Skip to main content

tv   Fast Money  CNBC  May 9, 2016 5:00pm-6:01pm EDT

5:00 pm
these issues. >> it only started. so we know it will go on for years. thank you very much for joining us on "closing bell." as mentioned, much more of the interview with jim top of this 6:00 hour. that does it for us on "closing bell." "fast money" begins right now. >> "fast money" starts right now. live from the nasdaq market site overlook times square. tonight on fast, legendary investor said investors have it all wrong about the fed. he'll be here to explain in just moments. plus, forget about opec. something else is driving oil that could determine the fate of the market. later, lending club becoming just the latest company to have a ceo resign suddenly. a shakeup may not necessarily be that bad for the stock at all. but first, we start off with a familiar fear returning to the market. all the major stocks heavily tied to china. falling hard today.
5:01 pm
look at joy global, caterpillar, fears of a chinese slowdown. copper feeling the pain. are we starting to see the familiar fear of china and a chinese slowdown back into the market? guy, what do you think? the last time the fear was in the market, that was a very bad time. >> the fear is back. but a lot of this has to do with the strength in the u.s. dollar as well. a lot of this through the strength in the u.s. dollar. a lot of people talking two fed rate hikes later this year. i'm not sure i'm in that camp. i think the dollar is on a hair trigger to go higher. coupled with the fact china is definitely slowing down. coupled with the fact that a guy like david einhorn last week talks about how caterpillar is one of his top short ideas. coupled with the fact that these stocks have been on fire for the past couple of months. they all do set up for a move lower. in my opinion, nothing's really changed, other than the fact that copper bounced and the market stabilized, nothing changed in the fundamentals.
5:02 pm
here we are ratcheting back down. do we get to the lows from a couple of months ago? no. i think there's 15% to 20% on the down side left. >> i totally agree. but remember, when you look at the super levered ones, they went up huge. steve was all over freeport, still up 100%. the overall enterprise value hasn't changed that much. not all the way back. >> the g-20, we talked about this, china increased its fiscal deficit to gdp ratio. freeport was up 300%. a lot of that was the easy money. where did you see it today? staples. money rotating into. and if you have that happen again, the beta trade, is it over? i think china is the key to the market. oil is the key to china. oil should have been down more
5:03 pm
if it wasn't for the fires. >> guy mentioned the dollars. we saw the highest level on the dxy. the correlation between a weak dollar and riskier assets the highest level in 20 years. a weak dollar in order for riskier assets for stocks to go higher. >> i think we're seeing the rotation. we've been kind of grinding around for a little while, whether you want to look at the volatility index itself. guy and i are always looking at the oil volatility. it's been grinding in the mid-40s for a while. we still stayed in this race. we talk about oil moving up and down. it certainly is. every single day, day in, day out. when you really look where oil is presently, those moves, it's been fairly close, somewhere in a range. that looks range-bound. look at volatility, can't get above the 50 and 200 day to save its life. down today. everything moving today was leveraged. the leverage coming out of the market today, everybody was
5:04 pm
hitting. you look at something like shinneer, and con aco, if oil's moving to the upside with any torque, conoco is going to outperform. and outperform to the downside against chevron. >> i do think that the fed has to raise -- if they're going to raise, i think they have to raise in june. they have to get away from the political year. they have to get away from november. i think if there's one thing they're going to do, if they want to, they have to raise in june. >> guy, you had a laundry list of reasons why -- >> laundry list. >> five things coupled all together. so is this the time to start -- should you get small in the market? >> pete's talking about the vix. as the vix ratchets down, it's typically been a level 2. if you want to stay with the names you already have. if you're not inclined to go
5:05 pm
that route, there's nothing wrong with taking somebody off the table, especially in some of the energy names that have had huge runs. the valuations -- they're not deserved of the valuations you're getting. caterpillar, einhorn said they might earn $2 a share. think about that. think about what valuation you would have to have. >> you know caterpillar, if you look back on a long-term chart of cat, it beat china by about a year. if david einhorn feels cat is rolled up, you've got to believe that the china trade is over. and that really takes energy, materials, industrials off the table. >> right. what have you been doing lately, karen. >> we did take a little bit of money off the table in the mlb space. we sold a little bit of jpmorgan. still have some bank stuff. i sold nrf, north star realty,
5:06 pm
