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

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quarter. but that's not a good sign. >> people will be definitely looking for more context on the calls that said, we'll let everybody turn their attention to that. now stephanie link, mike santoli, thanks for joining us. that does it for "closing bell." "fast money" begins right now. "fast money" starts right now. live from the nasdaq market silent overlooking new york city's times square, i'm melissa lee. traders are tim seymour, steven grasso, and guy adami. if donald trump becomes president of the united states, we'll tell you what the ceos are saying. plus, which companies has a product to make that sold for a dollar and has a billion customers? one of the hottest trades right now. square trading lower, but it's what ceo jack dorsey just said to kayla tausche about twitter. the action today wasn't in stocks, it was in bonds and the dollar, soaring ahead of the all
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important jobs report tomorrow. so would it be better for stocks strong report or a weak report? is good news good news? what is the deal here? for stocks specifically, i think you want a weak report. a strong report back into the corner that they don't want to get themselves backed into it. i think the data, the last six or nine months mixed at best. if you want to be bull initiative stocks at these levels, i think to answer your question you need a weak jobs report. >> i think people feel the data is getting increasingly weaker. you're at place where the u.s. economy is weakening, whether the fed or other central banks are doing what they need to do. i think you need to see a strong number. your presumption is the fed is going to go. we got out of a fed meeting last week and no one said it was going to go in june. i think the market needs to see good data. good equals good. bad equals bad. it's been down all week, people are starting to worry the claims numbers. maybe some softening in the
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labor market. >> so the likelihood the fed will do something ahead of it, what do you think? >> i don't think they'll do something ahead of it. but to guy's point, i think they have painted themselves into the perfect corner you. get a little bit of a weak number. you stay above the two-day moving averages in the s&p cash. i think it leaves them enough wiggle room. but think about it. we're in an election year. what are they going to do? they have to get 80 out of the year in june. do they get it out early? >> waiting until after the election? >> if they don't do it in june, i don't know if they can. >> fed fund futures 8% chance. it's not happening in june. it's probably not happening for rest of the year. >> so why are we so nervous? >> i agree with tim. i think bad news is going to be bad news for the stock market. and i think good news is actually not good news for the stock market either. the fact that the s&p was unable to go up and break the highs from november and obviously break the highs from last year at this time tells you in a way that the path of least resistance is no longer higher. i agree with steve that we may be banging around a little bit
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in an election year. but don't be mistaken. the shocks are going to be to the downside as they've been. we've had three ten-plus corrections from these levels here. to myong it sets up committing new capital right now. >> they couldn't break above new highs back in december either. and then you saw the fed raise. down to the 1810 level there is a chance. we didn't make new highs this time. well could trade back down a bit. and then -- as long as we stay above 2,000 in the s&p. >> the dollar and treasury yields are doing it for the fed. when you think about it. look at the weakness in the dollar we've had year to date and look at what the 10-year treasure yield is doing. to me that doesn't set up. i know under normal qe situations, that's great for stocks. no longer. we're too far ahead here. >> isn't that taking pressure off the fed? >> what i'm saying is -- yes. they're moving ahead. and that's telling investors, they're getting very nervous. look at this week. all these hedge fund billionaires talking about this impending crises that are going
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to happen. it's happening because we're this far along. we have no growth there are very few alternatives to stocks. but that creates a very crowded trade. >> the macro guys are talking their books. let's be clear. the positioning for whatever it is in terms of a two-three cigna event, which is all we heard about coming out of that conference. what he is saying is there is no way the fed can go here. and that actually that's probably what the market is pricing. >> all right. so what do we do here? what do we do here ahead of a fed meeting which supposedly they're not going to be doing anything? >> they do a couple of things. specifically stay long tlt. we're at level news in the ten-year, 175. it's a pretty critical level in terms of yield. i got to tell you something. it feels as if bonds continue to want to rally, which means yields continue to want to go down which means that yield curve will flatten, continue to flatten. look at the european banks. i think they're trying to tell you something. deutsche bank is back down with a 16 handle now. crude oil has gone from 26 to
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44. so if crude was the bugaboo for deutsche bank, clearly something else is amiss there. so i would be worried about that. and i got to tell you something. the gold market continues to want to go higher as well. >> and i would avoid retailers here. we haven't had a lot of u.s. retail numbers. we're going to get those over the next couple weeks. when you think where gas sat the pump here, we know oil has state bid. gas back up here. i do not think that is going to be a good setup for u.s. retail. >> and retailers were a disaster today. >> specifically, if you look at department store, obviously we made a major change out of department stores. if you look at macy's, kohl's, target is the only one that has performed sort of well there is a mass exodus. you want to stay clear of that. i'm long deckers. and amazon, if we get back to that environment where you pay for something, i think you buy amazon. >> i don't think you do anything until you get below 2,000 on the s&p. i think the vix is too low. i'm flat em here. i think a lot of people will be taking profits. positioning now is to the bull side actually.
