Scott walker will be talking to th gundlach in a moment. Long emerging markets. Tim sea mour, youre an eem merchant. This is a trade ive been long for a long time. I actually think emerging looks good against the etf. If you spread it over the spy, you can see the ratio, somewhere around 16. 8 right now. Some key levels to break through. Emerging is absolutely out from the s p. A lot of the bogeys for em, really, the big hurdles for em have been dollar related, growth related. Those economies are starting to move. If you want to see a trade, we talk about this on the show, this is the trade. Emerging is underperforming the s p by almost 60 from the peak of april 2010. And if you want to look emerging markets that took fire in 2003, 2004, 2005, youre back to square zero. Thats exciting. It feels like the short spy side of the trade might be a little trickier. We were talking about how its difficult to not be long at this point. The s p 500 with the volatility so low. Listen, i cant speak for mr. Gundlach, but i dont think hes looking for a complete wash on the s p as hes looking for significant outperformance in eem. The s p short is just sort of more of a hedge, i would imagine, in my opinion. He can speak for himself. Tim, real quick. I think 07, 08, weve never gotten remotely close to the eeo 5. Youre talking about something that probably has the wind in its sails. You have to wonder how the short position is being put on with volatility so low. There are a number of ways to do that. Its cheap to do. You can do it with options. Think about what this trade structure looks like. If youre betting on eem rg betting that chinas going to do better, because thats a huge portion of it given the data well, we actual l i saw weak data. Weve had really smart people come out and say, you know what, theres something going on in china thats not good right now. At the same time you had d. J. Com come out with unbelievable earnings. Its unclear to me whether or not a longrun prospect, or short run china will have a problem. If you are long china, and china blows up, youll be fine. It looks like a decent hedge. It is absolutely a hedge. I think tim nailed this. Youve nailed this for a while now. The data coming out of china scares me a little bit to go longers em being short u. S. Right now. I would rather be long europe than long the u. S. So i would actually put that trade down versus what gundlach suggests. We need to believe that Interest Rates will remain relatively low in order for that side of the trade to work. I think you do. I think you need to believe the dollar is going to remain this strained. The underperformance has been currency related. Were at a place where i think maybe the dollar in the short run is stuck here and thats good for the eem. Lets go out to the sohn conference and scott walker. All right. Melissa, thank you so much. Listening to the confers, we will just pick up with jeffrey gundlach. Great to see you. Welcome. Thank you. These guys on the show were just talking about the call you just made. Short spy, longers em. Yeah. Why this call . Its the valuation of emerging markets, is half the valuation of the s p 500. When you look at things like pricetosales, pricetobook, and i think part of that valuation difference has been based upon, one, the dollar had been strong. From 2011 until 2015. That usually correlates with em underperformance. I think thats part of it. The rest is that i think passive investing is something to use a word i dont like, bubble, where i think people greatly overbelieve the idea that passive outperforms. Theres a birth right to outperform all active managers. In fact, theres incredibly predictable cyclicality, and the passive outperformance has been very similar to how long theyve lasted historically. So i think that youre going to have active management, as i said, to use the mark twain quote, the reports have been greatly exaggerated. Theres a lot of really, a macro call based on valuation. You do have to consider the dollar as part of this. So youre suggesting that so much money has been flowing into passive investing, that it is overstretched valuations versus of the s p 500 versus you can use europe as well. Europe is more popular. People feel more comfortable with it. I just think em has more potential upside than even europe. So, yeah, i think you look at market share global stock markets, u. S. Is over 50 of the global stock market. But its under 25 of gdp. So theres just something wrong with this picture. I used an exhibit of if we didnt use the Morgan Stanley world index which is capitalization, but used gdp weighted, then the market would be much lower, the world market. Its the u. S. Thats dragging it higher. I think its a herd mentality that is based upon kind of the repetition of the idea being extrapolated out indefinitely. And i use the metric which i thought was the biggest idea of my presentation that passive investing doesnt even exist. Its just rules based. And the s p 500 isnt even rules based. Its run by a committee. A lot of people think its the biggest 500 stocks in the country, but thats not true. Its a committee. Now, they dont change things a lot, but the chairman, david blitzer, actually was bragging about the fact that they