they're merging. i was hoping for something much better. was up 8%. sold that. i'm not going to sell -- you know, macy's, they're going to report. hanging on to that. coors, hanging on that. citibank, bank of america, i'm hanging on to those. >> bold call on the fed. you want to listen to him, because he is a fast -- >> what? >> he's a master. >> kicking off the fast master series. mohamed, thank you for being here. i appreciate it. >> thank you. >> we're showing your book, by the way. i want to get to your fed call. most people are saying one hike this year. you're saying not so fast. how many do you think? >> i think definitely one, and maybe as many as two. i think the market has forced
5:07 pm
the fed almost out of the equation and i think that's wrong. >> june is on the table in your view. what happens to the markets, do you think, if we get that hike? especially if the markets are not thinking that there is a possibility of a june hike? >> that's an argument i hear often. the fed doesn't lead the market, the market leads the fed. and therefore, the likelihood of a june rate hike is diminished. i also hear the argument there was a miss on the drop creation at 160,000. but let me tell you a few things. when you look at the internal of the job reports, good wage growth, hours worked went up, and the indication of slack in the labor market came down. secondly, this is a fed that wants to normalize. and it's learned from last year that you shouldn't miss windows of relative market comp. if the market stayed this calm,
5:08 pm
you'll see the fed starting to manage expectations, and i think the probability of a rate hike in june is not below 5%. i think it's higher than that. is it predominant? no. but it's certainly what the markets have priced right now. >> mohamed, it's karen. what if we see that hike, what do you think the reaction will be? >> i think stocks will sell off. i agree with you completely in terms of this is the time to take some money off the table. if you are in credit, this is the time to trade up in quality. we have been in a massive range-bound market. we have come off the top. and we have to remember, february 10th wasn't so long ago. second, another reason to be careful here is the growth prospects for the global economy. we may challenge -- you know, the market sentiment seems to go all over the way in china. but the growth numbers have been coming down for the global economy. so i would say be careful on the
5:09 pm
stock side. if they do hike. and the dollar will strengthen. >> so let's walk through the year, mohamed. let's say they hike in june or sooner than what the markets are expecting. we see the volatility sell off in stocks. we have a rise in the dollar. what happens come november? let's say trump is elected. jeffrey gunlock told the new york historical society last week that that could mean a global growth scare that could last as long as two years. are you in that camp? is that a risk in your view to the market? >> i think it's too early to say what would happen. because mr. trump's views evolve. just look at his views on u.s. debt. so they evolve over time. and his mind-set is from being corporate driven to being broader than that. so i can't judge as to his chances of winning. i can't judge what happens to the market. but i do know that politics is underpriced. we have yet another government, austria, that has fallen because
5:10 pm
of anti-establishment movements. they are strong. they're complicated. the market hasn't priced that in. so beyond that, there's this sort of political risk. the one thing that i want to mention that may stop the fed from hiking is the -- the fed will be more careful than it would otherwise in june. >> mohamed, thanks so much for joining us. we do appreciate it. good to see you. >> thank you. >> all right. so what do you say? >> i say based upon what he's talking about whether they raise or breks it, or they don't, you look at volatility right now. you want to stay in the market, you don't want to take any positions off, karen's one of those people, i'm one of those people. i've got pharma, i've got banks. i want to be able to give myself the proper -- >> have you been selling anything though? >> i have been trimming a lot of things. but there are names i want to hold on to for quite a while.
5:11 pm
i believe in bank of america. >> what are you trimming? >> i took off all of my gold. maybe that's wrong. but i want to see where that's going. i don't think it will necessarily continue. i just decided to take that off the table. >> i think you have to take all of your energy positions off the table. i think you'll see a knee-jerk reaction, see them sell utilities, reits, you'll see them sell the staples. then they'll look back and say, we're still at abnormally low rates for the environment. so i think you buy those at a discount. i would get out of energy. but i'm also still saying in my housing bets, phm, and i still own my apple. >> let's go back to the dawn dri list. >> you like my list. >> i do. very long list. i have it down two sides of paper. >> typically you don't need to do a list when you go do laundry. grocery list might have been a better example. >> anyway, back to the laundry list. if the dollar is strengthening, does that basically end any sort of gains for stocks? >> well, talk about gold real quick.
