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tv   Fast Money  CNBC  April 19, 2016 5:00pm-6:01pm EDT

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>> financial engineering is sort of the flavor of the day. >> yield support is what you might hear. >> yeah. yield support. >> how nice. >> the girdle. >> thank you so much. that does it for us on the "closing bell" today. "fast money" begins right now. indeed it does. live from the nasdaq market site overlooking new york's times square, i'm scott walker in tonight for melissa lee. pete is here, and karen and guy adami tonight on fast. intel slashing jobs. that stock is falling this hour. yahoo! out with a beat slightly higher after hours. both those calls under way. we'll have full team coverage throughout the hour. all of the headlines coming to you as they break. plus, the man who called the rally, not once, but twice this year, says there's still room to run in this market. he's going to tell us the sectors he says will lied us to
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fresh all-time highs. tesla shares tumbling after "consumer reports" says the car has, quoen unquote, quality issues. what is the problem? the writer behind the report is here to explain. but first, we start with another year-to-date high for the s&p. with today's close, the s&p is only 34 points, or a percent and a half away from new all-time highs. the dow 298 points away from its all-time highs. the question tonight, are we going to break out? and pete, what could lead us there, if you think we will? >> i think the same things that have been leading us so far. if you looked at today what led the markets, energy and materials. when goldman sachs was talking about steel, they were talking about inventories being worked off, they put a conviction buy list number out on nt. you get in the material space. then you go to the energy space. we had rich ross on last week talking about the xle at 64. well, it broke through 64.
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day after day, we're trading above that. then add into the financials, because as we got last week, it started with jpmorgan, then we moved to bank of america, today we've got goldman sachs. the numbers continue to be okay, at least okay enough for this market. look at the way goldman sachs flipped around today. you've got financials, you've got the material space, and energy. i think that combination puts us higher. >> you've been bullish throughout and it's proven to the right place to be, tim. >> the dollar is weaker now, and i'm surprised people are shocked we can put more on the materials price. the dollar, it's part of that trade. but it's very interesting to me that people are piling into trades. the best time to make money is when things go from terrible to just kind of bad. so things aren't great. demand's not great, although i would say an aggregate, demand is stronger and is at levels it's never been at. demand continues to go higher. it's been a supply story.
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people have been saying -- that's part of a fundamental argument. stocks should be expensive. i same the same thing every night and i'll continue to say it until yields go higher, stocks are cheap with yields at zero. companies reporting right now are taking the pressure off investors who said, hey, earnings are going to be awful. and in the financial sector, guess what, they've been terrible. but we knew that. and they don't have credit issues. to me, i just find it very interesting that a lot of people are now chasing and upgrading the same things when the price was different two months ago, they were bearish on. >> guy, today was another day where it seemed bad earnings didn't really matter. you could have picked your choice to hang on negativity, whether it's ibm, goldman wasn't great, illumina yesterday. if you put it into aggregate, take everything together, you could make a case that the earnings stink, the rally should stop, and the rally keeps going. >> listen, i thought it would
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stop, and it's clearly 75 points through that. but today, goldman sachs, that is microcosm of what the market's about. pete said it was okay. realistically, goldman numbers were historically bad. the business was down from 25 to 50%. but the reversal is exactly -- >> look at that stock. >> look at the way it traded today. people say valuations are fair, they'll pull out of this, i get it. i still think there are headwinds there in the industry. but it seemingly doesn't matter. now the s&p is trading somewhere around 19 times or so. tom lee is here. 19 times forward earnings. i think that's rich. but to tim's point, maybe it's not -- >> goldman sachs, you know the company well. with the investment bank and capital markets business which seized up in the first quarter, in this environment, things are a lot better. these banks could reverse the pent-up demand. first quarter is a coiled spring. one of the reasons people are
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reaching for yields now. very quickly, that business could get healthy. >> i think that was the bet people are making today. very quickly, but you know, those businesses can be dormant for a while as well. i think people are betting that they won't be going forward. >> the other thing, karen, most importantly to the whole conversation is that the dollar remains weaker. so the biggest headwind for all for earnings, whether it's tech or otherwise, remains weaker, and that's helping everything out. >> right. and gas, one of the things, do you think the fed is kind of on hold? is the market trading like everybody else is throwing money? so we can't start to tighten. but to the goldman sachs point, goldman sachs, what a premier franchise that is. this quarter is bad. it's one quarter, they're spring loaded, they can cut costs which we saw them do. you get a few good deals and things could turn around. i think that's very attractive
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here. >> we'll get into intel and their earnings and the stock fall throughout the remainder of the hour. it's another stock that people are going to focus on in the trade tomorrow morning. and decide what they want to do. >> i think that's great. netflix -- i think the stock market has done what it's supposed to do, very, very expensive companies are selling off that have competitive threats. we talk about this market like, hey, do you think it can go up? it's up 13%. i don't think of this as a market that's up 13%. i think of it as a market that's flat on the year. and we're back to some level of sanity. >> only because the move from february 11th -- >> i can do the math. >> you can look at every sector in the market since that period, whether it's materials, you know, so many of the others, almost every single one is up double digit percentage points. >> the aussie dollar bottomed in august. a lot of materials stocks bottomed late last year. i look at the fact we're 13% up. oversold, things are up 20, 25, 30. but that wasn't the right level. china wasn't blowing up.