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>> the federal means key and today's cnbc reporter sat down with san francisco fed president john williams and atlanta fed president dennis lockhart. he is live at the hoover institute's international monetary stability conference in california. hey, steve, what did they say? what are the highlights? >> so, melissa, the highlights are that two fed presidents, both of them pretty much centrists. they see a second quarter rebound. they think the growth is going to improve. both used the idea maybe there was some seasonal weakness in the first quarter. john williams saying that he thought it would be as high as 2% in the first quarter because of statistical noise that is out there. but differences on rates. williams is in the two to three hikes perhaps this year. lockhart a little more circumspect than. i had him about a june rate hike. here is what he said. >> i think we should keep the option open. but i'm very much at the moment sort of on the fence. and it will depend on how the data come in.
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today we kind of have a disconnect between the growth numbers and the employment numbers. and clearly, i'd also like to see inflation numbers continue to move in the right direction. >> he also talked about the idea that the brexit vote is something that could stay. earlier on "squawk box," republican presidential contender still donald trump talked about replacing janet yellen if he were to become president. and here is what john williams said about janet yellen, the fed chair. >> personally, i think chair yellen is doing an absolutely terrific job. she has been navigating the fed through very difficult and challenging times. and i think she not only a great economist, great policymaker, she is a great leader of the fed. i'm 100% in full support for what she is doing. >> and just real quick, dennis lockhart also acknowledged that there is some economic uncertainty surrounding the
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brexit. maybe people could put off purchases and the potential of uncertainty surrounding the u.s. trade and what that would mean for companies in the wake of the election. melissa? >> steve, it's guy. how you doing? do they ever talk about their concerns or fears or curiosity about the flattening yield curve and the fact that ten-year remains stubbornly low? does that give them any pause at all? >> well, we talked about a slightly different but related issue, guy, and that's whether or not -- why the market is forecasting such low interest rates compared to the federal reserve. and, you know, i asked john williams that question. he was, you know, as a fed official, i forecast where i think the best place for rates to be are, where they can be, the best outcome. if i'm in the market, i'm forecasting all kinds of stuff, including negative outcomes. he doesn't think the market has it crazy wrong in terms of the outlook for interest rates if he were out there in the market making bets on rates. >> thank you very much, steve
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liesman at the hoover conference. an interesting dichotomy in terms of what he was saying about rate, right? where they should be versus what the markets are saying. and he said it wouldn't be too wrong if you're in the markets. >> and lockhart saying the labor market is not really kind of aligning with growth and starting to almost get -- huh, maybe in fact we should be listening to the leading indicators. we should be thinking about the ism, the pmis. guy is right with rates. for traders, if you want to position yourself for a brexit or the a blowup or a flight to quality is when you bring your options guys. tbt calls in some way are a place to defend against this place where actually you start seeing piling in, rates head lower. that's the risk here. but the risk to me of that happening means you have to see europe really come apart at the seams. therefore, why not protect for an event rather than position your entire portfolio for a disaster? which i don't think you should do. >> last quick question, are we seeing increased volatility around june on the curve? >> no. i think because fed futures is
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pricing such a low probability, it seems like obviously it's a big payout if you get that right, okay. but i think the likelihood isn't great. >> up next, smoking isn't cool. but cigarette stocks are, well, smokin' despite government efforts to rein in, stocks go higher. suddenly square shares are tanking. so what was it that ceo jack dorsey said that has traders pressing the sell button? we'll hear exclusively from him on the quarter and competition. and twitter. if donald trump becomes the president of the united states, could casino stocks become a screaming buy? we will explain. much more "fast money" still ahead.