5:12 pm
now gold's going to have to prove itself in a rising dollar environment. quickly on this. if they raise rates into what i think is a deflationary environment in an earnings recession, what does that do to the yield curve. it continues to flatten it. in my opinion, maybe it goes inverted. which is more deflationary and then spirals on itself. they have to be really careful about raising rates at these levels, in my opinion. >> so don't? >> they should have done it a long time ago. but now is not the right time. up next, one stock fell 70% in the last month after the ceo told investors it was, quote unquote, unwise to short it. we'll give you the name. plus, captain america making another record at the box office. why is the stock down today. do the investors see a bombshell ahead for disney's earnings report. two industry groups that are the backbone of the economy are showing signs of stress. we'll tell you what they are and what the moves could signal for the marks when "fast money" returns.
5:13 pm
5:14 pm
5:15 pm
5:16 pm
if you look into the individual brands, old navy falling the most around the world, tumbling 10% year over year for the same-store sales, banana republic, down 7%, and gap brand saw comp sales down 4% from 2015. the retailer says that it's also evaluating its banana republic and old navy fleet primarily outside of north america. fleets usually mean stores. i had a conversation with the gap ceo and he told me evaluating stores outside america is a pivot from last year. he's now looking at the global footprint to make sure he's taking advantage of the biggest opportunities for profitable long-term growth. if you remember, last summer is when gap announced store
5:17 pm
closures and job cuts here in the u.s. melissa? >> courtney, thanks so much. so big decline after hours. >> yeah. lots of bad news to choose from in this -- >> the laundry list. >> yes. >> grocery list. >> the overseas isn't that big. but the brands are really struggling. i'd like to think, and i hope, and i do believe that gap is very specific. they've been struggling for a while. i don't think it means that all retailers should be thrown out with the -- >> and it's been a value trap. the problem with gap has been that everybody says, well, look, it trades at such a low multiple. the fact that they give it a nice yield. the yield continues to get higher. the multiple continues to get a little more interesting at all times. every quarter now it seems like for the last multiple quarters, almost a year i'd say, it seems to be going down, down, down. we've not seen this start to move at all to the upside.
5:18 pm
>> yeah, sit tron, this has got to be a turn-around story. except there's no signs of the management saying if -- >> it's a pivot. >> we'll see where it pivots to. >> but where does it pivot to? >> does it go private? >> he was right. he said that at 26 1/2, i think the term he used was irrelevant. i think he was talking about the company. now he's talking about the stock. this was a great story a couple of years ago. now it's a lousy story. >> similar to going private, though. >> i don't know where you go. when you just asked pete, is it all down. i'm paraphrasing. you have the calendar shift, the easter shift. >> bad weather. >> bad weather. >> off-prices strong, not macy's which reports this week. >> if you look at the chart, it looks like death.
5:19 pm
but it's up year-to-date. but i just think that department stores as a whole are troubled. if you look at target, target seems to be the outperformer in the space, up 10%, 11% year-to-date. every time it rolls over it wants to show some signs of support. it was forced to play the department store, it would be target. >> i know where tj is going. >> tj maxx. >> wait a minute -- the multiple is getting a little bit -- i'm looking at it trading to the low to mid-20s. i still love the name. i think you'd want to take some profits if you're in the name. >> tesla falling nearly 3% today. if you look back when elon musk warned against shorting the stock back on april 6th, what have they done? they've fallen more than 17%. actually, it would have been good to short at that time. guy? >> i don't think he was talking
5:20 pm
about a three-week trade. in reality, he top ticked it. i think it was april 6th, trading in the mid 240s. you see where the stock is trading now. down 20%. what is the next catalyst to get long the stock? i think that's the question you have to ask yourself. you throw a lot of things, but for him coming out and saying he's going to buy more stock, or don't short it again. i think the stock has 180 written all over it. it's had a round trip from 140 to 240. you find yourself in the middle. it feels like there's, to me, i don't know what the catalyst is to take it higher. >> all they have to do is say, 500,000 reservations, right? >> got to make them. >> i don't like it when ceos are commenting on their stock price. he's got a lot of stuff to do. and it's a big job. i'm sure he's on the day-to-day not focused on it, but just not to -- >> there's only one reason to buy tesla, and it would be on a technical basis. we've been talking about it for a while now. couldn't produce one car, two
