the heels of more dovish rhetoric from the fed. large cap tech, staples, deschristianry, all moving higher and are the bears ready to surrender? we kick it off with our biggest bear. brian kelly, what do you say? >> not ready to surrender at all. simple stuff, since june of 2015, almost a year ago selling the r.i.p.s has worked for the strategy and buying the dips has worked and transports, one of the leaders on the market on the way up. financials really lagged today and when i look at the bigger big. i look over in europe and look over in japan and those markets, the nikkei and dax have diverged massively so when i look at the s&p 500 i look at it as the last man standing and it scares me up at these levels. corporate earnings are falling and not a place i want to chase this market at all.
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in fact, i want to be selling the rips like you have been doing since june of 2015. >> second biggest bear on the desk, what do you say? >> here's the thing, everything what brian just said makes sense. we're in an environment that reminds us very much of 2014, 2013 where interest rates were really low. the fed was really dovish, you know, and it just didn't seem like interest rates were going anywhere so what did you do. you bought stocks. i'm with brian though that to me the s&p 500 is the last man standing, and when you think about what's going on since last may, since the highs at 2135 we've made two consecutive lower mys and to me there was something that really spooked me back in february. we did this for the first time since 2008. the s&p made a lower low, and that was what happened at 1800 so if we get rejected here we're going back to 1800 and who knows what lies beneath? >> could it be we're in a goldilocks kind of-year when it comes to fed policy?
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don't make fun of me. when it comes to fed policy, we know she will be on the sidelines, janet yellen will be on sidelines for the first half of the year and then also we have perhaps a bid to safety going on because people don't necessarily want to be in global stocks right now. they want to be in the best house on the bad block and that's the united states. >> that's absolutely been the argument for quite some time. you mentioned this i think last week. does the market give you a long time to sell the high and the answer was pretty much a resounding no. it doesn't. it typically does not allow you to sell the highs and here we are within a couple of percent of the all-time highs for quite some time. i do agree with what brian said. definitely head winds in terms of global economy. the fed has said they have come out and said that they have fears about the global economy. meantime, the s&p continues to grind higher. i thought we would fail about 50 handles ago, 2025. here we are 2070 or so, got back all of yesterday's losses on the back of a strong crude oil market that by the way i think is toppy here but we'll see.
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i agree the transports have now been lagging for the last two weeks, but you know what, you can't deny the fact that the s&p has been resilient. >> this is the tape that we have to trade right now. >> what do we trade as we're seeing technology take off and the nasdaq at 2016 closing highs right now. >> the majority of the technology names are the ones i like the most. financials are lagging and are lagging for all the right reasons and when you look at the interest rate environment, the doves and everything people have brought up on the desk, i think there's some numbers out there that gives us a reason to have a little bit more bullishness. numbers out of the china not all that bad. this is the best house. no doubt about it. we've been saying it on the desk and you look at the european banks, that's concerning to me. i look at deutsche bank and credit suisse and barclays. they look terrible and are trading near the lows and can't get out of their own ways and our financials have really lagged significantly. >> so you like technology. >> i like technology and biotech
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is a dash for trash. >> you don't love this rally. >> i love those names and have said it a million times and the political environment makes those names very, very difficult and because everybody has been trashing them there's going to be some hiccups here or there and i should say some areas where we goat those things to move at accelerated pace like today. i don't know if that's sustainable. >> what's your trade given your perception of the market? >> if you want to be real simple, would i sell the s&p 500, spy. do it via options. that would be a good way to define your risk. the one thing that i would say that i think everybody is missing, i don't think the fed is on hold through the rest of the year or through the first half. year, they didn't say that at all. half of them wanted to raise rates. a good service ism last week and inflation somewhere close -- >> you're reading a possible raise in april as bad news as opposed to -- >> absolutely. >> as opposed to a read on the economy that's good enough to raise rates so we're going to raise rates. >> yes, absolutely. >> all right. >> look what happened in december. look what happened when they