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welcome back to "fast." we have a news alert on herbalife. seema mody is back in the newsroom with the details. >> shares of herbalife jumping up double-digits after hours. they said its talks with the ftc are in advanced stages, and it could face a payment of about $200 million if the long running investigation ends in a settlement. herbalife said there are still a number of open issues with the ftc and the range of possible outcomes includes litigation or
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a settlement. the company also posting a first quarter beat due to increased demand for its health supplements in north america and china. shares up 24% year to date, melissa. >> thank you very much, seema mody. i see a pop of 14% in shares of herbalife. and my thoughts go to bill ackerman whose thesis for the short is the government is going to shut this company down. and here we are, the company saying that the range of outcomes will be litigation or some sort of fine. not shutting it down. >> a fine is not a shutdown. and that stock is up 14%. a 45% shortage. i'm not suggesting you go chase this thing because i don't think that's the right play. what i will tell you this is this. the other side of this are many stocks, not least of which is valiant. valiant opens tomorrow and doesn't go down, and i still think that story is extraordinarily dangerous. but if it opens, trades higher, that might be the tell you need, perhaps, to actually be long this stock for a trade. so keep an eye on valiant. >> when we switch back to
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herbalife, the problem with the stocks that they don't really give you a lot of chance to react. so if you buy the stock or you sell it up here, you're better off than buying it. because if you buy the stock and you have one negative headline, one negative fine, it doesn't have to be go out of business, it trades right back down. you say the pop is 14%. that's to literally hold $58 to still be buyable. >> who really thought the company was going to list possible shutdown as one of the alternatives that is going to come out of this. >> you think there is still the possibility? >> of course there is. listen. they're being sued by no shortage of agencies and local governments and that sort. aren't there a lot of states suing them too? here is the bigger issue, and ingi think he said this earlier the business is not doing a lot better. the business model has changed massively. they had 593 in earnings in 2014. they're expected to have 465 this year. so sales have been down. earnings have been down. something has changed. they obviously were doing some things that maybe weren't so kosher before.
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>> who on this desk feels like they've got an edge in this stock? any? >> nobody. >> no. it's an untradeable stock. >> it's an interesting headline. it's ultimately interesting to see where people have made a very significant bet on this company come in. but also, let's see if the regulators are on top of something. because they've been late to the party, very late. >> you could say who on this desk has an edge in the s&p too. >> oh, come on. >> no one has an edge. >> not even close. not even close. >> yes, this times a thousand. this times a thousand. if you think great, let's go across the desk and i'll is ask you where the s&p is going the trade tomorrow at noon. do you have an edge? >> who asks where herbalife was going to be trading at noon tomorrow? we have an edge in calling the fundamentals of the stock. >> it doesn't matter. the point is you have to make it tradeable. >> i can't even respond to that. >> well you shouldn't. you make it tradeable. it's up 14%. if you want to exit the stock, use a 58 exit in the stock. you go to the bathroom, it could be trading at 50. >> are you going to is the
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bathroom? >> put it in sell right now. >> i agree there is no edge in herbalife. i think you could have a huge hedge. >> valiant is down about 1.8% in the after. but on very light volume. >> exactly. if you see that stock reverse and go higher, i don't think you want to fade that move higher. my point is, this stock should be getting obliterated. they should trade inverse. herbalife goes up. valeant goes down. if it holds, get on the long side. banning the sale of e cigarettes, cigars, pipe tobacco to move in line with cigarette rules. the major tobacco stocks are still on fire. take a look at the one-year performance of reynolds american, up a whopping 35%. altria up more than 25%. philip morris surging to 20% in the same time frame. and perhaps the cigarette business can be summed up best by the famous words of warren buffett. it costs a penny to make.
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they sell it for $1 and it's addictive. and yields are addictive too, tim. >> that's right. newport, with all the pressure on the menthols, you have a place here where they just showed in their last numbers their ebitda is down 4 1/2%. the company continues to grow. this long piece by the fda came in less onerous. it doesn't change the long-term financial impact. obviously in this environment stocks where you actually have visibility into earnings and you can see margins growing that pay a high dividend, they're going to trade expensive. these things continue to go higher. this is proof in the pudding today is why people own these stocks. >> i'm long. i remain long. every dip is a buying opportunity. until we see rates go anywhere or think they're going anywhere substantively, these stocks are still going to fly, or maintain. and if the market gets hit, they'll get hit less than the overall market. >> is this your bunker stock? >> this is one of my bunker stocks. >> i'm a do no evil invest. i don't want to invest in
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tobacco. i'm out. >> a responsible investor. >> no guns, no liquor, no sex. >> whoa, whoa, whoa! >> trades. sin stocks. >> sin stocks have been rocking, by the way. if you want to admit not buying sin stocks. adami is not a player. >> make some pretty amazing products at chd, number one. number two, to tim's point about the trade expensive for a reason, reynolds is probably close to 19 times forward earnings. that probably puts them on tupper end of historical norms. but in this environment you can probably justify it trading higher, maybe a low 20. >> chd was up. >> sin stock. >> still ahead. >> trade over the grave stock by the way. we can explain that in the next block. >> major fire in canada shaking the oil market. we've got the latest details on the damage it's causing live from the ground later this hour. i'm melissa lee and you're watching "fast money" here on cnbc, first in business worldwide. in the meantime, is what is
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coming up on "fast." >> why is steve wynn so angry? >> we'll hear from him when "fast money" returns. plus, bets against biotech stocks are surging. and meg turrell knows which. when "fast money" returns.