5:21 pm
cars, now he's got to produce three cars. if you want to play it for a technical -- >> 205 down to 190. >> those are key bounce levels. that's where the stock should in theory bounce. it can become more oversold. i do believe the story is probably in the ninth inning. >> in the ninth? >> whoa! >> the stock is in the ninth inning? >> yeah. i can't -- >> you think that the end is near for tesla? that's basically what you're saying? >> look, i kicked it off saying he doesn't understand where there could be a catalyst. i don't think there's a catalyst. and if you think that oil is going south, where is tesla going? definitely correlated. >> i agree with -- >> that's in the phone call, by the way. >> i also said oil will not trade at 50 and i'm still alive. >> you are alive. >> the only pushback for the chairwoman is she said she doesn't like when the ceo
5:22 pm
comments on the stock prices. he's talked about being inflated in the past as well. so i like the fact that at least this guy's aware of where the stock is. and actually giving the public, hey, i think this is up in the ether. >> as we head to break here, look at shares of solar city. the other elon musk company. they're down more than 17%. this is just in the after-hours trade. it must bring a smile to jim's face. i'm melissa lee, and you're watching "fast money" on cnbc. in the meantime, here's what else is coming up on fast. >> that's what a couple of ceos have done recently. but their departures may provide a buying opportunity. we'll explain. plus, a top technician said two industry groups vital to the u.s. economy are falling apart. we'll tell you what has him so worried and what it would mean for stocks, when "fast money" returns. rship rship is about vision and integrity,
5:23 pm
confidence, inspiration, and passion. ♪ pitching wedge. thanks phil. and always having the courage to take your best shot. see the best of the best at the kpmg women's pga championship
5:24 pm
looktry align probiotic.our digestive system? for a non-stop, sweet treat goodness, hold on to your tiara kind of day. live 24/7. with 24/7 digestive support. try align, the #1 ge recommended probiotic.
5:25 pm
welcome back to "fast money." we've seen a whirlwind of doe par turs for many ceos today. lending club announcing that renaud violated business practices. plummeting more than 30%. taking a look at some of the other scandalous ceo departures, a man who's never been touched by scandal, cnbc's dominic chu. hi,dom. >> melissa, i guess it's all relative when it comes to scandals if you dig enough. over the past few years if you want to talk about the few notable scandals, or operational issues that have really caused top execs their jobs, look on the more scandalous side of things, united continental, scott resigned september 8th, 2015, amid allegations of maintaining an unprofitable
5:26 pm
airline route. since then, shares down 20%. since then, amidst a roller coaster ride for shareholders. scandal not the only reason for ceos losing their jobs. sometimes it has to do with operational issues. a couple of years ago, target trying to sort itself out after a high-profile data breach. then ceo stepped down may 5th of 2014. his career spanned over three decades with the company. rebounded nicely, 34% to the upsite since then. it wasn't all fun and games for former mattel ceo ousted january 26th of 2015. amid falling sales and falling stock price. mattel stock did manage to post a 16% gain from then to now. albeit after underperforming for some time. hard to generalize how stocks
5:27 pm
will do after the departure of a ceo. back over to you guys. >> thank you, dom chu. karen, whar the circumstances which might make you think it could be an interesting opportunity? >> if it's something really totally irrelevant, i think it's irrelevant, like personal indiscretion. >> having affairs or something? >> yeah. i could maybe live with that. although i do think boards can live with it when the stock's doing just fine. so maybe that's not a great one. i don't know. i usually think it's a bad thing. i always do think that the new ceo will come in and reset. lower the bar for themselves. so i normally don't buy on a ceo change. >> i think there are times you actually look at it and say, you know what, everything's going right except for a couple of bad decisions. i go back to brian cornell with target. he steps in and takes overnd says the first thing he's going to do is get rid of what we're losing money at, canada. and makes changes in the store.