were active managers, and that bill miller called them good active managers. But youre hiring an active manager, youre supposed to look into their selection process, youre supposed to look into their research, how they make decisions. People are blindly handing over their money to an Investment Committee they know nothing about. Its almost a breach of fiduciary duty on the part of institutional asset pools without understanding what exactly is the daytoday. Lets be clear as well. Even though you say short spy, youre not calling for the s p to fall out of bed overnight. In fact, you said during your presentation that the s p could outperform in the short term. I said on your show, on fed day, march 15th, i said, you asked me can stocks move higher with your Interest Rate call being correct, which was that we would get a tradeable rally off of slightly higher than 260, the global 2 and a quarter. My answer was yes, you can have both of those happen. Because the bond call has more to do with ridiculous positioning in the market. Its not really based upon tremendous economic softness. The s p 500 will not have an attitude change just because the tenyear goes down by 40 basis points. Thats what ended up happening. I did think if Interest Rates fell, and they did, that financials would probably have a shortterm underperformance. We talked about that, too. Because people like to see Interest Rates go up at the long end in particular when theyre interested in financials. I thought that was a countertread move. I thought it was very interesting we did get below 225. My target was 218. We got to 217 on the close. I always use closes. If we go back above, particularly above 230, well, were rejecting this sub225 level which means the rally could very well be. Now were up at 238, which is solidly back in the range where we spent so much time. The only thing that is theres a couple of things that i argue against significantly higher int rates, which is copper to gold. Gold has been weaker lately. Copper had been weaker earlier. But that ratio was indicating lower bond yields. Another thing that was indicating lower bond yields was absurd overpositioning, short the bond market. The day, the week that the tenyear went below 220, you went from one of the largest short positions in history to the specs actually went long below 220. All these people positioning short at 260, many of them canceled that trade and somewhat long at 217. I think that thats that alleviated the oversold. Are we in now the strengthening yield trend . Or is this shortlived . Where is the tenyear yield going to be at the end of the year . I dont fall for that trap anymore. One year i said it was going to be at a level and it was there three days before the end of the year. Then it moved like 20 basis points the last few days, so they said, you were wrong. Ive been talking about this since 2012. So its coming on five years. The history books will say that Interest Rates bottomed in july of 2012. The twoyear bottomed in 2012. It was rejected in a matter of a day or two. I think were in a longer term secular upmove in yields. But that doesnt mean you have to be terrified of bonds yet. Because i like to quote earnest hemingway the sun also rises. How did you go bankrupt, bill asks . Two ways. First gradually and then all at once. Thats the way bond yields bottom. I made a statement in my july webcast that i think the next president ial election, or maybe a year after, but somewhere in that context, the tenyear will be at six. People need to listen to you when you talk president ial elections, by the way. I predicted every president ial election correctly since 1976. Actually, 1972. For those of you who dont know, last year here at sohn, you said donald trump would be president. I said that in january before the primaries even started. So its memorialized there. But i think that you could easily see a perfect storm of bond issuance, thirst for nominal gdp, Corporate Bond maturities rolling. Qe has to be rebought by the fed or sold out to people like me. On behalf of myself and my clients. So i think theres going to be tremendous bond interest. And then theres the deficit. I alluded to it briefly this year, donald trump i think is very comfortable with debt. Hes built whatever empire he says, he said, i love debt, he doesnt want a strong dollar. Trump in one year ago just about today, may 5th of 2016, had a quote, i showed my presentation, a strong dollar sounds great but in reality causes trouble. Its not nearly as good as you think. A month ago, in april, he came out and said, i think the dollar moib too strong. So i just dont think donald trump can get satisfaction delivered to his voters with a significantly stronger dollar. Its just not going to help american jobs. It doesnt you know, higher rates, it doesnt lead to higher dollar, which leads to no, i showed that in my presentation. Its an urban legend. Everyone says, if you just say this to a crowd, everyone will move their head in a northsouth direction and say, oh, yeah, fed tightens, dollar goes up. Ive been trying to disprove it for 18 months now when i turned nur tral on the dollar from the move from 75 to a hundred. Its just not true. Theres been many instances of sequential fed