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♪ (music pl ♪ throughout) uh oh. what's up? ♪ ♪ ♪ does nobody use a turn signal anymore? ♪
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welcome back to "fast money." tanking on earnings, kayla tausche is at headquarters with the latest. what's behind the move? >> there was a surprise legal charge that the company optioned the quarter $50 million or 15 cents a share detracted after a private settlement with a st.
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louis professor. it was a lawsuit that had been outstanding for years. the company views it as a positive. but it essentially doubled the company's loss in the quarter. and it came as growth of revenue and payment volume while slowing slightly did still come in far above expectations. hardware revenue for the actual card readers was up 634%. and the company was actually able to raise guidance because they're on boarding bigger merchants and they're offering some of those merchants bigger loans. but dorsey, despite the stock's move and slowdown in revenue, he was optimistic about square, but we asked whether he can stop the divergence between the two companies he owns, square, which is growing and twitter which is slowing. here is what he said. >> we focus on what matters. and what matters is actually building the products and building the service. again, we want to make sure that we're building something that people value every single day. and we're really driving around building a daily utility that everyone can benefit from. and that's what we can control.
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and, you know, we're showing it. we're focused. we have it prioritized, and we know what comes next and we know what to do. we know what people love and we're making it better. >> so they're focused on building products. but that's actually getting more expensive too. research and development costs going up. stock compensation costs going up sharply. none of those things the stock compensation and the starbucks deal are included in the adjusted numbers. the blurriness of that adjusted profit that the company is guiding toward is what brought the stock down in the previous quarter after earnings as investors got behind what really the company was saying about the year. not to mention, melissa, there is one other overhang for this company. and that is a lockup of shares that were issued to early investors and employees. that expires on may 17th. some 64 million shares doubling or tripling square's float if investors decide to sell that is just two weeks away. of course, that can always cause heavy dilution. he said it's a one-time event.
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companies at this stage go through it. but certainly there are a few line items that are giving investors quite a bit of pause after hours today. >> kayla thank you. kayla tausche joining us from square headquarters with her exclusive of the head of square and twitter. she mentioned twitter and that he is dual ceos. twitter hit an all-time low this past week. >> square is seemingly on the way. the short interest in square is north of 50%. so a lot of people are shooting against this, correctly so now in the after market. but his comments are interesting. they want to build products that was the word he used? >> ubiquitous? >> did he use that? >> the problem is he is not speaking the language of wall street. he can talk all he wants about twitter and square. but wall street is not believing in what he is putting down. short interest in square's 50%. it's going to grow. they're going to push this thing down until their profitable, which is some time next year. i think the stock continues to go down. >> an opportunity, this company
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does 1.2 billion domestically probably 42 billion internationally. tremendous amount of growth opportunity. but problem is everything that guy said coupled with lockup, this is something that i bet against in the past with a lockup expiration. and it always works against you. so i think support in this stock is probably another 15% lower. we're talking about a $10 name here, not a $100 stock. a 10 dollar name here. it could be a huge move there is the recent low of $8.45. we're talking about a dollar price of a stock. >> a lot of people that are going to buy this stock as flyers versus buying a par or a $100 stock. >> are you looking this as a flyer? are you looking at this a flyer? >> it has nothing to do with whether it's interesting or not. >> but you're going to get a lot more people that will invest in a $10 name as a flier than invest in a $100 name. everyone with can do that risk analysis at home. >> its same amount of work whether it's ten shares at 100 or one they're at a thousand.
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internationally, look, there may ban opportunity. it's the same opportunity they're not hitting here too. much competition. the stock is going a lot lower. >> still ahead, check out shares of wynn resorts. 1.8% is the gain. we'll not only here from ceo steve wynn on the quarter, but we're going to take you inside one of donald trump's longest and biggest feud was the casino magnate. and find out what has a slew of investors upping their short bets against a number of biotech stocks. we're back right after this.