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raised rates in december. first of all, i think if the fed raised rates, the december rate was a huge mistake. if they do it again it will be another massive mistake. >> i'll go the other way. i don't think there's any way, they had to raise in december because they jawboned about it for so long, had to do something and doesn't matter what the rest of the fed officials say. matters what janet yellen says, and i think she's terrified to make a move and i wouldn't be surprise federal there's only one move the rest of the year and that came in december. >> and it's completely mental that we're actually debating this right now. fed fund futures at 25 to 50 basis points seven years, thought the end of qe and end of zerp would be a new dawn and the markets can't enjoy it and that's the thing. we're debating whether the june meeting is live or december or whatever. that sort of uncertainty is probably the thing that makes stocks fail at some point. >> what are you doing? >> listen, i'm trying to fold out a little bit and here's the one thing. the one thing that would change my mind and throw the towel if
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the breaks started to go despite the pact that rates >> and we could see the raise. >> i heard you say on this network the dimon bottom, which to me is pretty good. >> holding pretty good. >> except for the fact that it's underperformed the s&p 500 since the dimon bottom so to me it doesn't act particularly well. >> we didn't say acceleration and it would fly up to the upside. all we said was a bottom. how about the steve wynn bottom as well. >> basically an embedded put in the financials right now because of where jamie dimon bought the stock. >> essentially, yes. >> i wouldn't bet on that put at all. >> holding up pretty good. >> a week or a month. he bought it a month ago, come on! >> the buyback -- >> i think you put too much faith on that. >> why did they announce that buyback? >> because they have confidence in their own stock. >> they can't make money elsewhere, come on! come on! >> you don't necessarily agree that financials are going to rip
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higher and you don't either so somewhere you meet in the middle here. >> it would start to freak me out a little bit if this was a sector that started to participate. >> a quite spinal tap song about bottoms. >> and the thing where we go -- >> yeah, to one bear who might be changing her tune in 2016, a bank of america and merrill lynch and head of u.s. strategy and strategy. i'm a bear? >> 2,000 targets. >> year over year doesn't look great, but i also think that the relative call on the s&p is easy to make. i think the s&p 500 is going to outperform every other equity benchmark there is. it's going to outperform small caps, rest of world, emerging markets, you name it. i think the s&p is the best place to be. whether or not it outperforms cash is the big question. >> yeah. >> that seems crazy, to have the bank of america, head of come on and say, you know, it's a tossup between s&p 500 and just having cold hard cash.
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>> well, yeah. it is, it's a weird market, but think about what's going on right now. we've got the fed hiking into a profits recession. i mean, first-quarter profits year over year are going to be our forecast is minus 5%. the street's forecast minus 8% year over year growth in s&p earnings. this is bad. i mean, that's not an environment where you want capital to be constricting rather than expanding, so i think that that's the sort of risky setup that you've got the credit markets might be telling us something is wrong. i do think though that u.s. large cap high-quality companies are where you want to be from a risk -- from a risk standpoint, so, you know, the opportunities to buy the s&p for the long term i think are there. our ten-year target is pretty bullish. we've got at 3,500 target on the s&p over the next ten years so i think, you know, for my son's college fund i'm in stocks, but i think there's going to be a little volatility over the next year or two. >> speak to us though about the interest rate environment that you're talking about relative to the s&p. we know that you're telling us four quarters in a row, first
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time this has happened since 2009 that s&p earnings are going to decline. companies have been buying back their stock hand over fist. isn't this a real problem here? can you imagine what companies would be doing -- what earnings would look like if we didn't have rates where they were and buybacks as such a percentage of earnings? >> i think buybacks have been a pretty big force. the numbers tell you that the buybacks haven't propped up the market, like maybe 5% of the bull market that we've seen over the last what, is it, seven years have been driven by corporate buybacks. the rest is just normal, you know, multiple expansion, earnings growth, all the other stuff that normally drives the market higher, but i think what's scary right now is the sources of alpha that we've seen over the last couple of years have been special situations, to your points, buybacks, m & as, shareholder activism and all of these different weird sources of ampa that we've seen and they
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are all starting to fade and one thing i've found interesting is stocks that are spinning out divisions, they were outperforming because it's a catalyst for unlocking value and companies with shareholder activists in place were outperforming because there's like a change that's coming and now they are underperforming so i think we're back to a normal market environment where investors just want growth. we want normal plain vanilla organic growth and it's tough to find right now. i mean, it's very difficult to find a company that's actually growing its top line to your point so that's why i'm a little bit leery of the near term prospects. do i think we get better by the end of the year, so i think that we lap a lot of the bad effects that we're currently involved in. for example, lower oil prize, things get better rather than worse. strong dollar, lap the huge strong dollar cycle that we've been in and people get better thanners and my favorite place to be in this earnings season is multi-nationals. you'll see a lot more mstive surprises in that segment.