tightening that the dollar just went sideways. It happened in the 08s, it happened in the 90s, and its happened this time. The feds started tightening in december of 2015. The dxe was above a hundred that day. Its lower than a hundred today. The dollar is not strengthening. Weve raised it three times. Im not saying that the dollar must weaken ive been neutral. Ive had moments of negativity. I havent had a bullish dollar fall really though since i was bullish from the middle of 2011 until december of 2015. These markets, particularly currencies, are tremendously anticipatory. The reason the dollar went from 75 to a hundred, there was the understanding that the fed was itching to start raising rates. They anticipate. So its after things become obvious, or that theres momentum in a move, where suddenly everybody gets religion. Like the short sellers of the tenyear when it got to 201. Suddenly they give up on their short. Rules based investing can be accomplished in a rules based way. The s p 500 isnt even that. I have a rules based fund. Its called dseex. Its outperformed the s p 500500 basis points every year since its inception. So its possible if you have a good economic theory behind the rules based investing, but just some Shadow Committee choosing your investments, im very against that idea. And i really think that its a fair trade, as you said. Not that im short the s p or bearish on the s p, its a relative performance game. Like my pick a year ago, i said long the mortgage reits, its up 40. 7 that time period. I wasnt bearish on utilities. It was a relative value. Im glad you explained that. Last, but certainly not least, twitter has its newest yeah. Newest tweeter. Yeah. Ive been trying to avoid social media since it came into existence when al gore claimed to invent the internet. Basically i have seen so many articles and reports about my investment strategy, my results, calls not made that i never made, that im just tired of getting false news out there. So i decided when i see something thats factually incorrect, rather than trying to get a retraction that nobodys going to read, its going to be on truth gundlach. We started this morning, i set up the account in the car on the way over here, with one tweet, which is test. So thats all there is now. And one follower. To whom to test it with. Now i think we have a few thousand already in the last hour. I think you do. I think you have a lot of people following you. Jeffrey dpund latch, thank you so much. Thank you. That is jeffrey gundlach. Melissa, back to you. In fact, 2,047 followers so far. Jeff gundlach elaborating on his call. But also, talking about a number of other things, including the falsehood, had esays, and the belief that rates and dollar must move in tandem and the overreliance on passive investing, mainly through the ets, and what that causes. In the first place i want to go to is starting to show with his short skp, long eem, wasnt necessarily bearish on the s p. Its more of a hedge. I think we tried to clarify that. And mr. Gundlach just did. The trade probably does make being long eem on its own probably makes sense. The passive investment that he laid out there is a important thesis. Its where is the money coming from. It is institutional money, retail money. Right now, its been for a long time retail money flying into this market. Hes a hundred percent right when you look at the valuation of the stocks. Especially the s p 500 near the etfs. Their valuations are sky high. It goes both ways, though. It does. It can also drag down valuations unfairly as weve seen. For instance, right after the Hillary Clinton i tell you what, if youre an investor looking for a hedge, its never been a better time to use etfs and index funds as hedges. As a hedge fund manager, investors used to give us a hard time saying we are hedging with spies. It was always taboo to talk about this. When these trades werent so crowded, it probably was, we called it like it was basically a sleep at night hedge. It didnt mean anything. Now when these are right now, being short triple qs, you think have value, is a lot of sense to me. I just the dollar has been sideways for a long time. And its going to stay that way. Comments on the dollar, it has been sideways, right . Hes saying donald trump does not want a strong dollar. Weve got details, plus the Telecom Space is on fire. What could be the next big deal . Later, the oracle of omaha, what they are and why hes so bullish. Much more fast money still ahead. 