Transcripts For CNBC Fast Money 20160217

The markets and stocks soaring as the dow, s p and nasdaq saw their biggest threeday gain since august of 2015. Get this, since the august flash crash weve seen very similar eerily rallies where stocks surge only to return to new lows. So can you trust the rally this time around . Guy . Well, youre going to trust it if it closes above 1950. 1920, i didnt think it would get here on whatever today is wednesday so it got here. 1925. The bears needed to prove themselves on thursday, unable to do it and now the bulls need to prove themselves at the levels were currently at. 1925 to 1950. One of the things that we did say yesterday was the reversal in the Oil Volatility index, ovx made a change and closed on the lows and though crude closed unchanged yesterday it should be a bullish sign. For today that held true. Api stats out now, big drawdown and crude should rally again. Maybe we get another 20 handles or so on the s p. I can see it trading to 1950. I think it will fail if it gets there. How do you feel about the threeday move . Have you done anything today . Today selling a little bit. Sold it to the ralies. Sold a little bit into the rally . If the volatility index comes in more, then maybe ill buy some puts but its still too expensive. Its been a big, big rally. I feel more comfortable on the other side when things trade down in integers you feel like they are getting puked out and i think the puke is over for now and i id actually be selling into it. B. K. Ers . All the things that keep me up at night havent changed with the market is 40 or 5 off its low or it goes to 1945 which could happen at months end. You have a countertrend real, still in a bear market and you saw it from the august flash crash and countertrend rallies and the lower lows and lower lows and i think that will be the overriding theme this year going on, so, yeah, i would fade it into this. What did i do today . I just stayed hedged on my bearish positions and put them on about a week and talked about them here on the show and we stay that way in the end of the month. I think a lot has changed. When i look at it. I think about also whats happened with oil, first of all, can i make a very strong art that oil is the dog and Central Banks are the tail, and i think about the ecb back in january of 2015 which was forced by the essentially the deflationary elements of oil to overextend and overpush. I think oil is an enormous part of what is different now. I think banks are a little bit of looking to decide the Balance Sheet and understanding where banks are. Again, this is probably more about earnings quality, but i get why were asking the question after an enormous move in markets and why does it have to be one or the other . To me markets will be sideways and extremely volatile for a long team. Do you sell the threeday ral . Ultimately there are things you do. Volatility, vix down near 20, 21 is a place to buy. Iwm, the russell, which has been very volatile, threw some of those puts out there today. I agree with karen. I want to trade this round. I have a long book and things to protect. A great place to do it, but i dont think markets you know, 1810 to 1950 to 2000 is where we are in the s p. Until proven otherwise thats a choppy range people should accept. Lets go one step further on that. In terms of the things that weve seen rally the most in the past three days, which rallies do you think are the most specious. Might be the banks. You would you would fade the banks. Like Deutsche Bank, and then the other side of that coin is names like freeportmcmoran, ill be honest. When it was a 4 and change stock it was headed to 2 and change. Steve grasso took the other side and here we are at 7, but i think thats gotten way overextended to the upside, as i think banks have. The move in Deutsche Bank i understand. I see whats going on there, but i think theres going to be an opportunity to sell that as well. An interesting day tomorrow. Well see if oil after these stats, after todays action can hold on to the gains were seeing in the aftermarket. I dont think the banks are overdone actually to the upside. Not selling any of those because i think they were so ridiculously done to the downside, you know, the intraday from the low has bounced a lot, but if you look at jpmorgan, still down a lot. They will have investor day on tuesday, and so i think thats potential catalyst for jpmorgan. What is the catalyst for the next six months in the curve, flat rates, negative rates around the world and an equity market and capital market. You leaning harder to shorts. Yeah, thats the first thing i would have said in this. The banks underperforming i think are a telltale sign that were still going lower. So i would lean into that. What do you do with a Deutsche Bank, which has rallied 20 into the face of what everyone thought was going to be a major liquidity crisis and something weve learned over the last few days is Deutsche Bank has 215 billionch your reserves that they are ultimately there. Leverage ratios a little bit off their targets but these guys are still very much in the game. Theres very little Balance Sheet risk, that in fact these guys are getting 55 of the funding from the deposits and the other 22 you dont think this is a Short Covering rally, that were seeing a short squeeze. Brian says you