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banks weren't defaulting. that's why this feels so extraordinary. >> it's been a dash for trash. it's tough to deny that the demand is there to actually push some of these stocks at way from the february lows. can we actually say to ourselves right now that steel and the rest of those are really -- they should be moving the way they have. i would say absolutely not. but is the -- >> iron ore has obviously helped some of the mining stocks. >> huge shortage. a lot of the panic in the buy. and the rails. but also, go back to the one thing that we started the show with, goldman sachs. how about the financials. since we started those, judge, we're talking about an area where you look at the valuations there. they are really cheap. i'm just telling you, those aren't trash. those are names that as things start to change, as the economy gets a little bit better, those names will perform to the upside. >> the trash also is very often so levered. the stocks can move. >> sure. >> a lot. 100%, 200%, and the enterprise value not move very much. >> let's get to a man who's been
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on the right side of the market for quite some time. back in august when stocks traded down to the crash flash lows, tom lee came on this very program and said this. >> i think the reason you shouldn't get too discouraged is that 90% of bottoms, once you bottom, are v-shaped to go from its peak to yesterday's decline, it would take us roughly 50 days to recover to those old highs. >> 50 days later, stocks reclaimed their highs. but they soon fell back to 1800. and when they did, tom lee once again appeared, this time on the halftime show and said this. >> it's welcome to see people sort of give up on the market, right? because you do want sentiment to be really negative. i do think there's catalysts in the next few months developing. and i think that's why it's possible for the market to actually have a really nice rebound. >> so you get the point by now. the guy's been right on the money. he's sitting here with us tonight at the desk. tom lee is back.
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>> thanks. >> you've been right. it is what it is. what happens now, though? >> well, i think clients are kind of stepping back and trying to reassess and ask the questions you guys have been asking. i think it's to us really easy to visualize the market, not only make new highs, but delivering double-digit gains this year. it's not like it's a fantastic observation. in a bull market, 10% gains are most of what happens most. >> it may not be a fantastic, you know, prediction in sort of your words, but certainly counter to what a lot of people think. >> that's right. the last 12 months have been very tough for folks. there were classic signals that would have made someone think, this is an '08 crisis, or a bear market. but there were other things that i think would lead you to believe this was a correction. i think that's obviously what's made it very tough. >> karen? >> when you talk to clients, which is more difficult for them, to buy when we're at,
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whatever, 1810 or whatever it was, to buy in that scenario or to buy right now? >> they have different issues. in mid-february, there were enormous controls put in place in what our clients could do, in terms of liquidity management, or they couldn't stray from their mandates. i think it was very tough for people to sort of add risk. i think the biggest mistake that happened in february is people derisked. today i think those constraints aren't in place, but i think there's enough people who think this is just a bear market rally, and so they're hoping for markets to go down. i think the positioning is still a big story. and that's why we trade heavy, and that's why we can rally so easily. i think that's why making highs isn't difficult. >> is it the same sort of value overgrowth, the dash for trash stocks that pete talks about, the cats, the valets, the commodities, the materials, what takes us? >> i can put it simply that i
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think there are two things to think about. one is the dollar is reversing. and it's helping commodities. and it's helping these credit conditions. i think it's bullish for the energies trade and multinationals and for the banks. that's 60% of the s&p profit. i think it's an earnings story that can push to new highs. >> an earnings story, so we're a couple weeks into this earnings cycle. how would you scrip the earnings you've seen so far? >> i think delivered results have been terrible. but i think they're not surprising. i think there is -- you know, i would say that there is wiggle room and a lot of guidance. management doesn't necessarily have to acknowledge it. they're not going to say the dollar's turned so we've got an upside. but i think what you now realize is earnings now has weak dollar in it. the dollar could stay flat and it's become a tailwind. i think it's not only volumes better, and we're seeing the pmis, but it's real upside. >> what happens if the fed pulls