5:28 pm
he did an unbelievable job as the ceo in the direction for target. how about lu le lemon, they had nothing but problems going on. they get a new ceo, new direction, they start to clean up their idea in how they're going to present their brand. take a look at where the stock is now, pushing to 52-week highs as well. i think there are cases where as long as it's not broken, but it's just the ceo themselves, that's an opportunity. >> i would have to agree. obviously we talk about a three-day rule. this could be a three-week rule. >> oh, wow. a longer timeline. >> nothing historically that points to the right amount of time. i think the problem is, when you think it's just a ceo problem, whether it's an affair or something else, and then it turns out to be a bigger question, so you have to give it a little time to breathe. definitely buy it on a discount. >> would anybody on this desk, show of hands -- >> i like this game. >> -- buy lending club on this departure? >> you get a big huge --
5:29 pm
>> wait, wait. that means nobody? all right. go ahead. >> i was going to caveat it. if you trade 7, 8 times normal volume tomorrow and flush this whole thing out, there might be an opportunity. short of that, stay away. did you have it today? i thought the big move -- i've got to look. maybe tomorrow's the day to take a look. >> you had a flush in price. the problem is if you look longer term trend, this is not a one-day event, not a stock up around its highs. >> wait three weeks? >> i would say never buy this one. >> the whole thing looks like it needs to flush. >> still ahead, oil staging a big reversal today. closing lower. that has the commodities king dennis gartman thinking about making a major trade. he'll be here to explain. later, two groups of stocks heavily tied to the economy are sounding the alarm on the consumer in the broader markets. we'll give you the names and tell you how you can profit when "fast money" returns.
5:30 pm
and that horrible smells are really good at hiding. oh, boy. there it is. ♪ ohh. ooh. [ gags ] so when you need a house cleaner or an exterminator, we can help you get the job done right, guaranteed. get started today at angie's list, because your home is where our heart is. ♪
5:31 pm
mountains, and racetracks.ve conquered highways, and now much of that same advanced technology is found in the new audi a4. with one notable difference... the all-new audi a4, with available traffic jam assist. by switching to xfinity x1. rio olympic games
5:32 pm
show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1.
5:33 pm
welcome back to "fast mon " money." despite the sell-offs today, the s&p and nasdaq managed to end in the green. here's what's coming up in the second half of "fast money." you will not believe what crude oil has gartman thinking about doing. he will join us later. joseph papa just spoke to cnbc's jim cramer in his first interview since taking over the embattled company. did he just take the job for the money. first we start off with two industry groups showing some very troubling signs for the rally. the one and only chart master, he's sounding the alarm in both the auto stocks and the home builders. carter? >> today's research note was on those two very important and economically sensitive areas of the market. i wanted to focus on autos in particular here. these are not acting well as the old-time technical expression goes. i think it means something.
5:34 pm
and it means something not good. there's a grade in the nasdaq global auto index, 37 stocks in total. obviously big names. names that everyone recognizes. this is just a handful of the top ones. you've got all of these big japanese and korean players, mazda, hyundai, so forth. of course, the three in the united states. among others. even things like harly davidson. look at the chart of the index. if you were to define this, up trend or down trend, by all accounts it's a down trend. not only a trend line moving down, but you have a success of peaks and troughs that are lower than the preceding ones. you failed yet again here. the presumption is, new lows. now, one thing to be said is the index is actually denominated in u.s. dollars. you could say maybe it's a currency issue. maybe those stocks aren't u.s. stocks. here's the exact same index,
5:35 pm
denominating in euros. again, this is toying ominously with the prospects of ultimately breaking to new three and four-year lows. i also put it in yen to eliminate any currency effect. it's the same message. not good. we know that the stock market since this point has almost gotten all the way back to its highs, while the auto is not participating. a final chart. i think it's good optics. this, of course, is that index. again, the nasdaq global auto index juxtaposed against the s&p. not a good setup. a message for the consumer, and market in general. we're sellers of autos here. you can pick your pick. they all look terrible. >> for home builders, carter? >> equally squishy. it's just that there are a few individual names that are holding up better. but if you were to look at an aggregate of some of the big ones, whether it's tall, or nar, or little ones like polte, these
5:36 pm
are dragging. so what is the takeaway? hugely important areas that are rate sensitive and consumer sensitive, auto and housing are acting this heavily even as we maintain at or near the highs of the market. >> carter, thanks so much. i really like the charts taking out the currency effect. >> well, auto, people trying to buy autos on valuation for a while, they just go anywhere. i know what he's saying about home builders. home depot is within a whisper of an all-time high. report on may 17th. barclays just slapped $150 price target on it. i think it continues to go higher. despite the things carter just said. >> if you chart xhb, the home builders index, overlay it with ford or gm, it's correlated. it's right on top of each other.