go after it. Stay with that short rally and brian saying hes going after it. I think thats crazy. Im amazed that after this move its something that you shouldnt feel a little bit more costly. I think theres new information out there. The new information is the buyback of the bonds. Its stop the death spiral. It was in a death spiral, where people were hedging their bonds with the stock, and that was creating a liquidity issue. Now ive said from the beginning i dont think that Deutsche Bank is going to be a Lehman Brothers type of situation and the operating environment for european banks is awful. If the worst came to worse could the ecb come in and bail them out if they needed to . Sure. But if it goes from 17 to 18 to 1 its still going to feel real bad. Lets talk about the real and the question we ask are some. Most hated stocks on the street actually responsible for this threeday gain . Paul hickey joins us. What did you find . If you base up the s p, you go increment ily on short performance it gets better to the most heavily shorted so they are up twice what the least short are so you can certainly say its a Short Covering rally. The only issue is calling it a Short Covering real. Every bounce we saw during the last bear market was a Short Covering rally and the meaningful rally in 2011 and march 2009 was a Short Covering rally. Rallies begin with short conversation, so its hard to focus on that, but in the short term here, we think the onus is on the bulls here to to prove themselves here. We seem like the opening graphic we showed here, theres been several rallies since august, and they have all been met with lower lows, so until we make that string, its a little bit of a show me for the bulls here, and, you know, short term weve had backtobacktoback 1 gains and looked at prior periods where weve seen that, its been week. Oil has had a 12 oneday move, a 9 oneday move and 8 oneday move and a 7 oneday move so far this year. Sounds like its a sign of a turn. And weve seen these big gains. Japans had an 7 move, a 6 move and a 7 move in the last six months. Its down 22 , so when you see the big moves they are morning characteristic of weak market environments han strong market environments. Let me push back a little bit and im generally bullish. We dont talk about when you see big, paying drawdowns, its all short selling so thats not the same kind of selling at long selling, and i feel like here youre saying its Short Covering. That doesnt matter as much as long buying. You know, i feel a little bit like Hillary Clinton what difference does it make if theres buying, theres buying . That was my opening point. Just looking at the specifics and the characteristics of the bounce, it happens the same way in dead cap bounces or meaningful rallies so just take that for what it is, its just an Observation Point here, so the shortterm head winds that i just mentioned, the billing moves happening in weak markets and those are shortterm reasons not to be overly aggressive. Basically this is an inflection of some sort, it seems. I mean, we could either have a sustained rally because all rallies start with Short Covering rallies or most rallies do or this could be a short lived thing. The onus is on the sgluls why is that your view . Because every rally that weve seen has been met with weaker has been lower lows. The earnings of what weve seen so far this quarter havent been great but getting past this earnings season, looking out six months, several factors. We were talking last week on power lunch. The longerterm reasons to be to slowly edge into thing, but i dont think you want to like you were saying, do you want to chase the market right after a three backtoback 1 days. I think you want to sort of pick your spots. Well, you know, i look at the dollar and look at oil and think they are related. This is whats shaping up and making this different i. Said at the top this isnt a time to stampede and bull away. But to look at the anxiety in the markets over the last six weeks saying the dollar is stuck where it is and everyone who thought the dollar was going higher is in a tough place because at the same time you see an argument like all the thing like transports, supposedly leading indicators and were so destroyed and up on the year, ups and ksu, cummings, all these names are up on the year at a time when this is supposed to be a difficult environment. Because if thats Short Covering then you have to discount how much they are up. And thats the point. If youre short youre more aggressive in buying because youre chasing, thats human nature, so if indeed this is a Short Covering real, then the the magnitude of it matters because you may not say you cant say well then they are up on the year necessarily. As crude oil market stabilized, thats the question, so to say and get bushel here you have to predicate it on oil stabilizing here, which it hasnt done yet. Right. So if we do see stabilization, then that is certainly a positive because like you said, foreign, you know theres been foreign selling in the u. S. Markets. You see weakness in the morning and strengthened in the afternoon once the foreign markets are closed. Paul, thanks for coming by. Tim mentioned the transports, bottomed out in january, but on the last thursday. And here were in the iyt. Led on the way down, maybe they are leading on the way