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>> he was the precursor to bruce horns by. but not to be confused -- ♪ you're not gonna watch it! ♪
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♪ no, you're not gonna watch it! ♪ ♪ we can't let you download on the goooooo! ♪ ♪ you'll just have to miss it! ♪ yeah, you'll just have to miss it! ♪ ♪ we can't let you download... uh, no thanks. i have x1 from xfinity so... don't fall for directv. xfinity lets you download your shows from anywhere. i used to like that song.
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welcome back to "fast money." let's get to the latest on a developing story on the raging wildfires near canada's oil sands region. cnbc is at the scene in alberta. deirdra? >> hey, melissa. we were evacuated earlier today to move further south. as we were packing up and leaving, my producer justin was able to get this footage of a huge cloud of smoke approaching us which really tells the urgency in which we were asked
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to leave that area. we were only about 15 miles south of fort mcmurray. and the fire has been moving south throughout the day and throughout yesterday as well. it's forcing people who have already evacuated to reevacuate to safer areas. now we've been talking a lot about the affect on the oil sands. of course, fort mcmurray is the heart of canada's oil industry. while they haven't been directly affected by the fires, production has been curtailed and some operations have been shut entirely as employees have had to evacuate the area. we're right now standing on highway 63. this is one of the major routes to and from fort mcmurray when the town was booming, you would see lots of trucks carrying supplies and equipment back and forth. but now as you can see, it is quiet, safe for emergency vehicles going to and from the affected fire areas. back over to you. >> any word on when this fires can be controlled? >> we don't know. it is so unpredictable, melissa, that the winds make it really hard, and so does the temperature. tomorrow is expected to be
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another hot day. and over the weekend, and that of course is bad news for wildfires. it just means that it spreads more quickly. they're so unpredictable. in fact, the mayor of this area called it a multiheaded monster because it is so uncontrollable, and there is emergency wildfire training going on right now for backup in case the firefighters that are there already and all the equipment isn't able to contain the fire over the weekend. >> all right, deirdra, thank you. deirdra bosa in alberta for us. what happened with oil today? we -- higher by 4% or so? and we basically rolled over. >> let's give oil is also down 10%. you can't get excited about a small bounce in oil today. if you're someone who thinks it can go lower, you're probably saying this is what is supposed to happen. 44 on brent. after a big move, there is nothing fundamentally that says oil should go to 60. but to me, i think the worst is absolutely over. i think oil is going to hold 40 on brent. and you already are seeing
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production fall offline. that's it. >> i think you should have seen a much bigger sustained pop in oil. but the reason why you didn't see that pop is because you have 94 million barrels a day is the output in oil. canadian sands oil is approximately 600 to 800 basically. a thousand barrels a day. >> it means nothing. >> it means nothing. libya, 300 to 400 means nothing. so i would think at this point it's down versus up. >> i don't see support 40. >> what is correlated when you look at the dollar and oil, what is correlated is the s&p and oil. and oil goes down, so does the s&p. if you're a bear, that's what you're hoping for. >> ovx is $40 is what you have to look at in terms of support level. i still think ovx is elevated here at 45 bucks. i've been wrong for quite some time in terms of crude. but maybe this is the situation that defines a short-term top at least. >> we should bring this to your
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attention. gopro is down by more than 6 1/2%. >> the release was about gopro's drone. they were going to launch that drone in the first half of this year. now saying they're going to delay the launch of that drone. ceo nick woodman talked about that delay on the call. >> as late as this week we believed karma's launch was on schedule. however, karma includes revolutionary features that differentiate it from other drones. features that make it much more than a drone. and deliver the versatility, value, and performance that consumers expect from gopro. >> so from that conversation so far, melissa, on the call, it's not clear, at least to me why the drone has been delayed. was it engineering issues? technical issues? now saying the drone will be ready for the holidays.