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the rug in june? >> you know, you're going to have the same -- >> there's a real possibility. >> yes. i think the fed will create some turmoil. and i think people sell their rallies. i think you've got to buy the dip. you've got to buy the dip. one of the things we've been recommending with clients that's worked really well is focus on what i call yield parody strategies. 87% are beating this year. ibm, you know, today, but qualcomm, you know, it's jpmorgan, it's a lot of staples, a lot of tech, a lot of industrials. i mean, it doesn't concentrate in a sector. >> tom, good to see you. >> great to see you guys. >> tom lee back with us. pete, what do you buy in this scenario, if you believe what tom just said? >> one of the thing you talked about is financials. i'll go to karen's favorite, bank of america. they reported last week the stock's been moving to the
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upside. they reversed after their earnings as well. today was higher once again. it never really followed goldman sachs. but yesterday, 82,000 of the july 15 calls were blocked. that's a real commitment there. when i see people step in like that, suddenly today, look, open interest 93,000, that tells me the financials specifically, those names that are trading underwater, in other words, you look at what this thing is trading -- >> low book? >> well below book. it's around 21, 22. stocks trading in the low teens. i think the opportunity there for growth is much better. that's why i've said time and time again, love jpmorgan. i think the best management there is in the financial world. but not as much upside as i think bank of america. >> okay. you like bank of america. you like citi even more. i would just say if the fed is back in play, the perverse thing here is actually the banks look pretty interesting, right? even though the fed was knocking the market on its tail. what we want is the goldilocks where the fed manages this
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perfect landing. they're not going to do it. volatility is too low right now. the market is not going to scream hee r higher. i think we said this last night, i think the vix is going to have 230 moments. >> 13? >> the greatest opportunity. the reason i don't disagree with you, but i would say this, for those that want to, and i'm one of them that wants to ride along with what tom's talking about right now, yes, there are going to be bumps. you own spider puts against your portfolio so you can ride along and not miss these kind of runs that we're seeing. >> i actually sold jpmorgan today which i haven't done in a long, long time. people flipped out about the oil exposure, which was so overdone. jamie dimon buys 2 million shares. now this great company, it's not expensive. but relative to the other two i think there's less upside. >> what about wells? cramer said if oil continues its recovery, wells is tied very much to where that goes. and that wells is a stock --
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>> i love wells fargo. to a certain extent with bank of america and jpmorgan. they're all the same, very similar companies to me. if you're asking me where i want to be in the banks, it continues to be in the banks that has more modest managements and conservative managements. i mention this, gdx, look at that today, another 52-week high. up 4%. >> pete's talking about it. >> there's clearly something going on in the gold market. >> riding that gold. don't look now, but old media stocks like time warner and cbs are killing netflix this year. tesla shares tanking on a "consumer reports" article that says the model x has some serious quality control issues. what is the problem? the writer will be here to explain. yahoo! out with a beat. intel cutting 11% of its work force, some 12,000 jobs. the stock's falling as well. the latest headlines from both conference calls when "fast"
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great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. welcome back to "fast money." old media versus new media kicking off our top trades tonight. since the start of the year,
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so-called old media stocks are on fire. time warner up a whopping 16%. and cbs also seeing gains of more than 16%. netflix shares, however, after last night's earnings are down nearly 16% in the same time frame. what's going on, pete? >> the problem is, people are looking towards value. they had to produce -- they did not produce well enough. it's not good enough right now, especially the way netflix has been trading. people are staring at all the various stocks that trade with these incredible multiples. there's not much room to make a mistake. go to the old line media, however, they seem to be doing well. i agree with cramer, he talked about the fact that they are competing with hbo. that's where he's looking. he's not looking at the amazons of the world and hulus and so forth. he was looking toward hbo, and he thinks they can beat hbo. >> it's not just about hbo.