back up. Im with paul, bulls have to prove themselves. Two days closing above 1950 in the s p will be enough for me. All right. Breaking news here on the gop candidate. Cnbcs john harwood is here with the story. John . Reporter weve got a new nbc wall street journal poll of republicans showing donald trump not leading the race, thats the news. Ted cruz leads with 28 to 26 for donald trump in this poll. Marco rubio trails behind with 17 and then john kasich at 11 00 and ben carson at 10 and jeb bush in 4. Last month trump was leading cruz by 13 boss, and heres what was different this. Took place after the New Hampshire victory by donald trump and also after the debate last week in which he bitterly went offer george w. Bush who is popular here in south carolina, popular among republicans nationally saying that he had lied to get us into war, saying that he failed to prevent the 9 11 attacks and faulted him for not keeping america safe. Our pollster who has been around a long time covering these cycles say we dont know yet whether this is a temporary paws with Republican Voters pulling back for their judgment and its happened at earlier points in this race and donald trump has come back stronger than ever, or could this be a turning point in the race . We dont know yet, but as of now this is very striking because its different from what other National Polls are showing. We have ted cruz leading donald trump 28 to 26 . Melissa . This is going to be one to watch. John, thank you. John harwood, fascinating results out of that latest poll. Tim, what do you make of it . Interesting, maybe this is also saying that donald trump is really an independent. I know hes part of this poll and this and that, but i would not be surprised to see donald trump as an independent. I think its probably going to be a better road for him and the feeding frenzy within the Republican Party makes an interesting poll and move follow him to make. Im agnostic, not making that call one way or the over. What i would tell you i think the Republican Party is doing enough to themselves that trump may want to step outside of that. Whats interesting coming to trading in the mark. Over the last week or so ive talked to more people that are starting to be worried, worried or concerned about the election, starting that to factor into their Investment Plants. About what though . Whats the outcome. Look at top four leading candidates in terms of businessfriendly, market friendly. Run for the hills. None of them are. Exactly. Thats my point. Thats that is now starting to permeate the marketplace. People are making Investment Decisions based on the election. Up next, it is the one group of stocks that just cant stop rallying, and it could be signaling the next big clue as to where the consumers are finally spending the gas savings. Well tell you what it is. Looking for safe places to hide out. Weve got three stocks that are ready to break out. Weve got the names and how you can get in on the action, and later the debate over privacy versus security. Is apple in the crosshairs but is tim cook less battle with the feds cause to stay away from the stock . A surprising take, and much more fast money right after this. Man 1 [ gasps ] man 1 he just got fired. Man 2 why . Man 1 network breach. Man 2 since when do they fire ceos for computer problems . Man 1 they got in through a vendor. Man 1 do you know how many vendors have access to our systems . Man 2 no. Man 1 hundreds, if you dont count the freelancers. Man 2 should i be worried . Man 1 you are the ceo. Its not just security. Its defense. Bae systems. Solid day of gains. Priceline is leading the rally having its best day surging 8 on top of bottom line beat boosting the entire game. The ceo of priceline was on squawk on the street earlier today and spoke of the impact of Lower Oil Prices on his business. One of the things that people underestimated is travel specifically really benefits from Lower Oil Prices and were seeing in particular that macro effect having a positive impact on our business. Generally its a Pretty Healthy travel environment. Certainly the terror in paris and issues you you know, people see in syria and turkey, theres pockets of issues around the industry, but generally its positive. What i think specifically he said, you know, that was interesting on the call was that in recent weeks drop in fuel prices have been working. It seems like were getting a delayed effect from consumers across the board. It is very interesting. Xfs, which i know you cant count, bookings up 29 , a company thrown around at volatility 2, 1 times forward 2017. I dont think its terrible. In fact, i think those are pretty decent valuation. Ctrip, own a piece and they are exposed globally. If you dont know that one its anning in company. Marriott which well get to. You wonder is that consumer saving money on airbnb and its interesting. Maybe marriott is a have not in the in the space. Saw a rise in International Book its but not domestic bookings which was interesting to take away. You should be fading the airlines, tremendous rally coming off and this could be an aberration type of thing and the airlines, particularly like a United Airline trading up against 52, thats where i would take a shot. Boeing one of the biggest gainers on the dow today and this comes at bogue ceo defended the companys