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but no specific point there. no surprise a lot of questions about that on the call. analysts want to know would that drone delay impact the delay of a new camera which is also expected later this year. executives saying it will not. that the drone schedule is different than the camera schedule. they also tried to get at the cfo about the margin profile of this drone. cfo simply saying the q1 gross margins that clockeded in at 31% owill l be the low point of the year. and finally listen, you pin the pressure on this company on you mispriced that hero session. you mismanaged it. you didn't put enough marketing dollars to work. do you think you have learned from those mistakes? nick woodman, the ceo saying gopro is good about what were the lessons learned. although you can see clearly traders and investors very concerned at this point. melissa, back to you. >> all right, josh lipton. thank you. >> by the way, the stock is now trading below $10. does that mean anything? >> no, no. i'll tell you why it could rip. it's got a 30% short interest on
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the stock. it's a $10 name. so you could see this thing pop. with any hint of positive news. i don't think it will be a hint of positive news. >> right. >> so i do believe that people talked about it as a digital company. when you look under revenues, it's just to me says all hardware. it's all hardware. >> this is a hardware company, and they can't seem to execute on the hardware side there is no recurring revenue stream for this company. they didn't try and be -- the interface so that people -- >> it's not a drone company. >> all the things that were supposed to become haven't become. >> and it's not cheap at 10 bucks or below 10 bucks. >> the truth is -- >> it does have a water skiing chipmunk. pretty amazing. >> to be frank, listen, they have a very good balance sheet. a third of their market cap is in cash. they have no debt. so burn is going to be an issue at some point. less than one-time sales, if they ever are to get their act together. listen, i've been saying that the cram is like the flip cam a we saw in the last decade, and i never thought drones railroad
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were going to be the thing. i think there is a lot of regulatory and safety issues why drones are never going to be a thing. they really is to come up with something else. i'm not sure what the brand is worth and i'm not sure that nick woodman sales the company either. it's probably stuck in and around your $10, steve. it's not expensive, but people have no idea what these guys are going to reinvent themselves. >> still ahead, still ahead. >> look at the video. >> still ahead. have i something to say about it. >> the chipmunk? >> still ahead, was wynn think is trump presidency could be good for his stock? one trader just made a $5 million debt that a specific group of stocks are going to tank. >> good luck, guy. >> we'll tell you what they are later this hour. much more "fast money" straight ahead. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations...
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welcome back to "fast." shares of wynn moving higher after an earnings beat. indicate r kate rogers in the newsroom. >> wynn reporting a nice adjusted 107 that were in line at 998 million for the first quarter. reported revenues for macau were in line with wynn's guidance, 8.62 million and vegas at 89.4
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million. after making wave last investor day in april, saying that, quote, rich people only want to be around rich people. nobody likes being around poor people. so we try to make the place feel upscale for everyone, billionaire steve wynn seemed to change his tune on today's conference call on paradise park in las vegas, actually touting its accessibility. >> i'm going to charge for it. and that's going to make this place accessible. it's 100 odd dollars to go to disneyland. we're going to charge 20 bucks. >> now wynn has said the project will, quote, reinvent the strip, and it should be open in the fall of 2017. melissa, back over to you. >> thank you very much, kate rogers. i remember that comment. >> rich people, poor people? >> yeah, poor people don't want to be around poor people. >> how much money is being spent in vegas, how much money is being wasted by people who have a lot of discretionary income to burn and a couple that don't the las vegas palace is a great idea. theme parks haven't really
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worked in vegas whom. knows whether this thing is going to be born in 2017. and ultimately 140 acres of a golf course is something he should put to use there is a lot of good news in this stock. 89 is a key level if it breaks, i think it goes lower. >> macau coming in line here? >> we know that macau bottom out year-over-year down some 40% last year. >> it's bottom out. >> the declines have bottomed out. the problem i have is everyone looking at coat tie. you still have weak demand. if we see another leg lower in asia, i don't know how you meet weak demand with more capacity. that's going to be a second half 2016-2017 thing. i'd not short it but wouldn't be chasing it at 90 bucks. >> here is a question. would a president trump be good for las vegas and the casinos there? and what type of relationship does trump have with steve wynn? jon ralston is the host of "ralston live" on nevada pbs and a politico contributing editor. he knows vegas better than almost anybody out there.
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john, it's a pleasure to have you on the show. >> hi there. >> so would he be good for las vegas? >> well, he certainly would know a little bit about casinos, or at least how to bankrupt them. but seriously, trump, he has a place here, but it's not a gaming property. and he does know steve wynn. he met recently with sheldon adelson, the other major player in the gaming industry here. 10 would he be good? i guess we don't know what donald trump is going to do as president, right? that's a big mystery. and it's still a long shot in my opinion that he ever becomes president. >> we got a lot of pictures of mr. trump and mr. wynn smiling, standing very close to each other. do they actually get along? i understand -- >> siegfried and roy. >> i understand they've been in a feud for quite some time. >> it's really an amazing story. maybe the love story that will be made into a movie some day. i still remember when i first started writing the column about 25 years ago, and i wrote a column calling steve wynn the donald trump of the west, which sent him into quite the tizzy.