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the dollar actually weakened in the first quarter rather than strengthened which is a surprise to a lot of us so that could be an area of relative strength. >> okay. great to see you. >> thanks, great to be here. >> guy? >> the question comes down to what is the right multiple for the s&p and the environment that we find ourselves in globally? 120 is what they are going to earn, that makes the s&p about a 17.5% multiple. is that right given the environment? if you think it's right have a party. if you think we're slowing what's the right multiple? >> and what is the right earnings? 120 earnings, corporate earnings for this quarter, corporate profits being down year over year so 120 might not even be right so put 100 on it. put 100 on it pand the 17 multiple you've got a lower stock market. >> i want to go back to you with the cash tossup with the s&p 500 so you are the one that said at one point in time cash would be better. >> i still think it would be better. if you're -- let me be clear. if you are not an angstive
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trader and you have significant profits from the bottom of 2009 there is nothing wrong with being in cash right now. now, i think it's important to make the distinction and savida made the point that the s&ps could underperform cash. that means it could go down 5% and the rest of the market will be down 10%, 20% and the rest of the market could be down which would mean it had a relative outperformance. up next, one group of stocks that saw its best day in six months and we told you how to play the space just two days ago. the name and whether there's time to get in. this guy with his thoughts on the tesla stock and a rally in jeopardy here in the united states? we'll tell you what it is and how you can profit when "fast money" returns. money retirement squirrel from voya. we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person?
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more of a spokes metaphor. get organized at
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show show me more like this. s. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go online and switch to x1. only with xfinity. welcome back to "fast money" with a news alert on sprint. the wireless carrier has entered into a transaction with several bankruptcy remote entities for the sale and lease back of certain assets providing the company with $2.2 billion of funding. the cfo of the company says this transaction is an important
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first step in addressing upcoming debt maturities which is likely part of the wireless carrier's longer term restructuring and turnaround. melissa, looking at the stock up about 2.8% after hours. >> seema mody, thank you. sprint, dan. you've traded this in the past? >> yeah, it's a tough one here. the debt maturities coming due, 33 billion in debt. it's important to remember that softbank owns 83% of this. this thing is not going anywhere. they are going to get their house in order and it's better the united states needs more major carriers and when you have ricky gervais calling your network rubbish, may want to stay out of that. >> he's a race car driver. >> bingo. well done. let's move on. i hope ricky gervais is watching. i really do. tesla kicking off our top trades, the stock soaring hitting a six-month high and take a look at this, musk
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responding to a tweet to what he would say to someone who is shorting tesla. musk's response probably unwise and we did more digging. if you look back at eamon's famous tweets nearly every single one sent tesla stock higher. when musk said it was time to unveil the "d" and something else he added more than $2 billion in market company to the stock within the next five days and we should point out back in 2013 musk made the comment that he thought it's la was overvalued. dan? >> i've been wrong on this one for a week and kind of threw in the towel today and elon musk owns 22% of the shares and he buys on every deal they have basically ever done and will probably never sell stock and then you have 33% short interest so you have a really difficult scenario if you're trying to be short here. i'm down, you know, at some point very soon it gets back to the prior highs and the car is not going to be delivered until 218 in mass shipments so to me
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you're really buying this thing on a hope and a prayer. >> if you've been a short in tesla stock you've just been squeezed like you're squeezed in a vice and at the same time barclays today is saying perhaps with the popularity of all the three and all these orders coming in they might have to do a capital raise of $3 billion in the third quarter of this year. >> if you get caught short in tesla, that's your bet because that's the stock that went from 230 down to 140 in a four or five-week period so i'm not certain what more you were looking for. >> guy, you could have shorted the stock on friday at 230, 265. >> you had an opportunity to be short and make money in this stock, absolutely. now i thought it would fail at 225 and now here we are some $40 later. what's the point? well, 285 and dan was saying was a double top. it won't fail the third time so it's make or break for tesla. >> don't forget citron. >> what did you think of that
