tv Fast Money CNBC March 3, 2016 5:00pm-6:01pm EST
reflection of what was going on in this country. >> i know you can do it, carol. that does it for "closing bell." "fast money" begins right now. "fast money" does start right now. overlooking new york city's times square. i'm michelle lee. tonight on fast, the second biggest bull on the street is here. and he says s&p 2300 is in the cards. plus, shares of disney jumping after the ceo said what could be next at the magic kingdom. the sector that was one of the past month's biggest gainers could this year's biggest trap. why this rally could be the ultimate head fake. but first, we start off with the markets. managing to eke out a winning streak. up more than a percent. financials continue to gain. aside from these moves, things
were unusually quiet, with the average moving a fraction of a percent. volume at year-to-date lows. is this the ultimate bull/bear showdown ahead of the jobs report tomorrow? is this the calm before the storm? guy? >> i say absolutely yes. i think we've been pretty consistent with this. i think the market's going to continue to rally. i think it rallies tomorrow regardless of whatever number comes out at 8:30. i do think there's a chance we touch 20, 25. i think we're going to fail there. a couple of interesting things here. exxon mobile down on today. crude is now shrugging off potentially bad news going higher. i think the obx is going to have one of those days that it had a couple of weeks ago. this time opening on the lows. closing on the highs. that coincides with the s&p at 20, 25. >> in this showdown, the bulls are the temporary at least winner in your view. >> they've been a winner, yeah. >> yeah. >> definitely the winner right
now. i think going forward, right now people are just tremendously fearful of being short the market. that theenl will stay in place. tremendous amount of economic sort of news coming out over the next several weeks. people are playing against it. they're thinking that the risk is to the up side. people are covering shorts, you're seeing it in the beaten-down sectors, playing it from the long side and waiting that sort of game out. i think the bulls are in control right now. i think there's not a lot of upside left. i think we grind a little bit higher and lay out your shorts. we're getting to a point that i think we've probably overdone it with certain sectors and certain names. >> also fearful to be long, i would posit. look at the gold trade today, up almost 2%. >> the ten-year yield. going into the events that david is talking about, the boj, the u.s. fed, all in the week of march 14th. so to me, the jobs number tomorrow sets up really poorly for u.s. equities. you probably get to the 200
moving average. consistent about 20, 25. at some point, if you can't get through there, and continue to act like it has since tuesday's rally, i do think you set up for a move where people start thinking about the macro again. listen, it's been my view, and i've been wrong the last couple of weeks for the direction of the market, but i think if we go back to the february 11th lows, we'll go through a hard, hard way, with the divergent policy. i think a strong jobs number puts the fed in a mind. expectations of them having to raise, i think that's bad for the -- >> either way, they sell the number tomorrow. >> either way they buy. >> yes. i think either way they sell the number tomorrow. goldman sachs outperformed again today. they're still buying the junk. sell the bounce. 1963 to 2000. i definitely think you sell the market here. banks were the late ralliers,
but still the junk. >> it's not the fed people are focused on, it's the ebc. they're worried about more stimulus coming out. you play from the long side in the short term. >> i disagree with you. monetary stimulus is not working anymore. they're doing it in europe and they're doing it in japan, and they're doing it in china and it's not working. look how financial stocks all over the world are acting. see how it seeped into our financial stocks. think about what's most important to me, as we get into april and we have the fed stress test, they already told our banks, tell us what your ratios look like with negative rates. >> they're going to have some sort of stimulus. it's getting people scared to death. that's why they're repositioning. it's absolutely having an impact. i'm not saying it's going to have a long-term impact, but short term -- >> if you see 2020, what sorts
of stocks are the best from here to that level. >> that's not that far away. >> it's not. >> i think the energy trade is probably getting long in the tooth. i do think crude overshot to the upside. i think we're headed lower. i think people are trying to plow into banks now thinking they'll play catch-up. i think that's wrong. what can overshoot to the upside from here? i'm not sure. health care's been under pressure a little bit. maybe reversing to those levels. what i think will happen, though, i'm in steve's camp. he says sell the number. i say rally first, and sell the day. >> materials has to be -- if you believe in another leg, it still has to be -- >> they have to continue? >> $9 name. so people are forced -- >> you want to see the jump in order for us to have the next leg higher. they have to continue to participate. >> they have to. because on a leverage basis, guys are getting hurt the most on these.