Accounting Practices for a 787 dreamliner earlier today and thats just one week after reports surfaced that the s. E. C. Was probing its financial projections. The ceo confirming nor denying the existence of any investigation and the s. E. C. Has also declined to comment. Guy, what do you do here . Wait pore it to get to 120 and sell it again. Jpmorgan downgraded the stock and took the price target from 142 down to 120. If you remember for a long tim 120 was the level we talked about being support and broke through there and traded down to 102 and change i think over the last few sessions on huge volume. I think it does get back to 120. I think people will cover it up there and if youre long you sell it there and if you have the temerity to put things and put it on a short position. In my opinion where theres smoke theres fire. What people are misunderstanding is what they are calling program accounting, kind of whats being called into question is incredibly complex, takes in hey lot of assumptions and inherently its going to be wrong or going to miss on something. This is par for the course. Its what they do, how they report. Have had a blizzard of bad news on the stock. I think the stock is a buy and looks very interesting at these levels and people are counting them guilty before not understanding how they do it. Still ahead, the ultimate test for the consumer, walmart. One of the Top Performing dow stocks out tomorrow morning and traders take their position ahead of the bigger report. Youre watching ffun, on cnbc. Looking for a shaf place to hide out . No need to fear. Safety plays in a very scary market. Plus, jpmorgan sounding the alarm on the Global Markets. Saying things are spinning out of control, and its one specific asset thats the biggest cause for concern. The man behind the call when fast money returns. Welcome back to fast money. The man who called the collapse in Deutsche Bank is back and despite his bearish position overall hes got some bright spots. Lets welcome carter worth. Which charts are you looking at in the. Three and they are defensive names in the first two and lets look at them. Philip morris, coke and then corning, but start with philip morris. One thing we know is that if you have a circumstance where a stock has worked off of the low and you have a higher low, higher low and yet it doesnt make too many highs, a lot of tension and keeps trying and fails and ultimately you can draw the lines like that, and that kind of tension, call it a wedge, call it an ascending trail, but more often than not you start to break out and we just did today, so were looking for a pretty important move here, a defensive name, independent of what the market does. Heres another name. Its the sake circumstance and you can draw the lines the same way, both defensive and both yield plays and the point being when you get back to a prior peak you struggle at that peak because people from here unload and they had a horrible experience and the guy from on here unloads because he has a great experience, so this represents the memory and ultimately you should get a resolution of this standoff so strong stocks at 52week highs look like they are going to get stronger and the third is heretofore a weak stock thats bottoming out. Draw your lines like this thats a double bottom, and whats important sheer this, that weve broken above the downtrend line thats essentially been in effect for the better part of two years, and this action here typically is concluded by a move above these tops and saw were also looking for a fairly powerful move out of corning. Despite what the market do, we think plenty lower. There are always names to buy. All right. Carter, thank you. You know, its interesting as two of the three stocks are i believe current positions or Current Holdings of you guys, coke and p. M. You own both. I own both and both these names fall under names that i think weve had nice debate on dividends. Do i want to own them. Just because the stock has a good dividend. Cocacola has a good dividend and theres strategy changes, a stock with a lot of issues over the last few years and by 2017 they will be growing eps and a lot of these companies do deserve a premium multiple in this tape. No question with yield. People are starved for yield. Philip morris 4. 5 dividend and that is as safe as any dividend is going to be, right . No guarantees out there but for floirs i think youll be able to get a 4 a share horvat next year, plus you have momentum in its favor in a sense, right . Its held up very well, even during the Market Downtown so when i look for something to buy and something to hide out, thats where i want to be. Cocacola, real quick, may grow at 10 eps, but they are not close to that now, and i think they trade close would be flat. Close to 20 times forward earnings. Great chart work. As always. Cocacola topped out in 99 right around 45 bucks, traded there again i think in the fall of 2014 so how would i id rather trade it on a breakout to the upside above 45. I know that might sound somewhat counterintuitive and needs to prove itself where we are right now. Any of these fall on your value screen . Corning at one point, lost money and just have a bad feeling, for no good reason. Not dissing corn, the company. You can. Youre allowed to and what we do on the show sometimes. My own personal bias. Its