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research report? that was a little flimsy. >> i think the biggest problem right now, what they are dealing with now is production. obviously they announced out that they were coming short on the production numbers already, and now when you look at what the three and some of those numbers, 300,000 sdwlsh how are they possibly going to keep up with those numbers, i don't know that they can, something good about having a supply problem with the demand. >> next up, a huge day for biotech stocks. take a look at the nasdaq biotech etf, ivb logging its best day since 2009 and if you listened to "fast money" this monday you would have been ahead of this real. take a listen. >> what we're playing for here is some catchup on the part of ibb relative to the s&p 500. heim making the bet that this is going to continue to exceed the tops and so ibb for outperformance relative to the s&p to be continued. >> you said earlier it's a dash for trash that we're seeing at play right now. >> maybe some technical is
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coming into play. i've talked about it for a long time and how inexpensive they are and i said in this political environment that they are in they are very dangerous and very toxic and obviously it's not just hillary. i think you're seeing it on both sides quite frankly that's gone after this industry and because of that because these are all trades i don't think they are investments. big pharm you have comfort but the big biotechs are very, very difficult. >> sell the biotechs into the election until afterwards for what pete was talking about it. carter made a phenomenal call, relative value trade, doing that all year long but it's a trade only. >> still ahead, something unprecedented that's happening in global marks and it could signal a major inflection point for stocks here. what that is and how you can profit. i'm melissa lee. you're watching "fast money," first in business worldwide. here what else is coming up on "fast." >>ing aer jen, every analyst will be talking about it, agn is too cheap at 225.
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>> since then shares are up 8% and now guy has an even bolder call on the stock. he'll reveal. plus, here's what happens when you bet against stocks. ♪ everybody was kung fu fighting ♪ >> and it could explain why the market is going higher. we'll tell you how you can profit from all of that when "fast money" returns.
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welcome back to "fast money." u.s. stokes are on fire. euro stocks not so much. dana, great to see you. >> good to see you. thanks for having me. >> seems like there's one chart in particular that's really concerning to you when it comes to this divergence. >> yeah. when you look at the specifically the rally off of the mid february lee, you see a pretty stellar rally globally, centered mostly in the u.s. and reaching pockets around the world, conspicuously lagging is the region of europe, and while we did get a mean reversion bounce for a few weeks in the european indexes, over the last few weeks we've seen the indexes
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begin to roll over again pretty much continentwide so it's concerning to see that again. >> show how do you use this information, dana? is your assumption that the s&p 500 should move lower to meet overseas stocks or vise versa. >> so what we like to do is we're trend followers. from the long side we like to focus on relative strength so from that perfective, the message is pretty simple. we want to avoid europe, at least from the long side so we're going to focus on the areas that have been leading the real, and once again like it's been for several years except for a brief moment in early 2015 europe is a place to avoid right now. >> dana, it's brian kelly. you've seen the europe and the knee say underperform the s&p 500 so it's paid to fight both the boj and the ecb. based on this, is it time to
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fight the fed? >> again, price would tell us otherwise so we're going to follow whatever areas the markets and regions around the world are leading, and right now that's the u.s., so we're going to stick with that, especially the defensive sectors that have been leading the real, and we're going to avoid areas like europe and for the time being japan and we're not try to pick the -- those mean reversion trades and catch the falling knives so right now we're falling price and it's the u.s., not the other areas in the world. >> got it. >> dana, thanks for your time. got it. >> you take it one step further in that you are actually short some. european stocks. >> yeah, short the europea banks and still short deutsche bank, cs, you know. also you can be short commodities. i think what you're looking at here. i think the s&p converges down to the nikkei and down to the dax, and if you take that and