these shorts are killing them. just a couple of weeks ago, freport was a $3 name. guys are forced to cover these names. the highest shortage risk, rallies as well. >> the next guest says stocks could be ready to take off. let's go running with the bulls with oppenheimer, one of the bullish strategists on the street. $300 price target for the s&p 500. great to see you as always, john. >> great to be here, melissa. >> what is the catalyst at this point? because we've had a lot of bulls on over the past few days. and it seems like the running theme is that the catalyst is that things don't really get much worse, and they just sort of stabilize. >> i think that actually, they keep getting better at a creeping kind of rate. it's a larry david kind of market. you've got to keep your enthusiasm curbed. you know, curb your enthusiasm, right size your expectations. you just might be positively
surprised. what we think here is we keep seeing an improvement in equities. we expect it to be tested, this rally from february 11th has been a very powerful rally, in consideration of all the worry that began from early in this first quarter. we think much like last year, we see fundamentals, the economic story is getting better. it's not great. still some disappointments. you know, the -- you get consumer sentiment, it's come off the recent highs. services was a little bit weaker than expected. >> sure. >> but net, you're still better than before. you know, we're coming out of a particularly ghastly period, and we have a -- we're dealing with a transition. >> sure. >> of technology disrupting commodities, the workplace, and the competitive environment in corporations. >> john, let's say you're right. let's fast forward, 12 months from now. we're at 2300 on the s&p 500. which sectors will have been the
best performers at that point? >> i think it will be the cyclical sectors. my favorites include industrials, materials, technology, consumer discretionary. financials just this week, we went from an outperform to a market perform. primarily because we still don't have any kind of a sweet spot on the yield curve. so what we're looking for here is really the financials to play second fiddle in essence to the other cyclicals. >> john, we talked about the incrementally better data here in the u.s., i don't think anybody's particularly surprised by that. the services number we saw last week, that was disappointing. isn't it more about emerging markets in europe right now, and just given how much of u.s. corporate earnings come from overseas? we have the dollar where it is. isn't that the main story here about s&p earnings for 2016? >> i think related to the s&p 500, it certainly is a
significant component. but at the same time, we're seeing companies hunker down in this situation, related to the emerging markets. and when you talk to people who are in the emerging markets, what you see is that companies that are operative on the ground there, are doing really -- they're seeing the economy's doing better than expected. i can't help but just think that in the last week, we've heard in the press, melissa and bill gates mention that things are improving in the emerging markets. and i think from your other guests, as well as from myself, what you'll hear is the consumer class is getting better in the emerging markets. the real problem for them is exportation, for the energy producers, it's a problem, and there's overcapacity. but the u.s. economy is 70% tied to the u.s. consumer. exports are only about 13% of our gdp.
>> right. >> i think we're in a pretty good spot here. you can't get too enthusiastic, but it does look like we do better at about a 15% gain for the s&p 500 from here to the end of the year. still a possibility. >> all right. back to larry and david. john, thank you for joining us. again, second biggest, 2300 price target. >> i didn't go to harvard, but i did take math in college, so 2300 in the s&p, if the s&p is going to make 120-ish, that's a 19 and change multiple. in this environment, it doesn't make any sense. there should not be a 19 -- >> what are you selling? >> not if it's up in terms of earnings. if the earnings ratchet up, that changes the inflation. but with that said, i don't think we end at 120 either. >> you want to talk about multiples, the market has been buying multiples around 16 1/2, selling them at 18 1/2 times. there's probably no way if we -- >> we have to break out of the
mold. >> yeah. we're not growing revenue. here's the deal. companies create synergies to figure out how to drive earnings. but at the end of the day there's no chance we come close to that. 19 times earnings is insane. i think earnings are going to be ratcheted down before they go higher. >> look, he made a patented overgeneralization about companies on the ground in emerging markets. that's not the case. one of the first largest economies in the s&p, one of the first to report earnings was intel. they rattled off a whole host of words that they're saying. he talked about cyclical tech. intel is the poster child for cyclical tech. i don't think what he said is a hundred percent accurate. >> do we not have any buyers of the 2300 price target? wow, across the board. look him up on the google machine. >> i'll do that right now on the break. >> in the meantime, coming up, one group of stocks after bank of america changes its tunes.