funny. One point of the show where corning would come up constantly. Exactly. Yeah. This was kind of the 0607 esknown king, emerging markets, easy name to get excited on growth. And im not excited anymore. Apparently not. Very honest, karen. Very honest. Coming up, the latest in the battle between apple and the fbi and what the next move to move for apple investors and jpmorgan is out with a terrifying call saying the Global Market is, quote, spinning out of control. The man behind that call and the one asset glass that he says is the biggest cause for concern when fast money returns. Vo know you have a dedicated advisor and team who understand where you come from. We didnt really have anything, you know. But, we made do. Vo know you can craft an Investment Plan as strong as your values. Al, how you doing. Hey, mr. Hamilton. Vo know that together you can establish a meaningful legacy. With the guidance and support of your dedicated pnc Wealth Management team. Ithere was 14 of us in a four bedroom apartment in the projects in boston. To be the first, actually, kid to buy a house in my family. I just realized that, im the first kid to buy a house. Its a very proud moment. Whatever home means to you, well help you find it. Zillow. Welcome back to fast money. Stocks rallying for the third day in a row. The dow and s p having their first threeday winning streaks of 2016 and their biggest threeday gains since the august lows. Dow soaring tripledigits while the s p soared 1. 5 pushing it out of correction territory. Second half of fast money. Are things spinning out of control . The market move that has jpmorgan sounding the alarm on the u. S. And where the best place is to hide out and wall markets one of the best performing stocks in the dow. Its Earnings Report tomorrow send the stock to new heights . The traders will weigh in later on. Apple dominating the headlines after the ceo tim cook refused a federal judges order to represent the government hack into the iphone of one of the San Bernardino murderers. Eamon javers is in d. C. With this story. Eamon . Reporter a real standoff between apple and the federal government, specifically the fbi and the department of justice. The fbi says they want access to the terrorist koehler Syed Rizwan Farooks el phone. Its an apple iphone c and cant get in without help from apple computer. The judge ordering apple to help in the process of unlocking this phone. What they specifically want is to stop blocking the fbis attempt to simply dial the pass code over and over again randomly until they stumble into the pass code to unlock that phone. Apple computer, however, saying they are not going to comply with that order. Heres what tim cook said in a statement that was posted on apples website last night. Saying opposing this order is not something we take lightly. We feel we must speak up in the face of what we see as an overreach by the u. S. Government. We are challenging the fbis demands with the deepest respect for american democracy and a love of our country. Meanwhile, the white house weighing in on this from the spokesmans podium today, josh ernest saying the white house supports the fbi. Obviously the department of justice and fbi can count on the full support of the white house as they conduct an investigation to learn as much as they possibly can about this particular incident. Donald trump also weighed in today on this issue siding with the courts and Law Enforcement not with apple supporting apple here. Edward snowden, the nsa whistleblower, hes tweeting from russia saying the fbi is creating a world where citizens rely on apple to defend their rights rather than the other way around. So, melissa, where we go from here is apple has a few days now to respond to this court order and then if they dont like the way that decision is handled down they can appeal it up to the ninth surcut and possibly after that all the way to the supreme court. Specifically issues that theres ten attempts that youre allowed to try the pass codes and once the ten attempts have happened then essentially the phone shuts down and its not accessible anymore. Would this happen lets say if if the suspected killer had a Samsung Phone . Would we still be facing the same issues . I think youd be facing issues specific to samsung software, their phone, but fbi is aware that this new ios 9 software that farook was use does have an auto erase capability and they want apple to suspend that auto erase on the phone so they can do a blunt force abeing it a. Not asking apple for the password because apple doesnt know that. They are asking apple to suspend the ability of that phone to erase all the data on it so that while they try to guess the password the data stays in there. They can figure out who farook may have been working with or communicating with in the hours and days lathe leading up to this attack and where he was and those are key elements to this investigation of the terrorist attack back in december. And if apple suspend it had for this particular phone would that have implications for other apple users or no . Thats clear lit concern here on the part of apple. They see if they are forced to create this kind of software that would allow this particular individual phone to access, the software would exist and could potentially get in the hands of hackers, bad guys, male violent