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say, okay the s&p is going to be trading hat levels that the dax is trading at, it's not outrageous to see that. other markets are dax low. >> i know crude had a pretty good run. deutsche bank has been trading as if there's another leg lower in crude so actually deutsche bank won't up as much as it should have been. it's within a buck i think of the a 52-week low so i think dutch bank is telling you there's another leg lower. >> not just the european banks. we'll see that in u.s. bank earnings and particularly the regional banks which have more exposure as a percentage of their total portfolio. >> you would certainly expect to see that as well. to guy's point, deutsche bank, i was short that and actually long puts and that was my shortstop i've taken that off. i think it's milked itself down a lot and we'll see more of a pause over there and then maybe we'll see it work to the upside and there could still be some
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downside. >> coming up are three of the most hated stocks in the market about to take off in the charts you need to see and how can you get in on the acts and later energy stocks are surging with one name particular clocking in as the best performing stock in the s&p 500 today and traders are betting it's about to see even more gains ahead. we'll tell you what that is when "fast money" returns. all about seizing opportunity.
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welcome back toe "fast money." the dow is rallying triple digits while the s&p 500 jumped 1%. health care and energy the clear leaders in today's session, jumping more than 2%. here what is coming up in the second half of "fast money." one oil stock traders are betting is about to soar after the justice department made a surprising move today. we'll explain. plus a tough week for allergen as its deal with pfizer is officially called off and what the ceo said on cnbc that had a whole street talking. comments later and first we start off with the market and believe it or not despite the recent rally bets against the market are surging.
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dom chu is back with the story. hey, dom. >> one thing on raid ears across the market is short interest in stocks. in other words, to what difference traders are borrowing to sell hoping for lower prices down the line. the amount of short interest in the u.s. stock market is at the highest level seen since september of 2008 and stands around 4.8 boston and a percentage of total shares. now, it was higher also than it was back in march of 2009 during the market lows of the market crisis. by his calculations it means there's nearly $1 trillion worth of stocks borrowed and shorts. traders take profits or stop losses on these positions by buying back stocks to repay their shares that they borrowed to begin were. lee notes during the six months between marched a september of 2009 short interest fell by
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about .9% and the stock market rallied by 50%, so, melissa, it's a bit contrarian here but he makes the case that this kind of short interest could provide fuel for the upside move for stocks in this coming quarter, and that's something that you can at least pay attention to for the time being. back over to you guys, melissa. >> thanks so much, dom chew in the newsroom. speaking of short interest, let's go to rich ross of evercorpisi. we're going off the charts. what do you see? >> first things first, about the last segment, short interest on the s&p highest since september of 2008. from september of 2008 to march 2009 the market fell about 40% so let's just be clear about that. in terms of high short interest on individual stocks what we have sheer that potential contrarian buy signal and a good combination of strong stock charts. darden restaurants, where is all
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that money saved on low gas prize, into savings, health care and restaurants like darden. this is a stock near an all-time high. not that many near an all-time high. we have a seven or eight-month base of support. strong relative strength into that recivilins at the all-time high. i think the short interest gives that you fuel that we're talking about. next chart here, under armour. what do we see here? a stock that's fallen 2%. steph curry, the triangle offense, a continuation pattern to the upside. we should break out this, 200-day moving average and break above resistance takes us above the 200-day. that's a very bullish potential catalyst here. masters this weekend, maybe jordan spieth takes the green jacket. you'll see the under armour logo all weekend and finally century link, what's the best performing sector in the s&p on a year-to-date basis, telecom, century link, a telecom company. the stock got crushed 40 down to 20 and impulsive move above the
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low and we have a nice continuation pattern. you should see a move to the upside if the technicals work so those are three stocks, high short interest with strong short interest i think it can go higher. >> let me ask you this, rich, because we always have a debate in terms of short interest fueling another leg higher. is that sort of rally, i don't know, less impressive than one that's not driven by a short covering? >> well, melissa, to stay with the golf metaphor, no pictures on the scorecard. when you go to settle your trades cash is cash so i don't think there's a difference between an impressive rally and unimpressive rally and it's a cheeky strategy based solely to buy something. we've identified our three stock charts to buy in isolation. i'm a trade. i don't care how a stock goes up or why it goes up. higher is good when i've bought it lower. >> got ross, evercorpisi.