plus, disney shares surged 15% off recent lows. the reason why might surprise you. we'll tell you what's driving the growth at the media giant. the most hated stocks are turning into this year's darling. we'll tell you which names are about to join the pack, and if you should be chasing those rallies. much more "fast money" still ahead.
it's a fact. kind of like social media equals anti-social. hey guys, i want you to meet my fiancée, denise. hey. good to meet you dennis. we're always looking for ways to speed up your car insurance search. here's the latest. problem is, we haven't figured out how to reverse it. for now, just log on to compare.com... plug in some simple info and get up to 50 free quotes. choose the lowest and hit purchase. now...if you'll excuse me, i'm late for an important function. compare.com. saving humanity from high insurance rates.
♪ no, you're not ♪ yogonna watch it! ♪tch 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. welcome back to "fast money." we've got a news alert on the battle between apple and the fbi. let's get to josh in san francisco with the details. josh? >> reporter: well, melissa, a number of tech companies in silicon valley are filing briefs today in support of apple in its fight with the fbi. that deadline to file now less than three hours away. twitter, along with 16 other tech companies, that included
air b and b, linkedin and square came to apple's side. they argued in a joint brief that the government does not have the authority under the act to force apple to rewrite its own software. in addition, intel and at&t filed. we are waiting from microsoft, facebook and google parent alphabet, all of whom plan to file in support. missing from the list, samsung. samsung has told the press that customer privacy is extremely important, but that the world's largest smartphone vendor has not decided whether to file a brief in support of apple in this case. cnbc did reach out to the company for comment. no word just yet. that deadline to file is today at 5:00 p.m. pacific. melissa, back to you. >> josh lipton, thanks so much. interesting to see how all these tech companies are rallying to apple's defense. there was a case a couple of days ago, facebook executive in brazil who was arrested. the authorities want it to open
up a message in order to build a case in a drug trafficking situation. >> you know, it's funny, we talked about it right when this thing came out. i was surprised facebook hasn't been in the news on this situation. i would have to guess this gentleman had -- not going to call him a gentleman, this guy had -- this terrorist had this app on his phone there. as far as apple's concerned, they've dug in here. the fact that as many people as can come to their aid as possible, it's better for them. >> bank of america coming out with a note turning positive on the group of stocks. the firm seeing the most value in marathon petroleum, giving them both buy ratings and giving va lero neutral ratings. those were all upgrades from previous ratings. >> i think we've seen a nice move in the space, since we saw gas -- demand for gas pick up. you look at it and say demand for gas, lower oil for longer is a tail here, saying you've got to buy the refiners. they're going to make the move
higher. they've had a move higher. frankly, i read this report and i believe it's more of a cover your shorts type of call. i don't think those are going to be out of the gate, taking off to new highs. i do like the coastal names. the valeros of the world, i take a look at that. the other names i would stay away from completely. if the oil does rally, the risk is you can't get the cheaper oil. so the coastals actually benefit. i would probably be with valero for the long term. for the short term i might wait for a pullback before i jump in head first. >> interesting time they get this report. they had a conference today with all the refiners reporting. i know we're conspiracy desk. but it seemed a little bit -- >> a positive note because they're having a conference in which -- >> i don't want to accuse anybody of anything. >> you're just putting it out there. >> and the conference is today.