governors and others around the world and that could be a security problem for millions of iphone users around the world. The u. S. Government, you can rest assured, does not see that threat in the same light as apple does. Eamon, thanks for bringing this issue to light and explaining all of this for us. Eamon javers in d. C. Cooks move bringing to light how much your personal data should remain private. Take a listen to what tmobile ceo john ledger had to say about this very issue earlier on cnbc. Hes in a real, real difficult spot. Hes being requested to help authorities deal with the security of the device, and, you know, well see where it goes. I wouldnt know how to advise him but i understand both sides of the issue and i think its groundbreak. We value security and privacy for our customers, you know, at the paramount basis, but the questions right now associated with National Security and horrific acts where 14 people were killed, i really dont know how to balance it . What does this mean for apple investors and for the stock . Does it have implications or not . I dont think that it really does. Its such a unique situation. I dont think that people will feel, even if they end up needing to comply, lets say that does happen, i dont think people will say, you know what, i canned buy an iphone. Im concerned about security. I think that may not be right but i dont agree. This is such an emotional issue, and i think apple is wrong. I think they are digging in. Emotional meaning they should give up. They are going to wave the flag and say i will never buy this company again. I dont see this as the end game for apple. This is not a case of the fbi being arbitrary saying we need to look at something. This is a mass murderer. Edward snowden can go hide back under the rock. This is a case where a company has an obligation in a very specific situation. This is not we need general access, this is getting information vital to our country. Buts eamon said once you create the software to do that, that software exists and what if that software lands in the wrong hands . They are going to lose track of that software . Come on. They could put it in a locked phone. This is a situation that can happen again and again and again. Lets not try to make this a bigger issue in terms of what could leak in enemy hands. I mean, they are going after some specific information and give it to them. I can only speak for myself. If there was a change to my apple phone that allowed me, government to get into, it i dont care. I would still buy an apple phone because i like the product. Whether or not people feel that way and it translates in the stock buys, i dont know. I dont think it will. Tim got emotional about this, rightly so or wrongly so, he was emotional. If this becomes politicized and becomes bigger than, that will you start hearing people say, you know what, ban apple . Im not say its going to happen, but as emotional as tim got other people can get equally emotional and the world we live in now things happen very quickly. Im half italian. But the issue, too, is where do you draw the line . If the u. S. Government this time, happening within our country, what if there is another government of a country which apple operates and they are asking the same thing for another investigation which we may not agree with. And then what . And then what . The American Company responding to the american government. Its really simple. We should note that apple cofounder receive wozniak will be on power lunch tomorrow at 2 00 p. M. Eastern time. Interesting to hear what he has to say about this situation. Still ahead, are the recent market moves out of control . Well tell you what jpmorgans head of fixed income is sounding the alarm right after the break and shares of walmart are outperforming, but one thing our trade remembers waiting to hear from the company tomorrow. Well tell you what that is later this hour. Much more fast money straight ahead. 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 the hudson valley, with world class biotech. And on long island, where great universities are creating next generation technologies. Let us help grow your companys tomorrow, today at business. Ny. Gov welcome back to fast money. Jpmorgan adding to the warnings coming from wall street saying some of the recent market moves across the world are out of control. Bob michel is the ceo and head of Global Fixed Income for the commodities group. Joins us here on set. Thanks for being here. Thanks for having me. One of the things you mentioned is 100 an ounce gold and what that signals to you. Absolutely. When you look in the last few months in totality, theres some significant dislocations. When you look at november and december, tenyear treasuries have been trading peacefully at 2. 25 and then bam, down to 1. 5 . You had highyield spreads which were 600 basis points over and go to 900 basis points over and had you gold which had been trading at 1050 suddenly go to 125 and that told thrust was a lot of concern in the markets. People were looking for a safe haven and gold was actually the currency of preference at that point in time. Look at today. Today is not a safe haven trade day, right . Equities are up, bond yields are up a bit. What happened to gold . Up ten bucks. You actually made the comments on nbc a few days ago last week. Yeah. Specifically. And since then weve had a threeday real, some of the biggest gains in months and months and monies and nothing in your view has changed even though the treasury yield is back up. Not 1. 