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>> no pictures on "squawk" and if you shank your drive. >> like i'm going to understand that. >> and it lands in the fairway. if you par the hole, nobody knows that you hit the tree. all that shows up on the thing is the par, that's the point. that's a trade school, by the way. >> got it. >> darden report, a pretty good corn ker, off a pre-announced quarter a couple days higher. comps were very good and 11% short interest and a name that could rally from here. >> i wish i had dom a chance to ask a question on the great hit. >> he had to go. >> i understand. >> the thing that's understanding about the s&p 500 or the broad u.s. market is we're coming off of seven years of zerp and the fed balance sheet has expanded by $4 trillion and what's different this time, that's what's different this time. >> look at these short interest indicators and look at commitment of traders and look at the futures and anything. the one thing, i look at them to say okay where is the sentiment but i would caution you, you don't know what the other sides
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of the trades r.short interest is very high. this could be long short hedge funds matching and bearing off positions again. it is an indicator of sentiment, but i would not make a trading call out of it. >> i think the most important thing we heard from ruch is you would buy the names and the three he put up there in isolati isolation. that just built into the whole theory and talked about dash for trash and a lot of energy names and the huge move and the spike we had seen out of energy peelers and some of the names far overdone quite frankly and i think there are some names and you look at them in isolation and when you look at the growth potential you see in that company, whether it's the shoes or going towards women, there's all kinds of different reasons why it makes a lot of sense right now on a name like that. >> and steph curry. >> and steph kurie. >> and jordan spieth. >> golden state warriors. >> what happened last night? >> lost to the t'wolves. >> to the t'wolves of minnesota. >> i knew that. >> how many field goals? >> young guns.
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>> oblong ball through -- yeah. >> still ahead, allergen taking a hit as its deal with phizer is officially over. the trade verse a few ideas about who the company could be buying next. they will reveal that after the break and steve wynn making comments about china in a private conversation he had with disney's ceo bob iger. what did he say? we'll hear from him after the break. much more "fast money" ahead.