you guys do the math. >> all right. >> i think if i'm going to be in the space, i'd rather go e and p. exxon mobil is not going to move. look at epx, the index. >> up next, costco and kroger getting a hit. kroger is down 7% after it reported weaker than expected sales. both stores pointing to the warmer weather as a factor during the quarter. dan? >> listen, costco has been a massive outperformer. they've been killing walmart and target, who kind of cater to a slightly different consumer. but what's happened here is these -- this was really bad. i don't mean really, really bad, but there was a whole host of things. fx hit them. lower gas prices. they sell a lot of gas. that hurt the numbers here. there's a lot of things to consider when you think about a company that's only supposed to grow earnings, trading at 27 times. when you think about a target or
a walmart that has actually been stuck in the mud a bit, they traded a much lower multiple but don't have the same groethd. if you get target back in the mid-70s, i think that's the way to go. >> i think it's actually that the s&p traded down to 1810, give or take. there was kroger for the fresh market, the headline came out. amazing the recall. it's like -- >> when you get so many other things -- >> scary, actually. >> i've got to tell you something. i've never said that. it's actually hung in there pretty well today. you wonder if this forces kroger's hand a little bit so they come back to a table they might never have been at. i think tfm is pretty interesting right here. >> look at costco. the costco numbers are not that bad. this company's actually, i think, finding the right path. i look at it and say, costco in general -- that was kroger, by the way, my apologies. costco, when gas prices start to move, what's the impact on their margins?
everything they have in the tanks, they're going to benefit from. the margins are actually going to pick up. i believe lower oil -- >> the problem is, costco's earnings were 10% skewed to the upside because wholesale prices of gasoline come in a lot more precipitously than the retail. >> right. >> that was a skew that people probably didn't realize. so as that normalizes, their margins get compressed. costco probably still goes lower. >> coming up, disney hosting its annual shareholder meeting today. what the ceo said about espn. and we'll bring the comments next. i'm melissa lee, and you're watching "fast money" on cnbc. here's what else is coming up on fast. >> it's a trap. i must keep this to myself. >> frank underwood may be keeping it to himself, but we aren't. we'll tell you the one sector that could be setting up as the biggest value trap. and how you can protect yourself. and later, some of the most beaten-down stocks in the market are suddenly surging.
money." disney "annual meeting wrapping up earlier this afternoon in chicago. julia boorstin is here in the flesh to talk about it. >> melissa, great to be here. the big news is, disney gave up the numbers on the resort business. they have new massive cruise ships under construction. they'll be completed in 2021 and 2023. and two more "star wars" films in the works. visitors will be able to experience what it's like to fly the millennium falcon. the reelection of the board members was approved. two proposals were rejected also as expected. the big hot topic for the q&a portion of the meeting, an issue that has been weighing on disney shares. >> espn is a healthy business, and a large business, and exciting business and a growth
business. will it grow at the compelling rate we've seen it grow in the last 15 or 20 years into the future? probably not. but still should deliver growth for the company long term. we're not in any way taking matters lightly in terms of speculation or what's been said or what's believed to be the case about espn. >> iger stressed disney is looking for new ways to bring espn and disney's other brands to consumers. >> when iger talks about a growth business and espn, does that take into account the subscriber declines or losses? because the piper jaffray we saw in disney today, 120, they said espn is going to -- that the subscribers numbers will go up in the future. >> advertising on espn increased to help compensate for the declines, in subscriber numbers. he's talking a lot about taking espn in its digital format. if you subscribe to cable, you
can watch espn wherever you go, on the go. i hope they -- i think they believe that will increase total viewership. and they're looking for other ways to build out that business. in all the different ways they can reach consumers through mobile especially. >> how much do you talk about "star wars"? what we've seen so often with a lot of the "star wars" related trades, imax, disney, have ramped and after "star wars" it was a sell event. >> there was a lot of talk how "star wars" is not just one movie. they have another one coming out in december. and they're working on many other "star wars" films. i think iger wants to keep the "star wars" train going as long as possible. if they can keep on releasing one film a year, it will be a way to maintain the consumer products. "star wars" is not just about the movies or consumer products, but they have it in the parks. it will drive a lot of people to the park that may not have many other reasons to go. >> i'm sure guy wants to know
what it's like to fly the millennium falcon. >> i already know. >> i've never seen the movies. but i'll tell you this -- >> i'm being honest. it's there, for crying out loud. >> okay. >> he's a hundred percent right, the growth in the espn is not going to be as robust as historically, right? the stock got revalued. we traded down to 14 1/2 times forward earnings on february 10th. steve said it has to hold 86 1/2. it traded at 86 1/4 that day. that reversal is viable. what's the right multiple? it's probably right here. >> you're an owner. >> i'm still an owner. i added on the way down. for me, i would look at this as, is it a fair price? i hope not. i hope that trades higher. i see the sell levels, 105 basically to about 108. you're playing it right now for seven, maybe another 10%. to see how it shakes out.