5 anymore. So whats changed is greed has replaced fear. Youve had that significant repricing. People have had cash and are going back into the markets and putting it to work. Were doing it. We were in buying highyield and Corporate Bonds in the last couple of days so i think you have to appreciate that that repricing has occurred. Does that change the fundamental picture . I dont think so. I think theres a Global Growth slowdown under way. When i read the fed minutes today, i see a central bank thats out of sync with the other banks in the world and second guessing it self . Heres the question and u. S. Centric trading show for equity investors. What do people in the u. S. Who have the option of only buying u. S. Stocks do with their portfolio given your scenario . I think you stick with hoy quality. When you talk about how were investing with corporates were sticking with high investment companies. Were talking about apple, came with long debt and thats prudent management of their Balance Sheet. On the fixed income spectrum where do you go then in your scenario . Quality duration. Okay. And it means a lot of different things. We look at countries that are suppliers to china. We see a big slowdown there and think that Central Banks will have to adjust rates, people like australia we see rates coming down a lot. Look at peripheral europe that. Traded off in the riskoff environment so were able to go in and buy italy and spain at yields that i think are too attractive with the central bank in buying out the net supply every month and then, as i said, corporates reprice. Were sticking with the high quality corporates in both the highyield space and the Investment Grade space. Bob, thanks for coming out. Out of time. Bob michele of jpmorgan. He thinks peripherally europe is hanging in there which is great and i tend to agree with it. Were an environment where liquidity is tightening around the world so to say it wont fool on the high end of pressure. I think we see massive dislocation of markets. Thats an opportunity though, even though i think the world is a Slower Growth environment. Both down a lot and to bobs point, up ten points. Gdx is hanging in there. Something going on in gold and the other thing, i didnt realize italy was a peripheral country. That bums me out a little bit. Actually called the biggs, arent they . I didnt make the term up . Im asking a question, not making any statement. Fortunate trying to understand. Just saying. After the break, a big rally for twitter today after the stock catches a bit and traders dont think the gains will stop here. You wont believe how think you are think they could soar. Details next. Youre watching fast money on cnbc. First in business worldwide. The secrets to the surge are hidden behind the average. Youre not gonna watch it no, youre not gonna watch it we cant let you download on the goooooo youll just have to miss it yeah, youll just have to miss it we cant let you download. Uh, no thanks. I have x1 from xfinity so. Dont fall for directv. Xfinity lets you download your shows from anywhere. I used to like that song. Welcome back to fast money. An earnings alert on jack in the box. Lets get to seema moody in the newsroom. Reporter stock down 19 after reporting weaker than expected First Quarter results. According to the Company Solid sales and traffic results at qudoba were due to expected margins and the chief executive said sales were sluggish at jack in the Box Restaurant as several competitors began promoting aggressive offers and guidance came in well below expectations. The stock down nearly 20 after hours. Seema, thank you. Sounds like bad news every which way you slice it. Mcdonalds. Is that two words. One way for me. Golden arches. And i thought that would win with chipotles loss and maybe people got scared of the entire space. Down 20 , a little bit of an overdone. 2014 it topped out at 60. Past resistance should be support. Getting worried about mcdonalds . Youre long, right . I i dont think so. I mean, i think this is a case where the valuation isnt terribly cheap. This has been a defensive stock during a difficult time. When the bad stuff is flying higher mcdonalds is probably going to be sideways. Its been sideways. Hasnt been sold off. Its been trading pretty well considering the tape. Walmart out with earnings tomorrow before the ball according to analysts. Big box retailer expected to report declining revenue and time for a little take your position ahead of walmart. Karen, where do you stand on this one . I like the retail space because i like whats going on with the consumer, but i dont i im not long walmart. Is it expensive . Do you not see the turnaround really taking place . Dont believe the ral . I feel like its been for several years weve been talking about walmart sort of trying to get their mojo back, and, i mean, relative to amazon, much rather own walmart for sure but dont here. Had too much of a rally for me to buy into or even after earnings. Even on weakness would i late and let this settle out and see if there was any weakness and to me its had such a run its as no touch particularly ahead of earnings. Yeah. I actually