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allergen has always been a growth company and the companies you mention. some are growth oriented and others are not. everything that is a growth oriented business with strong fundamental businesses and a good r & d pipeline to sustain that growth is of interest to us. >> a question of whether the company would go shopping for the likes of celgene and valeant now that its deal with phizer is off the table. we thought we'd plate allergen dating game. contestant number one, peter
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najarian, he just prefers long walks in the option pit. bachelor number two, brian kelly loves mass chaos, financial destruction and bitcoin and he just cashed out of his 401(k) so, ladies, dinner is on him and bachelor number three is founder of and dan nathan knows how to straddle a trade and our fourth bachelor is guy adam, many ladies call him the godfather because he's known to make an offer you can't refuse. pete, kick it off with you. >> i'm going with biogen. looking for growth, talk about growth pharma, that's why he's looking at this particular name. the ms franchise and the fact that they are in the hemophilia, huge growth there as well, look the at the ref niece and earnings growth, the real key, they are very bottom. alzheimer's. they have a drug in late stage for alzheimer's, could be very huge. >> work on your penmanship. brian kelly, who should allergen
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buy? >> boston scientific, bsx, growth area, demographics support this that the medical surgical area. that's going to be a growth driver and look at the stock. it's been on an absolute tear and a relatively small bite compared to the others. >> best mate for allergen? >> interesting. >> here's way. they will be selling their again rings business to tiva and they will get $30 billion in cash. this is a company that has over $35 billion in debt. i think they should buying back their stock which would be creative in paying down debt. think of what just happened to valeant they accumulated a lot of debt over many years and saw the stock price gain the way allergen has. i think they want to get that leverage ratio down and buy back their stock. >> so bachelor number three says stay single. >> guy adam? >> good to be on your show. jazz pharmaceuticals and you say
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why? >> why? >> that's a great question. glad you asked. >> thank you. >> watched "squawk box" in the morning with beck and joe and andrew sorkin and ariana huffington talking about sleep disorder, guess what these guys work on, $8 billion market cap, fair valuation. stock performed well today. many other people are thinking the same thing. jazz, not the hands, the stocks. >> wow. >> oh, my good. >> jazzy hands, i like how you fold that in. cowan had had a note out earlier saying what could allergen do with the teva pharmaceuticals, only this stock was named. >> which means these ones are undervalued. >> yeah. >> this name is way oversold and this is a name they looked at a year ago. >> it's a $60 billion market cap. would have to get -- >> all of a sudden they are -- obviously it would be a cash stock. >> isn't it time to take on debt with interest rates and mr mr. zerp?
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>> yeah. >> i would just say it would depend on what growth. it's a big rollup. >> if you folks like hang man at home the most difficult word to guess in hang man is jazz. want to play hangman. >> because of the "j" and "zs." >> jazz, just remember that. >> that's a -- genius. >> the more you know. >> steve wynn speaking at the wynn investor conference heading higher after hours, more about the quarter, his health and more of the conversation with disney's bob iger. you're watching cnbc, first in business worldwide. recommend synthetic over cedar?u "super food?" is that a real thing? 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...
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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.
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welcome back to "fast money." news on wynn. seema mody is here with the more. >> reporter: a short presentation kicking off a short time. chairman and ceo steve wynn on the call defending his latest bet on china, the wynn palace casino stoat open this sumner macaw. wynn is saying he's not the only one who is optimistic about
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growth in china. >> yesterday, i talked to bob iger, the chairman who is a friend of mine, and a chairman of disney, as you all know and bob and i were talking. he's hoping in we're thinking of 8/8, sort of lick numbers, and his view of van and ours are the same. we're very up and positive about the long side in china and you have to have patience and perspective to get through the short term. wynn is on the call walking investors through his vision and plan for las vegas and boston saying it's the first time in 40 years they have sought to bring investors into this kind of thing and oaks vagss that go on in the board room. shares are up about 2.4% after hours. melissa? >> thanks, seema mody. >> and that conference call is always entertaining and sometimes you hear his dog in the background and sometimes you
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get curse words, always very colorful. you mentioned though his purchase though of stock. when was it? >> 2 million shares worth. in a period of time, december and the early part of the year. average price about $60 and now you're looking at a $9 stock. just had disappointing guidance and today it was down a couple dollars and getting right back there now. when you look at the reaction in the post-market. right back where it was last night and we'll have to see if that continues and he talked about bob iger as well. talk about two guys who are committed and very, very impressed. when you talk about looking for right managers, these guys are right up there with the very best. >> it's interesting that he made a distinction between the long-term outlook and the very short term and if you're running a company like this, takes several years, have to look out ten, 20 years and given the choice between whether or not jamie dimon's bottom is goes to cold or steve wynn's bottom is going to hold, much rather be in