i do believe without espn, i do believe in the skinny bundle. they're going to have better margins, and he's concentrating on parks. $16 billion from parks. i think he's concentrating on the rights things. >> what don skipper would say about espn is they would be included in the skinny bundles. >> that's right. i think even in the negative -- even in a world of skinny bundles, they'll do better than the rest. >> julia, great to see you. >> great to be here. still ahead, the pain trade no more? some of the most beaten-down stocks are all of a sudden soaring. the one rally you don't want to chase. we'll tell you what it is and why one technician is sounding the alarm.
at mfs investment management, we believe in the power of active management. by debating our research to find the best investments. by looking at global and local insights to benefit from different points of view. and by consistently breaking apart risk to focus on long-term value. we actively manage with expertise and conviction. so you can invest with more certainty. mfs. that's the power of active management.
there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be. when it comes to the fithings you love,. you want more. love romance? get lost in every embrace.
charge as the best performing sectors. here's what's coming up in the second half of "fast money." hurlts so good. some stocks are suddenly surging. plus, hewlett-packard enterprises surging after hours. we'll hear from ceo meg whitman on what drove the quarter. financials surging more than 4% this week alone, making it one of the best performing sectors. up more than 12% from its recent low. our next guest says it may be time to fade this rally. let's go off the charges with ari with oppenheimer. >> hi, melissa. for the financial sector, we're not buying here. we see this as a sell on strength sector for the very simple fact that we expect performance in this group to remain anchored by low interest rates. let's look at some charts. first, the correlation between the two. the orange line here, teyear u.s. treasury yield, blue line financials relative to the s&p 500. we can see as rates fall,
financials head to underperform. and vice versa. but with interest rates approaching a very critical level at 2%. we think that is where financials relative performance also comes into line. let's get into some longer term views here of interest rates. it's a very integral part to how the sector performs. and here's the long-term view. what do we have? we have a 30-year downtrend. we have an 8-year downtrend. we have a 2-year downtrend. very difficult to make the case that interest rates are going to stay higher. we're right at the lows. rest assured the bottom of this chart is not support. grs in fact, to make the case that they can go lower, look at how u.s. 10-years are versus the ultra lowly rates in germany and japan. we can make the case that that 2% relatively a relatively high level. we think u.s. rates in position to play catch down. how do you trade it?