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Liberty stands with you™. Liberty mutual insurance. The shlike a bald penguin. How do i look . [ laughing ] show me the Billboard Music awards. Show me top artist. Show me the top hot 100 artist. They give awards for being hot and 100 years old . Well take 2 [ laughing ] xfinity x1 gives you exclusive access to the best of the Billboard Music awards just by using your voice. The Billboard Music awards. Sunday, may 21st eight seven central only on abc. Welcome back to fast money. The airlines sinking despite encouraging words from billionaire Warren Buffett. They said the industrys worst days could be behind it. It was a suicidal business for a long time. Having the consolidation that came about through the bankruptcies made it an extremely competitive business. I dont think its a suicidal business anymore. Buffett also commented on the viral video of the removed passenger on the united flight saying oscar munoz made a mistake with the initial response. Is Warren Buffett right and should you bet with the airlines and bet with buffett . Tim . I do. I think you should. I think airlines are very different businesses. I think theyre trading in many cases, look at delta as if the economy is in a recession. If theres growth there, theyre certainly to be owned. The function as airlines as efficient players in their own market is what it all comes down to. Delta, analyst on the 11th, always a good day for the stock. These are dividend plays as well. Efficient player is the key. Warren buffett said if capacity gets out of control, if they put out too much capacity, thats going to be a problem. Thats the key metrics you have to watch. In the short term, how the stocks traded, i would wait for a little pullback. You might take another week or two before you get in these. Its probably not a bad trade. Valuation is compellincompel. Priceline made an alltime high today. Still, i think very reasonable valuationwise. It will be interesting to see how they perform after earnings. A lot of people raising their price targets. Raymond james today just had their earnings. Its all about pricing, all about managing capacity properly. I think brians right, i think you wait and let this group trade a little bit. Im looking for lower levels. If theres one stock to buy, it would be delta. Still ahead, two big travel stocks, hertz and marriott reporting moments ago. Hertz tanking, while marriott is higher. Im melissa lee. Youre watching fast money on cnbc. In the meantime, here is what else is coming up on fast. Lets make a deal thats what telecom and cable executives are about to do. Well give you the names that could be the in ex target. Plus fast money is going to las vegas. Hitting the strip in search of the hottest trades and talking to the biggest names in sin city. Steve wynn, mark cuban and wayne newton. This thursday at 5 00 p. M. In july of 98. Oiney i did active duty 11 years. And two in the reserves. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. It actually helped to know that somebody else cared and wanted make sure that i was okay. That was really great. Were the rivera family, and we will be with usaa for life. Usaa. We know what it means to serve. Call today to talk about your insurance needs. Itbut one i think with quesa simple answer. We have this need to peek over our neighbors fence. And once we do, we see wonder waiting. Every step you take, narrows the influence of narrow minds. Bridges continents and brings this world one step closer. So, the question you asked me. What is the key . Its you. Everything in one place, so you can travel the world better. Well wait. What did you think about her . Morrow. Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . 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Can the volatility be signaling trouble for the market. Well explain. Hertz crashing in the afterhours. It is one of carl icahns stories. The market cap passes 800 billion for the first time ever. The tech giant up a staggering 30 in 2017 alone. Dom chu is back at headquarters with a look inside apples core. Hey, dom. Melissa, there used to be only one big apple and youre sitting rights in the heart of it over at the Nasdaq Market site. But these days the rest of the stock market is driven more and more by whats happening with the iphone and ipad maker than it ever has before. Shares managed a new record interday high today. Theyve been on a tear over the last 12 months. Theyre up 64 during that time frame. Record high stock price, record high market value as well. Were hovering just around that psychologically significant 800 billion market cap level. Apple stock now accounts for about 3. 8 of the overall weighting in the overall s p 500 index etf. Thats more than a percentage point. A full percentage point higher than the next highest weightings, both of the alphabet share classes combined and microsoft after that. During the course of history, thats not nearly as significant of weighting as other companies had during the roaring 1980s. If you look at 1985, ibm accounted for around 6. 5 of the overall s p, emphasis on the big in big blue. In 1981, at t was around 5. 5 of the weighting. Fast forward to 2009, exxon mobil was 5 . Some say apple has historical precedent to get even bigger. Some bears say were due for a stall. Theres little doubt apple is the biggest influence on the overall stock market. Back over to you guys. Thank you, dom chu. Is apple easy money . The valuation is not as high as an amazon or some of the other hoy flying tech stocks out there. Tim, is this a slam dunk . No, its not easy money at all. Its difficult money. Heres whats being treated, where the growth prospect, if you think about apples growth margins, that they now have 70 of the market for phones above 500. Which means that they are taking market share in these exclusive very glammed out phones theyll continue to do it. Theyre slipping in china, where in fact the phones are cheap and it doesnt really matter. Theyve held on to the whole concept of, were going to protect Gross Margins and protect the asp, and theyre growing there. 