5:37 pm
because those two car companies rely on f-150s and pickup trucks, as an indicator when you start to see the housing market really start to perk up. so i get why they're correlated. the housing stocks have been beaten up to a pulp. i'm still long kb homes and polte. >> they're scary. scared about the s&p? >> well, it does give you concern. i think obviously we know energy and materials led us over this big run we've had off of the lows. yeah, if we don't get the rotation out of energy materials, into some other park, like financials, financials could lead us. we need the financials to start to show it. we haven't seen that yet. >> we've got an earnings alert on hertz, falling in the afterhours. seema mody has the details. >> hertz posting a wider than expected first quarter loss. missing estimates on both the top and bottom line. worldwide car rental average fleet declined 4% compared to the first quarter of last year. fleet efficiency was a result of
5:38 pm
actions to reduce capacity. now, the ceo of hertz said we're encouraged by recent pricing trends as we move into the peak season. keep in mind, this has been a popular hedge fund position. >> seema, thank you. in the after-hours chart there, it is rebounding right now. >> terrible ride. i assume that the spin is on track. i'm more interested actually in the rental business. that would tie in with the home builders as well. that part actually interests me the most. >> still ahead, a major shakeup out of saudi arabia, declaring that opec is dead. he explains why right after this break. there's one biotech stock traders are making a huge $10 million bet on ahead of the earnings report tomorrow. we'll tell you the name later on in this hour. much more "fast money" straight ahead.
5:39 pm
♪ ♪ (singing) you wouldn't haul a load without checking your clearance. so why would you invest without checking brokercheck? check your broker with brokercheck. (p...that, you haveit, wait! yoto rinse it first like... baked-on? it's never gonna work.alfredo. dish issues? cascade platinum... powers... through... your toughest stuck-on food. so let your dishwasher be the dishwasher. e? told you it would work. cascade. perfect driving record. >>perfect. no tickets. no accidents... >>that is until one of you
5:40 pm
clips a food truck, ruining your perfect record. >>yup... now, you would think your insurance company would cut you some slack, right? >>no. your insurance rates go through the roof. your perfect record doesn't get you anything. >>anything. perfect! for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claim centers are available to assist you 24/7. for a free quote, call liberty mutual at switch to liberty mutual and you could save up to $509 call today at see car insurance in a whole new light. liberty mutual insurance.
5:41 pm
welcome back to "fast money." the move of the day. dropping more than 2.5% after initially being higher near the open. was it canada, opec? we've got answers with dennis gartman.
5:42 pm
dennis, good to see you. why do you think oil moves away today? >> really a very interesting day, wasn't it, mel. we opened up because there was great concern that the circumstances in canada were getting worse, not better. but by the middle of the day we understood that the wind had shifted, that the fire had been moved away from any -- it really is not going to touch any of the oil facilities. you've moved 80,000, 100,000 people out of the area. so it's going to be quite a period of time, a long time before you can get that oil back up and running again. but at least we haven't disturbed anything. you then also had the circumstances with the new oil minister in saudi arabia over the weekend, who made the stunning statement a month ago and reiterated over the weekend that we have to understand that perhaps in the next 25 years, crude oil may be worth nothing. technology will have us advancing to some new type of energy. he's very concerned about it and he wants to be a seller of crude oil to get whatever value they can. now, that's a long-term
5:43 pm
phenomenon. but you had the circumstances today with canada being less bad than people had feared. and the saudis coming at you. people walked in on friday afternoon thinking the fire in canada was going to get worse. bid the price up rather dramatically. it came off as the in news items hit the tape this morning and down went prices. >> does that make you change your view on oil? >> it depends on how long a term one wants to look at it. if you can trade crude oil now with a two-year risk reward, and looking out for the next 20 years, crude oil's doomed. if you're looking at crude oil for the next two, three months or so, given the continued problem that's going to be incumbent in canada, given the continued problems of venezuela, given the continued problems that are worsening every day in nigeria, if you only hf a two-week perspective, perhaps you want to be bullish of crude oil. depends what your time frame is. however, i do think that the
5:44 pm
saudis have told you with abundant clarity that the long-term trend of crude oil, the long-term prospects of that industry are really definitively bad. >> dennis, we're going with the peak driving season. look at the demand of gasoline, it doesn't seem to be there. look at obviously, i'm with you, i think the fire's had a lot to do with the general direction. although it's a human tragedy, i think those barrels will be back online sooner rather than later. but the spreads with gasoline, look at it, the commodity, crude oil and gasoline demand, doesn't that rattle your cage a little bit looking going into what is the peak season for gasoline? >> given what's gone on in canada, and that we really have taken at least 600,000 barrels of crude that comes to the united states out, maybe it's even worse than that, maybe it's even 1.2 million, that's going to make for a very difficult time here in the united states for the next several months.