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he called me. i still can't believe someone could keep their voice at that decibel level for that long. these guys really did not like each other. they were fierce rivals in atlantic city. never in vegas. but much more recently, steve wynn and donald trump have been very close, going to each other's weddings. steve wynn, when i first talked to him about donald trump's ascension in the polls a few months ago was absolutely stunned. he could not believe it was happening. but don't forget that steve wynn was the loudest critic in the gaming industry of the obama administration very early on in 2009. he started giving interviews to myself and others saying it was the most anti-business administration in history. so he doesn't feel -- i don't think he has quite the same animus toward hillary clinton. he had dinner at his place in new york with hillary and bill clinton. but i can tell you that i would guess that steve wynn and donald trump see eye to eye on a lot of issues now.
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>> you mentioned that -- the donald had been meeting with sheldon adelson. do they get along? >> well, you know, it's interesting. i don't think they knew each other at all. and when he came to town, trump, he met with adelson. adelson told everybody after that meeting that -- and he used the same word, he found trump to be charming. now i think what adelson wants most and has since the mitt romney disaster when he poured so much money into that campaign is to be with a winner. i think he wanted marco rubio to do better. i think he and his wife both liked ted cruz. i don't think he ever considered supporting donald trump. but if the choice between donald trump and hillary clinton and donald trump as he is now saying he is going to raise significant amounts of money for the general election, i would guess sheldon adelson is going to help him. >> all right, john, a pleasure to speak with you. thank you for your time. jon ralston. of course you catch his show, "ralston live" on nevada pbs.
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>> don't miss it. >> will it be good? >> if he is good for him, he has to be good for nevada. he has to be good for vegas. i don't think he would be good for macau. if you think he is good for vegas stocks, you have to buy mgm. the other two lean towards the reliance or the leverage to macau where mgm has the leverage to vegas. >> at this point as we were mentioning macau bottoming. >> the pictures are a little creepy. >> and let's hope by the way trump has nothing to do with the casino industry in las vegas if he is president. it's -- this is one of these many things people aren't even really talking about. but dan's point on where these businesses have built their future and where people are priced enormous growth, it's coat tie, it's macau, it's multiple properties in that region this is a place where there is an enormous amount of supply. i think it's usually overrated. but sometimes people are whimsical. they can say hey, it's great and yet not price in the risk
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factor. a lot of the stocks have a handful of issues. >> the president, current president made comments that really hurt the convention business in vegas. >> yes, very true. >> we don't talk than a lot. that's a huge part of what goes on out there. if nothing else, trump would be good for the convention business. it's gotten back somewhat. it hasn't gone back all the way. i think it would put it right back on the map. all right. coming up, biotech is under some major pressure this year, and the short sellers are increasing their bets. we'll tell you which names in particular have the short so excited. plus, the secret sign in the market that the run in gold might finally be coming to an end. you're watching "fast money" on cnbc, first in business worldwide.
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the job support is coming and tomorrow's number could unleash a host of consequences that could hit your general wallet. what's at risk. plus, need show me movies with romance. show me more like this.