300 billion in market cap in the last year. Trading like a fang stock. So its had a couple of things. The easy money has already been made in apple. So if youre looking for an easy trade, apple is not it right now. That being said, it still has some tailwinds. We saw in the last quarter their services are growing at what the street would expect and what you would want to see. And maybe they have the iphone 8 coming out. You dont buy at alltime highs. But over this year there are going to be times we do a story where well say, is apple done, or rotton core, or something silly like that, and thats the day you buy it. I said the headline was silly. They reported on may 3rd and i said the quarter was not near as strong as the prior quarter. The highs we saw in april of 2015. Has the easy money been made . I probably thought that the last four or five months and the stock continues to grind higher. Now theres talk of dividends being higher. Easy money or hard money . The easy money has been made. Right now id say, does the stock have more room to the upside . Absolutely it does. This new iphone will be amazing. Who knows if its delayed or not. It doesnt matter. The long story short, the stock is going to grind higher. Probably to 570. Thats where it stalls. The easy money has been made early on. Now this is the tail. I think its another couple quarters of growth. Street numbers are too low. Thats the bottom line. With apple soaring to alltime highs, is the tech giant still worth a buy at these levels . We have to go off the charts. Apple is in good company with the 150 price tag. Melissa, getting fired from apple is the greatest thing that could have happened to me. Thats steve jobs. The greatest thing for me is how to read a chart. I have a three great ones, trading around 150. I can get you to 180 on all three. Lets start with apple here. You can see beautiful base of support over the last two years. Doesnt get any better in terms of a base. The textbook breakout from that base. This is todays move. Thats about 20 billion plus in market cap. Thats like a snapchat, half of tesla, model three, just today alone. And it gets even better. When we go and zoom out, and we look at that longer term chart here, you can see the setup. Very similar to the strong trend we saw from 2013, to 2015. You see this big multiyear base of support. And another multiyear base of support. Of course, the icing on the cake is that big base breakout. I can get you to 180. If we do what we did back here which is about 140 move, i can get you to 215. Maybe not this year, but therea case for it. As we move forward, with esee facebook. We look at that social network. The only thing thats outperformed facebook is bit coin. Slow and steady. Once again, stock around 150. This is not a stock thats done going higher. I can also get you to 180. We finish with one of the more controversial names, netflix. What i like about netflix is that weekly chart. That symmetry that we saw from 2013 to 15. Very similar trading range. We moved sideways here. We break out, and thats where all the gains from. Thats exactly whats happening here. I think theres another 50 of upside. From that breakout 130 gets us up to about 180. The three Big Companies that have made big moves, i think all of them continue to lead the market. Come on over. Unilateral i need answers. Forced to choose, which of the three would you choose . Apple. Hands down . Yes. No hesitation. I think its been one much the top picks all year basically, and it remains a top pick. The best chart and the best company. We talked about with an obvious catalyst, hard money, easy money. I just like to make money, it doesnt really matter. The biggest Consumer Product in the history of mankind is like four months away, so why not. Rich, im looking at these and looking at the risk reward basis. I see the charts go parabolic on a lot of these. What do you look for when they go parabolic . Is that a warning sign or trend accelerating to you . I think its a very strong trend. The tree is not going to grow straight to the sky. We would look for some consolidation, and i think as you move into the summer, midjune, late june, youre going to see volatility pick up, as it often does when we transition into a tougher period of seasonality. This is a strong trending market. Its not a fourletter word, its okay to buy strong sox in a bull market. Not a fourletter word. Im going to ask you the same question would you rather . Would you rather . Apple, netflix, facebook . Netflix is the one. Oh, yeah. Oh, come on. Dont get all man, thats thats the least of all three of them. Wide open for competition. I would say apple. The reason is because apple is much criticized services business. In other words, this is a massive business and its barely begun to grow. Netflix. I totally agree with guy on this. The second half their second half is off the charts. Easy comps. The setup there in my opinion is very positive. Beneficial for netflix. I pick bit coin. Thats not the way it works. Rich mentioned it. I would pick facebook out of this. Youve got this secular change