here's the financial ticker, xlf. rally going on here. nice surge. a little bit of a bear market rally. i think if you are in this stock, you can stay high above that breakout at around 2170. but as you get up to $22.90, there's an important retracement level there, with the falling 200-day moving average, we'd be looking to sell it right there. >> what happens if interest rates stabilize here and don't go lower, don't go negative? can we hold on to the gains that we've seen? >> i think that is the best case for financials. the best case is rates moving sideways, a market performer. i just don't see the risk/reward there when the trends don't support that just yet. i'd rather place my bets elsewhere. >> ari, thank you. ari wald of oppenheimer. you've been in financials, what is your -- >> still in bank of america. >> what is your case for staying in with the most recent rally? >> i think it's a tradeable stock right now. bank of america for me, it's
approaching that balance level. 14 1/2 in bank of america. but they're all approaching their balance levels. goldman down 13%, bank of america down 20%, if you look at all of these, you want to sell them around the 50 and the 6-1 retracement. they're all right here with the dollar. >> are you selling? >> i'm selling. >> you're going to sell? okay. >> let's listen to bill gross today. it was on your program today. >> you said it better than he did. there will be akin to the utility stocks without the yield. we don't have the dividend yield. i agree with ari's charts a hundred percent. if you get it up opening tomorrow, the next few weeks, all it will be is about lower rates. i think you can sell the u.s. banks. i think the xlf sets up well for earnings in april. fed stress test.
>> do you sell them here, though? they've been beaten up so much on concerns about, you know, the energy tapes. you know, ripping apart their balance sheets because of bad loans. maybe overblown. probably overblown. do we continue to move up toward that 14 1/2 level? >> up 14%. >> i know. but we got smacked down in a short period of time because of concerns about the loans. those concerns are so overblown. in my opinion. >> it's not just energy loans here in the u.s. we had jamie dimon talking about it earlier. it's about europe. it's about global commodity prices. >> wait a second, do you think oil is going higher or lower? >> i think oil's going lower. so it doesn't matter, because here's the thing. because the way they've priced these assets, there are very -- there's never been a case really that i can remember where you had a first line loan in some of these big commercial banks that they've lost money on that transaction. it may take them a while to sell the assets. that's on my side.
six months, nine months, a year. but i can tell you right now -- >> i think oil takes another leg lower. >> it depends on your time frame. you have to look at the most recent bounce. is that worth holding on to at this point? in this case. >> quickly, we started the show talking about the fed and what they're going to have to do. get a good number tomorrow, it will force them to raise rates. but it only moves the front end. did you hear what ari just said? the back end's going down. the yield curve is going inverted. that's not good for banks. i still think banks go down to 1.25%. they don't control anything but the front end. >> i think you're going to have, like you said, a trading vehicle right now. if we have a blowout number tomorrow, if there's some stimulus coming out of the ecb, you're going to have a trade based just on sentiment alone. not saying the rates will go higher, just on sentiment alone that will take the space up.
hewlett-packard enterprises, the details from the call in the newsroom. seema? >> hp enterprise completed its first full quarter as an independent company since it split. meg whitman said it's already seeing the benefits, saying customers better understand the company's strategy. the ceo of hp enterprise said its innovation engine is firing on all areas, which is driving strong results. now, comments on the tech giant's cash flow, affected by seasonality and timing. but it does expect cash flow to improve as they move into the year. hp also reiterating its commitment to returning cash to shareholders. and that share repurchases will be the preferred method to return capital. whitman also had positive comments on china. and its deal with xinhua. listen in. >> as we've discussed before, we are seeing strength in china, as
customers anticipate the completion of the deal with xinhua that we announced last year. we're working through the final regulatory approval with china and expect the deal to close by the end of may. >> up about 6% after hours. the company did report better than expected earnings. keep in mind, melissa, the stronger dollar continues to be a good headwind for the global player. >> thank you. >> it goes toward stock repurchases. that's good news for the stock. it's dirt cheap. like 70% or so of book. all the metrics aren't expensive. the bad news is, there's really no growth here. the earnings growth is just not there. can the stock continue to grind higher? i think so. but there's not a lot to be excited about there. >> go pay head. >> hpg or hpe. >> hpe. i'd rather be on meg's team. that's meg whitman, by the way.
i'm not on a first-name basis. i apologize. >> but you just made yourself. by the way, guy was wondering about growth prospects for hpe. hpe ceo meg whitman, ms. whitman, will be on "squawk on the street" tomorrow at 9:00 a.m. eastern time. so you won't want to miss that. especially in the back of the 6% pop in the after-hours session. still ahead from trash to treasure, some of the most hated stocks in wall street last year, are leading the markets higher this year. the four names that could be next. plus, shares of solar city soaring today on rumors involve ing elan musk.