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the area. >> steve wynn's bottom, jamie dimon's bottom. >> i don't know how to recover from that. >> just trade. >> so, listen, there is no easy money, number one, but when he was buying stock in the '60s, we talked about playing on the desk, go with steve wynn. got to 100 and change and last week, really when we had the appropriate to us drop-off from last year mid-summer. >> right. >> i think you've got to be taking profits at these levels. >> let's move on to the energy space, the doj is suing to block baker hughes. it set off a flurry o bullish bets. dan nathan is here with the latest. >> reporter: options volumes were three times average daily volumes and one bullish trade that caught my eye in particular when the stock was 42.5, a trade rolled up and out a bullish -- previous bullish bet in may expir and selling the 142 calls
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and buying 1,000 of the may 45 calls for $2.86. they break even at 48.86 and up from the trading levels on pray expiration and what's really interesting about this trade to me, it's not a huge size. the premiums are very elevated. we'll goat that, but look at how the stock opened this morning. it actually opened down on the day just a few% from the 52-week and four-year highs and quickly went up and stayed up all day long. one of the reasons there is an expected $3.5 billion break-up fee if this deal doesn't happen. that's close to 20% of the stock's current market capitalization. there's kind of an embedded put in there if you think about it that way. here's the one-year chart and look at the downtrend. very systematic here. these puts would break even above the downtrend line and the last thing about the premium, options prices are very high and spreads are very wide. a very difficult name to trade
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in, a lot of risk people there and probably not the way i want to play it. want to be long baker hughes, sell upside calls against the money against it and take a little yield and benefit from the high premiums. >> full show 5:30 p.m. eastern time on friday. let's get back to seema mody. breaking news on jpmorgan. seema? >> jamie dimon's letter is out. jamie dimon's letter to shareholders, an extensive letter of 50 pages. some of the highlights include jamie dimon saying he's not proud of our share performance and not worried about negative rates or diverging rate policies and extensively defending large banks and small banks saying that we need them both, large, global, corporate and vest banks do things that's regional and community banks simply cannot do. we'll continue to read through this. back for you. >> you guys were making the great point that even though february 11 the jamie dimon bottom seems to be good for the stock, relatively speaking to the s&p 500 it's been an
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underperformer. >> look at where the yield and ten-year is, look where sovereign yields are in europe and look at how the banks are acting. don't tell us a move lower in rates or the move towards lower or negative yields will not be good for banks. it will not be good. >> and when he says he's not worried about negative interest rates, wonder if he's speaking specifically about the united states or negative rates around the world. >> should be speaking about them all and will be worried about them all. the ceo of jpmorgan, how can he say these things will be bad, i get it. if we have negative rates, it's not good for the international banks to which jpmorgan is a count part. >> he'd be great on the dating gain? >> you think so. >> you, too, there, sister, don't throw her under the bus. >> pete, thoughts on jpmorgan? >> obviously i think globally it's the bigger concern for jamie dimon. i don't know necessarily and i think what he's worried about is
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not being as worried. the fed and idea of negative interest rates is something he's less worried about. i think he's worried about it globally. >> if we have negative interest rates, it will be armageddon. >> i don't disagree. >> and what we heard from chairman yellen i don't think we'll see negative rates. >> financial trades, after the break. giddy-up. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.
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time for fast but not least, california highway patrol known as c.i.p.swhich is why you're hearing the theme music, found a chihuahua on the highway. >> should have boot that had right off the bridge. >> you would have made a good poncharelli. >> i'll let that hang out there? >> final trade. >> allergen, room to the upside. buy it. >> b.k.? >> let's look around the globe, ewa or etf. >> dan nathan? >> pfizer, deal or no deal,
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benefits either way. after a 10% run can sell calls against them. >> i bet you like c.h.i.p.s, died on his birthday. >> 79th birthday. darden, dri. >> see you tomorrow for more "fast." "mad money" with jim cramer starts right now. make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and 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 teach. so call me at 800-743-cnbc or tweet me @jimcramer. hmm, seems we forgot about takeovers and what these deals can mean for stocks. we forgot how desperate some


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