here, facebook taking advantage of all of it with its multiple properties. Rich, good to see you. Sflnkts still ahead, two travel stocks, two very different moves. Hertz tanking as Hotel Marriott moves higher in the afterhours. Comcast and charter join forces with a mobile partnership. Well tell you what it means for the Telecom Space. With e trade you see things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. Start trading today at etrade. Com welcome back to fast money. More news coming out of the sohn conference. Hi, leslie. Hey, melissa. Were hearing about another short position today. Thats from jericho capital management. Josh resnick who spoke a little bit ago recommended shorting frontier communications. That stock has responded accordingly. We also have heard from Larry Robbins from glenview recently. He had three stock picks that he is still currently presenting on. One of those was dxd, he also presented on smc and ims. We had a little bit of news that has come out amid todays sohn conference with pandora. That involves strategic investment from kkr to the tune of about 150 million. This is interesting, melissa, because as you recall, pandora had been in the process of looking to sell itself. It has retained Morgan Stanley to do so. It had an activist investor in the stock that had been prompting it to sell. You heard from him earlier today. Talking about century link. This seems to be the path that pandora has chosen. Were still listening to more of robbins presentation. Well get back to you with his justification for urging investors to buy those three stocks. Melissa . Leslie, thanks so much. Interesting names. Ones that we hardly trade here on this desk. Fmc is an integrated company, in the fertilizer space. This is a brutal place to be investing. Ive been long a couple of these names in the last few months. Its not been easy. A name like this comes up at a conference like this, and theyve done their work, its worth taking a look at. The ftc is interesting. Its a name were active on the desk recently. Theyve got no bid for this as far as covering their shorts. Heres a name i think is a consensus short across the board. Nobody wants to stay long this thing. They think its basically a zero shot. News alert, earnings alert on hertz and marriott, both remain volatile after hours. Melissa, a big decliner in afterhours, pretty good volume selling down hertz global, the rental car company. Third straight miss. Stock down more than 80 the past two years. Thats despite having a backing of carl ikahn. Its falling in a weak rental environment. Because of things like uber, people dont rent cars like they used to. The value backing is loans and bonds, worth a whole lot less. Hertzs junk bonds on the verge of being downgraded again. Revenue earned on marriott rooms, seeing the top end of marriotts forecast. Marriott has been conservative when it comes to predicting anemic expansion over the next three years. The Company Still sticking to after this pretty good first quarter. But marriott has now upped its pipeline bill to opening more than one hotel every 14 hours as they told us earlier this year. Marriott bumping up a dividend payout this week by 10 . The stock is on a roll. Despite the fact we had two travel executive orders signed in the first quarter. Marriott still up 30 since the election. Thank you very much. Lets start off with hertz here. It seems its at the crossroads in terms of secular trends in the industry between falling used car prices and the rise of uber. Its a death knell. Its not going away, in my opinion, anytime soon. B. K. Has been on this for quite some time. I dont know what turns the stock around other than at some point somebody coming in and saying, valuation is just too cheap. But guess what, valuation is going to get a lot cheaper, i think. It could. Carl cannot get out of it on 35 of it. Look at the other stuff that carl ikahn owns. He is actually catching the upside. It doesnt look good here for him. Wake me up at zero, thats exactly whats going on in the sector. Hertz has been in trouble for four years. It will ultimately get back to a Balance Sheet issue. Now its too early to do anything. I do love marriott. I think marriott is doing an incredible job of growing their business, theyre doing it correctly. Millennials are spending more money on travel than ever. I would bet on marriott on the long side. Coming up, the wireless war is teaming up as comcast and charter join the ring. It could spark a flurry of mergers in the mobile space. The vix falling near record lows as the s p and nasdaq hit record highs. But you might not want to hit the panic button just yet. Were on to you, diabetes. Times up, insufficient prenatal care. And administrative paperwork. Your days of drowning people are numbered. Same goes for you, budget overruns. And rising costs, wipe that smile off your face. Were coming for you, too. For those who wont rest until the world is healthier, neither will we. Optum. How well gets done. Welcome back to fast money. The latest round of the wireless wars, comcast and verizon are making amazing deals to stay ahead of the competition. Hey, julia. Comcast and charter are partnering for one year to improve their position in the competitive wireless