there are a few names outperforming the markets in the recent rally, not your usual suspects. joint global, all seeing huge moves this week. despite falling 88, 77 and 86% from their highs this year. if there's hope for these names, what other beaten-down stocks could see similar rallies. hurts so good trade. dan, take it off. >> listen, my view is simple. you want to be very careful, you know, chasing some of these stocks that are highly levered.
it's a performance chase, especially after you've had this large broad market rally. to me i think there's a lot of risk. if the market turns, these things get hit very hard. if you want to play this sort of thing, you may want to look at the xop, similar to the names that they just listed there. this s&p oil and gas etf is down from $82 two years ago, down to about $28 today. really steep downtrend here. it has the potential to run. you're not going to get the sort of torque that you had those names that you just listed. you don't have the aid yo syncretic lift in the single stock. >> the most intelligent thing in that whole thing, is things are very simple. i agree with that. i mean, but this sucker was 83 and change. now it's trading 28. it's had a bounce. you've seen bounces of this magnitude numerous times in the last year and a half. >> yeah. >> i'm surprised at you, dan nathan. >> here's the thing. this wouldn't be the sort of thing, if you really do think
oil's going to move, a lot of the other etfs we talked about, heavy levered to let's say exxon, chevron, there's a hundred stocks in the etf, not one has a single 1 1/2 weight. >> the opposite of all dan's trades, though. as guy pointed out, over 20%. i get what you're saying from the risk perspective. >> i don't agree with it, but i do understand what you're trying to say. >> let's see if everybody likes -- >> not one that's -- one that's gotten quasi pummeled, apple, but not in that space that had the incredible pop. apple is only up 9% from the recent lows. so i'd rather bet on apple continuing to move forward investigate us a freeport, or let's say an xlp. >> so it's sort of like a slow and steady sort of thing? >> yeah. i feel like it's coming back. even though people have talked
about iphone peak sales, i'd rather go with -- we talked about stocks that got pummeled and ready to rip back. this one -- apple's got -- >> they got pummeled all right. >> the market hangs in there. up 10%, 20%. >> what's your pick? >> i chose jcpenney. the stock that's been totally derisked. i understand the problems they have. they get a big, you know, loan to repay iing to 2018. i think the new management team's got their eye on the ball as far as restructuring this company. they've got brand loyalty. i think this will be a company that you'll look back five years from now and say they didn't go bankrupt. i know that's the big concern. >> or go out of business. >> i don't think it's out of business. do you need jcpenney or not? i would suggest most analysts on the street would say you need jcpenney because of their off-brands.
>> it's up 62%. >> haven't we seen the breakout in this already? >> no, i think management shift is going to occur. we've seen breakout, no question. but look at the long-term charts. go back four years in this stock. >> i wanted a stock that got pummeled and ready to breakout. you said a breakout on top of breakout. >> we're talking about a long-term break-up. >> guys, come on. go. your turn. >> all right. i think i did it right. >> okay. >> lion's gate. let's talk about this. this stock that hurt so good is $44 stock. it's been cut in half. i think you had the capitulation february 16th when it traded 16 and change on monster volume. i think the reason it sold off, people said to themselves, how can lyons gate trade when disney is trading at 14. a couple other reasons as well. i've always been a fan of michael burns. he will figure this out along with the rest of the management
team. i think lions gate goes higher from here. hurts so good, baby. lgf. >> it was down 35%. >> you're all right. >> it wasn't you and i. >> i feel better. >> i'm going to think about this. stop playing that song. it's awful. we're going to go to break. coming up, is there a crack in musk's empire? why rumors for so lar city for the billionaire.