5:45 pm
not a question about that. as i said earlier, if your perspective is the next 20 years, crude oil's doomed. if your perspective is for the next two months, you could actually make a case that crude could be tighter, especially wti relative to brent and especially in the front months. you could actually see wti go to a backward nation. we haven't seen that in a long period of time. just depends upon how close, how near-term or how long-term is your perspective. if you made me do something today, i would probably buy crude oil, but that would only be for a short period of time. a rank speculation. >> dennis, thank you. >> thanks for having me on, mel. >> guy, would you be with dennis on the short-term buy? >> i think the dollar is going to rally as well which hurts crude oil. i think crude's going lower. fundamentals haven't changed all that much. the fundamentals are still in place for a lower oil price. schlumberger, down 3% today, i
5:46 pm
think it's too expensive. i think a lot of these energy names got ahead of their skis. i think they sort of ratchet to the downside. >> where do you stand on the valuation of oil stocks? >> i agree with you. but, i think the direction of the oil is probably lower. i do think the correlation we saw early in the year which was so, so tight, i do think it's -- >> in terms of oil in the market? >> oil in equities of energy. i think are diverging a little. which is probably a good thing. >> right. turning now to solar city, which is absolutely tanking in the after-hours session, jackie has that story from the nyse. >> melissa, yeah, rough quarter indeed for solar panel maker, reporting worse than expected earnings. revenues they beat, a little on the bright side. second quarter guidance equally disappointing. looking for a loss of $2.70 to $2.80, 135 to 145 million. analysts not happy with those
5:47 pm
numbers. remember, as far as crude prices go, they've dropped. so have the solar stocks. with crude predicted to stay lower for longer as we've been discussing, this group could, of course, stay out of favor for quite some time. solarcity down more than 50% year-to-date. the stock is trading right now close to its 52-week low. which is $16 and change. >> thank you very much, jackie d'angeles. take any solar stock and they've had a rough ride. >> particularly the names that are absolutely leveraged. this is one of those names. you look at the short interest rate now in the float of this particular name. it's somewhere close to 40%. look at the leverage, see what their cash position is, and you see what their debt is. it falls into that same category we talked about at the top of the show. look at something like a sheneer or freeport, anything overleveraged has been having a difficult time. this is just one of them. look at the guidance, it's
5:48 pm
terrible. the fact that they're burning through canada, there's a lot of problems going on right now. >> it's so correlated basically to oil. >> which makes no sense. >> it shouldn't have been. but if you believe that obviously is lack of global growth, if you believe the commodity prices are staying low, there's not a real catalyst to buy solar stocks. >> when it rains, it pours. energy really low. a financing element here. >> solar's not good when it's raining. >> you have nevada becoming anti-solar. >> right. >> and then you have a high momentum stock, and that game -- it's all converging. >> still ahead, valeant shares collapsed more than 70% since the start of the year. can the new ceo joseph papa turn it around. we'll hear from him next. we'll tell you the other biotech stocks the traders are betting $10 million on, right after the break.
5:49 pm
5:50 pm
5:51 pm
5:52 pm
jim, this is not about the money. as i said, i love the -- this is an industry that does more good for people than any other industry, at least as far as i'm concerned. i'm a pharmacist by training. to me this is all about -- if i could play a small role in improving valeant that has a beneficial impact on the pharmaceutical industry, i think i will have done something that's important. that's what this is all about. >> welcome back to "fast money." that was valeant's new ceo joe papa talking to jim cramer in his first interview since taking over the company. why take the role? karen, you spent time today poring through the latest filing. they said they would file before the deadline. cleared up all the issues from the credit concerns. and the guidance for march. >> i was actually a little bit surprised they did that. although clearly they should have a very good handle on what that's going to be. i would think he would want to clear the decks and not be in the guidance game.