think wall smart will be to outperform and agree with brians approach into earnings, tactically this is how i might approach it. These guys have the most momentum to gain from, you know, their recent history. I think their comps are pretty easy to beat. I think they have a lot of problems there but same store sales saying they are finally getting it right. Do you think it has to do with the view on the economy that things are worse so it proves that the economy is actually decent, what happens to the walmart trade, it unravels sns. This stock has gone from 56 to 66 i think in two weeks, a pretty significant move for any stock, not least of which is walmart so if the economy is Getting Better, does it unraffle . Maybe so much. I mean, this has had a horrible couple i mean, really horrible you dont think its Getting Better . I dont. I think 56 and 66 in two weeks is too much for walmart. Yeah. Your view on that, im curious . I think that this is company is a victim of its own problems over the last years. Went to small stores and fresh things. Losing their price. Its all about price for these guys. Trying to do too many things to compete with amazon, et cetera. Their problems are their own. I think they are getting some of their mojo back and, yes, its a defensive stock, high div. Great Balance Sheet, you know, that works. Twitter shares rallied 7 and some traders are betting the stock will continue to fly over the next couple of months. Mike coe is in austin, what did you see . A lot of call activities. Outnumbered puts by 51 and almost all of that unusual volume was the result of one big set of trades where somebody who already had some bullish positions hon in twitter did some big adjusting, selling out of one call spread and rolling one of their other calls to the june 21 call trading for 1. 30. Ultimately this trade was long 11,000 of those, bullish bets that the stock would rise 20 plus by junics peration so extensively extending the rally off the lows which is 20 between now and june expiration. Do you buy into this, mike . You know, this is an interesting situation. Really disappointing me in terms of fundamentals but here at the end of the day i think about it this way. Twitter actually has some engagement from its active users and havent figured out how to monetize that and that was a problem facebook might have faced in the early days. This is an unusual social media property. I use it and i think everybody else on the desk use it and once they figure out how to monetize it it will be worth a lot. Anybody buy into the notion that twitter set for another leg higher . Yeah, i am. You do, too . Yeah. Listen, you know, again, they are getting to the point where all they need to do is one thing right. They havent been able to do that one thing right but at some point youre throwing up darts. Could you see a 20 rise in there . Sure. Im long the stock and im clearly not happy and what make said they are growing 60 year over year in terms of ad revenues and i think they will probably build on that, but you have a very loyal user base, more loyal possibly than facebook. Those people who use twitter are spending as much time on it per day as people on facebook or more and they havent figured it out but i believe they will. Stop talking about Monthly Average users and get away from that and get away from that me traffic. I think it helps them in the long term and be more like google. Tim is going to be right on this one. I think will rally from here. For more options action check out the full show 5 30 p. M. Eastern time on friday. Coming up on emmuoney, cramer with all the scoop next. Here at the Td Ameritrade trader group, they work all the time. Sup jj, working hard . Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. From a rude awakening to start 2016 to rally mode on wall street, just how sustainable were todays green arrows . The secrets to the surge are hidden behind the average. Ill reveal them and what may be lurking just ahead. Mad money is next. And finally fast but not least, a very fitting song for california journey, the german shorthaired point taking home the title of best in show at the annual westminster dog show. Hes the third of his breed to ever take home the top prize. Good looking pooch, right, guy . Look at that. Final trade time. To the male hound . Yes, thats me. Eem, close out that trade. B. K. Ers. Oil looks like it will be up. The whole world wants to be long, b. K. Is hard wired to be against consensus. Sell xle. Chairwoman . A big retail rally this year but its time to sell a little into it. Childrens place, to say goodbye. Negotiator . The knee jerk was to take it lower, higher than the close. I saw with this rally on ntap. Im melissa lee. Thanks so much for watching. Back here tomorrow at 5 00 for more fast money. Dont go my mission is simple. To make you money. Im here to level the Playing Field for all investors. Theres always a bull market somewhere. I promise to help you find it. Mad money starts now. Hey, im cramer. Welcome to mad money. Welcome to cramerica. Other people want to make friends. Im just trying to save you some money. My job isnt just to entertain but to educate and teach you. Call me at 1800743cnbc. Or tweet me jimcramer. After todays tremendous rally with the dow gaining 257 points, s p vaulting 1. 65 and the nasdaq roaring 2. 21 its worth