welcome back to "fast money." so lar city shares surged today. vague rumors around the marketplace that elan musk would take the company private. he's already got about a 22% stake in the company. dan is over at the smart board breaking this down. >> at one point it was up almost 20% on the day. two and a half times daily average volume. a block of calls were open when the stock was at 3600 of the april 25 calls. they break even at april expiration at 2710.
up about 18%. about as much as the stock was up today. when you think about what's going on here, obviously the stock has been depressed. it has the sharp move into the end of last year. it's been going down. here's the move here. the stock, ipo'd all the way back in late 2012. $8 here. it hasn't been on a fantastic run, if you just look at the downtrend. but here's the thing, it's got about a $2.2 billion market cap right now. growing sales at 50% a year. they lose a ton of money on those sales is the problem. the shift fits into mr. musk's whole world view, as far as renewable energy, and that sort of thing. but here's the thing, how do you play this stock? if you wanted to find your risk with options, options prices are really high. so people are either playing for much lower lows, or a squeeze higher, like mel said, 38% short interest. elan musk owns 22% of it. he can take this thing private with private equity pretty easily. but it's going to be a
money-losing thing for a while. >> take a look at the forms of the stock. down by about 56%. we said this time and time again. solar has nothing to do with oil, except that the charts do. they do correlate. so whatever you want to say about how much electricity generates from diesel, which is 2% of the world's electricity, there's still a correlation. >> recently you've had diversions. but to your point, it's been almost a 95% correlation. how do you trade that stock? with that rumor out there right now, that short interest, i don't think you can shall short this stock. because another headline like that comes out, up another 10%, 15%. this is the classic, i'm talking my ball and going home. that's what you've got in solar city. if you want to be in a name that makes more sense, it's tom warner's sun power. >> yeah. >> what do you make of this in general for elan musk? this would be a pretty big venture for him to get involved in. >> i think it would. but every time we think it's too
big for musk, he does something. everything elon musk has done has peaked. >> do you think his days are over? >> i think so. >> i am just so in disyemt with you. i think this is a guy whose best days are ahead. whether you agree with how his projects get funded or how much money they lose or whatever, the guy is really doing multiple things. >> i don't think he's a bad guy. i'm just saying as far as stocks he could be behind that he's the top holder in, i think that -- >> let me -- hey, steve. i think solar city has -- i think he's a great guy. >> the next bull market cycle, space x is going to be the biggest ipo you've ever heard of. the guy's got another act. >> the other thing you have to realize, the investorship from energy holders to technology holders in this space has been
tremendous. so they buy into that. they buy stocks for different reasons. so you see a real shift in that investor base. that will keep continuing. >> is that a good shift? >> i think it's a good shift, because they buy stocks for different reasons. they're buying stocks for different reasons, different growth opportunities. you could bake in different multiples for that reason as loan. solar city, i wouldn't be short this stock. i agree with guy a thousand percent. trade, long-term, not something i would jump in and buy, but i look at tesla, i love that stock long-term. >> check out the bull show tomorrow, 5:30 p.m. eastern time here on cnbc. coming up next, the final trade. 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 anticipate potential price movement. there's no way to predict that. td ameritrade. in new york state, we believe tomorrow starts today. all across the state, the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in buffalo, where the largest solar gigafactory in the western hemisphere will soon energize the world. and in syracuse, where imagination is in production. let us help grow your company's tomorrow - today - at business.ny.gov
idiosyncrasy and complex metaphors. i know every detail of every public quarterly report in the last 20 years. and i'm just getting warmed up. hello. my name is watson. together we can outthink the limits of what's possible. welcome to the cognitive era. time for the final trade. dan? >> biotech stocks outperform the s&p in the last month. but the bounce is running out of steam. sell the xpi here. >> apple, bounce not running out of steam. probably another 10% or 15% from here. >> steve? >> seaburg, i would be a seller
here. >> the fresh market. >> i'm melissa lee. thanks so much for watching. see you tomorrow at 5:00 for more "fast money." don't go anywhere, "mad money" starts right now. 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.