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show me "previously watched." what's recommended for me. x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. welcome back to "fast money." meg tirrell is here with a look at this quarter. meg? >> the whole thing is dragging the stock down after hours that they lowered their guidance by a lot more than was expected. analysts saying we did expect them to lower their guidance but not this much. putting out 8.37 billion, down from 4.32 to 5.42. they readvised their eps by more than a dollar a share for the
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entire range. the ceo citing pricing pressures and suffering from its resemi-ians to valeant, or resemblance it's trying to distance itself from. but knits the pharmaceutical model and the ceo used to work at valeant, also worked for mike pearson atkinsy. that was something that people liked about and was their resemblance to valeant for so long. now that you're seeing what is happening with valeant, you're seeing it to endo to some extend. people wondering about the viability of this business model. >> do they have a pipeline? could they be acquired a this point? >> it's possible. they are depressed quite a bit. but they do have some debt. so people worry than as well. and they are saying instead of going the m&a route, maybe more organic growth. people wonder what is there and can it really grow if they're not buying as much. >> we want to do a little postmodern -- i'm not sure why it's postmodern. that's what our producer matt says it is. but anyway, you're seeing a big increase in shorts in biotech. >> yeah. just over the last month, i've
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sort of anecdotally observed there is a lot of short reports out that made an impact on some mid cap biotech names. and i actually decided to ask activist stocks research, which tracks these activists short tellers, about whether there is more shorting on a public level in biotech than in other sectors. they gave us really interesting data. in 2015 here, they show that health technology, which encompasses health care and biotech had way more short campaigns than any other industry. 52 compared with the next most, 25. if you look at this year, health technology is ahead with 11 compared with 10 in the next one. so not ahead by quite as much. and really, the three that caught my eye over the last month, which did have impact on sage therapeutics. at least with sage and intrexon, the shares really did take a
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hit. with sage it rebounded right away. analysts came out to defend. the short seller was saying they don't think the phase 3 results will be as point of view as everybody else thinks. let's see the phase 3 results. this is on the company and on the data to decide. on the other once, at least on intrexon, it's attacking the company's entire business model that is a little more open ended and that stock hasn't recovered. it's recognize the see all of these really public short campaigns against biotech after you have seen the bubble burst. and sentiment is so negative that people really seem to kind of at least in the first day these reports go out get affected by this. you can see it in the stock reactions. >> meg, thank you very much. meg tirrell with stock therapy. and intrexon is the interesting stock because it's a zika stock, which had a huge spike because of the engineered mosquito so they can't pro create. >> lovely. >> that's what it is. essentially in a nutshell, that's what they are doing. questions now as to whether or
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not that actually works. >> and when you see big moves like that and stocks like those, they typically are short-lived. we went through this a year ago or so with megan and other ailments we talked about this. i say this about the ibb. 285 on the way down. bounced. this time it traded up there and failed. now it's 10% below. i think ibb, the bioindex trade is back down to 240. it's critical that it holds that level. >> can mma help? we have innovation, lots of suitors supposedly in line. we had merck, the ceo saying they are actively looking for candidates to bolster. >> it can. but the odds of you picking the right candidate i think are slim and none. and i think you have to play with it ibb and guy brought up that one level. i'm going to bring up the 50-day moving average, which is $267. it has to close above that, 258 last, and stay above that that's how you keep it tight to your vest. i don't think anyone has an edge here. so i would play it that way. >> but what meg is talking about, i think she is also referring to there could be a on
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the rarian call. we're starting to get to place where things are oversold. analysts which were cheerleaders on the way up, is this the beginning of a bottom? i wouldn't go for it, but maybe starting to work to that point. >> well, dan is not here next to me. >> where did he go? they can only mean one thing. actually two things. either that i kicked him out, or he is at the smart board with a bearish bet on the metal as trade. >> as negative as the sentiment has been in 2016 for biotech stocks, it's been really positive for metals and mining stocks. today there was a trade in the xme, the s&p metal and mines etf that really got the options market going here. three times average daily volume. most of it was puts. and it was in a bearish trade, or possibly a defensive trade out in september expiration. when the xme was trading at 2285, the trader bought 50,000 of the september. 2015 put sprechltds that's $5.6 million. and it breaks even down 17% at
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1888. and i want to go to the charts here. that's why we're at the smart board. sometimes these charts things kind of work here. the xme had broken down late last year at this $25 level. it went all the way down. it's had almost 100% rally. it stopped right there. if you look at the decline it's had in the last week and a half, and then you look at this long-term downtrend, it also failed right below that. so this sort of bet could be an outright bearish bet looking to get leverage down to the downside or possibly a hedge. >> all right, thanks, dan for that. for more "options action," check out the full show tomorrow at 5:30 p.m. eastern time. coming up next, final trade. stay tuned. here at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you
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anticipate potential price movement. there's no way to predict that. td ameritrade.
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the jobs report is coming, and tomorrow's number could unleash a host of negative consequences that will hit your wallet. i'll tell you what's at risk. plus, need a drink after that? i've got the best of the beer stocks. "mad money" is next. final trade time. tim? >> i mentioned flat em. brazil still has some room to pull back. again, a lot of expectations priced in. etf went from 17 to 30. take some profits or get short here. >> 386? >> stock that is quietly performing very well, but i'm still long, disney. it's a trading zone, 103 basically to 107 1/2. trade it. if it breaks out from there, it's going back to the same highs. >> nathan? >> goes back to 40 over the next 30 months.
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>> thursday night and cinco de mayo. giddyup, all-time high. >> very disturbing. very zurich. i'm melissa lee. thanks 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 mark somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. my job is not just to entertain but to teach and educate. so call me. 1-80 1-800-cnbc. if it happens on a day when oil can't hold


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