5:53 pm
massive job in front of him. i mean, i don't know. i still wouldn't touch it here. because i think so much is yet to be resolved on both the operational front, are these drugs really going to be sell in this new environment, when you see, you know, others trading horribly, and then the other part of it is, how are they going to resolve all of the regulatory investigations, the different ags, different states and federal one. and there's a lot of debt. so all those things, you know, i wouldn't short it. but i definitely wouldn't -- >> not to be in? >> laundry list. >> take a look at how the stock traded today. it closed down 6%. and it will be interesting to see the interview, and see how the stock trades tomorrow, whether or not -- >> i would guess it pops. >> ackman e-mails that were part of the -- today's -- >> they were horrible.
5:54 pm
i mean, the e-mails. >> i think the stock continues to grind down. i wouldn't be surprised if we didn't see 26 bucks. i think that was the recent low we made. again, karen just talked about it, there's too much headline risk. you can't turn this around on a dime. it's not going to be a turn-around story tomorrow. i still think the path of least resistance of the stock is low. >> you won't hear great news tomorrow. guys close enough with 26. use that as your stop. but i do believe this thing has a couple of bucks, and a couple of bucks in this name is 20% to the upside. i do believe there's a risk to the upside. >> all right. be sure to tune in to "mad money" next. it will most likely be stock moving interview for tomorrow's session. that's tonight 6:00 p.m. eastern time on "mad money." sticking with pharma, allergen with their earnings report tomorrow.
5:55 pm
mike? >> so $10 million would only buy you a little less than 50,000 shares of allergen. what it bought one trader was 10,000 august 210, 230 call spreads. that controls a million shares of stock. basically this happened when the stock was trading just under 215. this is targeting a move to 220 or higher by august expiration. they'll be announcing earnings tomorrow. typically the stock moves 7% on earnings, that's what they're currently implying. this is one way to make a levered bet to the upside. >> we're singling out endo last week. a lot of these stocks falling as well. not necessarily because they have the exact same business model, but they're a big hedge fund holding. all those are being squeezed. >> i didn't think it would break 220 on the down side. i'm sort of in the -- mike's within spot-on. mike's been on, or whoever he's following -- >> axelrod. >> this was his pick.
5:56 pm
>> kudos to seeburg. >> thank you. more "options action" on friday. 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. the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris.
5:57 pm
all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t. came courtesy of james and patricia thompson. this tv? margaret and tom lee. the championship game ball? that was sebastian diaz. good guy. and all i had to do was ask for their money and pretend i was investing it. their life savings is now my lifestyle. female announcer: don't let someone else live the life you're saving for. find out if you're dealing with a registered investment professional at investor.gov. it's a great first step toward protecting your money. before you invest, investor.gov.
5:58 pm
todd spaletto, president of the north face, we are working on the prototype to match customers to gear. watson, let's give it a try. say it's mid-june and i'm backpacking in yosemite. of our 353 jackets, i can recommend nine. watson, what if it rains? there is just a 3% chance of rain, so i recommend the breathable stretch fleece fuse form dolomiti jacket. a perfect choice watson. no wonder our customer loyalty numbers keep climbing. i believe we can do even better. i like the way you think.
5:59 pm
time for the final trade. pety? >> saw paper today in nokia. they're buying the upside calls. >> that is name we have not mentioned. in a very long time. >> crude. i believe crude is rolling over. xle, a seller there. >> karen? >> north star realty finance hoping for a better deal than this. i will take this deal. or the talks of this deal actually. sold by nrf. >> you see a lot of crazy people. you know the -- >> yeah. >> america's cup. >> a gold trader. >> they're like, you know, because they came up. melissa from "fast money."
6:00 pm
>> i'm melissa lee. thank you for watching. including the new zealand america's cup. more "fast money" tomorrow. "mad money" my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to cramerica other. people want to make friends. i'm just trying to save you some money. my job is not just to entertain but to educate and teach you. how can some stocks. some stocks be so hated on a friday and then so loved

10 Views

info Stream Only

Uploaded by TV Archive on