market. Charter planning to enter the market next year. Both reselling verizon airwaves within their cable footprint. Charter and comcast saying they wont buy other Wireless Companies without consulting each other first. They aim to save on costs and better compete with the likes of at t, tmobile and sprint. Theyll partner on billing in getting customers to use their wifi hot spots. Analysts say this puts on hold any acquisitions by either cable giant. Comcast was pretty much flat today on the news. Charter trading downover 3 . Analysts say this could boost chances of a sprint and tmobile merger or potentially charter and comcast merging the regulatory hurdles are likely too high for that. I think its the first step of probably a longer term partnership. Obviously the two dont compete with each other so its in the spirit of cooperation if you will. I will rule out an acquisition of tmobile and sprint down the road. Thats not the only deal in that space. Shares surged by word on verizon offered to buy the spectrum company. Verizon stepping up the offer in a bidding war with at t, both of those companies saw their shares down slightly. Straight path is in high demand here because of its mobile spectrum that will give the owner an advantage in five g. It will be key for everything from streaming video on devices as well as selfdriving cars. Back in january it was mentioned the possibility of a couple of Cable Companies getting together and buying tmobile. Do analysts think thats a possibility . A possibility down the line. But we talked to a number of analysts today and they think the announcement of this partnership between charter and comcast means they will Work Together in the next year to work out all their back end issues, make sure they figure out how to offer Wireless Services to their customers. But for now, theyre unlikely to make one of those deals in the next year. Julia boorstin in los angeles, thank you. This deal seemed kind of strange. Unusual strange, right . What did you think . People talk about anticompetitive issues, i think this is a partnership to prove they can do something organically, if you will. If it doesnt work out in a year, it gives them a bigger, bolder statement to go to the ftc with it. So they look at it and say, does it take an acquisition off the table . It doesnt do that as long as they both agree on the structure. Within a year one of them can go out and buy its an elegant way of sidestepping this. You look at the synergies of cooperating, i wont say theyre fat, but theres room to cut some of this out. Theres no regulatory issues there. That makes some sense. I agree, it doesnt change the consolidation landscape for the industry. But infrastructure to me is where its most interesting. Yeah. So look at whats going on in the space. The space is obviously very hot right now. Somebody at the beginning of the show saying something happens gradually and then all at once. 5g is coming, people need to be in this space. Everybody needs to be in this space. Theres going to be a lot in this sector over the next year. Lets get to predictions. Those are always fun. Which prediction could be next years biggest wireless matchups . Im not sure. You look at a company like ericson, which tim knows a lot more about than myself. A stock thats basically going sideways for the last few years. Clearly the growth days are over. They probably have to go out, in my opinion, and make some acquisition that will make im not sure who they gobble up. Scary music. Tim . An 8 billion broadband infrastructure play. They have a giant, giant broadband bundle. Theyre selling to the current Legacy Service providers, selling to guys like google at a time when infrastructure is paying. I think these guys are going to be a target. For me its tmobile buying sprint. I know some people might think its the other way around. I think sprint buys tmobile. Its a more realistic combination. Sprint needs tmobile. No question about it. Tmobile does not need sprint necessarily. So i look at both of them up on speculation. If it doesnt happen thats scary music. Shifting gears. Mike joins us from austin to break this down. Mike, that hasnt happened a lot historically below ten. No. Actually, with eonly have vix data going back to 1990. Its only happened four other times. Now, basically when the market goes up, Everybody Knows the vix tends to fall. The opposite is also true. What happens when we get down to levels as low as this, below ten . In the little data that we have, we took a look and in the onemonth return, typically in a situation like this, is about. 39 . The sixmonth return is 6. 4 . Down 1. 24 . I think what happens we know that volatility means averting. If youre at the lowest level it can be, the only way for it to revert is volatility to go up. Thats usually not that great for the market. Yeah. I actually think this is one of the better trades out there right now. Just a buy volatility. You might want to do it through an options structure like mikes talking about. How much lower can it go . Not much. Check out the if ul show friday 5 30 eastern time. David seaberg, the biotech stock. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. 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