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that's not really the point. >> there's competition, no doubt about it. >> what's troubling to me, my basic view as a guy that invests around the world is the cultural assimilation of the whole netflix model is something you cannot guarantee in certain parts of the world. they couldn't explain why international sales, they launched the rest of the world, they power packed it and jammed it all in the first quarter. it should be soaring right now. the international numbers should have been so much better. they can't tell you why. stock traded horrible today, after-hours last night we were saying, hey, give it a chance tomorrow. big buy-in. closed on the lows. closed below 95. i think the stock goes lower. >> it's a sentiment shift that's happened here. i think the guys this morning made some pretty good points, cramer and faber. when things are going on, you look at the great shows. today it's focused on amazon's competition now coming down the pike. >> you're a fan of chips,
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though, right? >> no doubt. >> eric estrada. >> i loved that show. >> let's keep moving. >> i was going to say, there are chips out there. >> there was a briannea, and there was another female cop that i thought was -- >> keep digging. >> sergeant gerrard, too, i think, right? >> i actually think it was gerrardo. >> are you digging a hole? where are we going? >> drop the shovel, man. >> drop the shovel and walk off. as we head to break, here's a look at yahoo! going higher and intel falling hard. we'll bring you the market moving headlines as they break and get instant analysis. i'm scott walker.
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you're watching "fast money" on cnbc. in the meantime, here's what else is coming up on "fast." that sums up the emerging markets the last year. but a new note from bank of america has investors taking another look. we'll tell you what has the bulls so excited. plus, tesla shares falling, after "consumer reports" said the model x faces a, quote, quality issue. >> what you talking about? >> the writer behind the article will be here to explain when "fast money" continues. thanks man.
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welcome back to "fast money." i'm seema mody with a news alert on the s&p 500. global payments is set to join the index s&p 500, close its acquisition of heartland payment system around april 22nd, giving it a market cap that pushes the company up to a large cap. and therefore, the s&p 500 replacing gamestop in response. we're looking at global payments, the stob up about 1.5% after hours. >> seema, thanks so much. gamestop is interesting. not a big valuation. people tried to write these guys off for years now and have not been able to do it. trades 6 1/2 times forward
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earnings. the most interesting thing, about 4.5% dividend and 42% short interest. if they sell this thing off tomorrow, i think you could take a shot in earnings in about three weeks or so from now. they just had their investor meeting. they didn't say anything that was ridiculously bad. i think you buy it. >> the eem, the etf that tracks emerging markets, rising 1%. move coming as bank of america put out a note saying that for the first time in five years, they've become structurally bullish on emerging equities. five years. >> which i means i guess they sold it at the top. this has been a 5 1/2-year downward trend. underperformed the s&p by almost 60%. after outperforming the s&p by about 1100 basis points off the lows back in january, em is a buy. is it a buy? first of all, the currencies have stabld, you immediately reverse and latin america goes from minus 8 eps growth in 2016 to plus 10. we're in a place where if you
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think the fed's out of the picture and think the dollar's weaker, i think emerging markets have already started to make the change for the fed. i think fed hikes are ultimately good for emerging markets. because they made the adjustment. again, it's very -- >> i don't know about that. >> you think so? >> i think -- >> it's when the fed starts moving, the wind comes out of the sails of the rally. >> it will be awkward, but ultimately they want this thing to normal size somewhat. don't chase this rally tomorrow. i would say 36 on the em is a selling level. get back up to where we were pre-august when em really legged down. it's had a fantastic run. if you've missed a very big run, interesting that people are getting very positive now. why are they positive when they weren't positive in january? china's better. eem 60% asia. know what you're buying. >> if you look at the moves we've seen, brazil, incredible. russia, india, taiwan, et
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cetera. >> cash for trash in my opinion. look at the ewz. i was part of this trade. i got out on friday. i just put it on again today. i couldn't resist. i look to where they were actually buying the options. they're going all the way out to january. the eem, the huge call buying that we had seen in there, as that stock suddenly started moving to the up side. when you look what is within these, scott, i think you have to be concerned. for instance, what's really moving right now in the brazilian stock? look at the ewz, it's financials, it's energy, and it's materials. >> that's the market. >> that's great. but do people want to go after those brazil after the move it's already made? or stay in the united states? >> that's a totally fair point. i'm not even going to argue with that. intel, the call is halfway through right now. that stock remains lower. there it is, down more than 2% after hours. we're going to hear from the company's ceo on the quarter, and those job cuts we told you about at the top of the show.
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yahoo! its call is well under way. will marisa meyer say anything about a sale?
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welcome back to "fast money." the dow and s&p 500 both posting gains for the fifth session out of the last six. the s&p crossing 2100 for the first time since december 21st. materials and energy helping to boost the market higher. here's what's coming up in the second half of "fast money.." tesla hitting a roadblock. investors are running scared. the author of the report is with us tosts. shares of intel falling after the company said it will cut 11,000 jobs. guidance was weak as well. the call's under way. we'll hear from the -- we'll hear the latest from the call later in the hour.
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let's start with yahoo!. that stock is moving slightly higher after hours. josh lipton out in san francisco, monitoring that call for us tonight, josh. >> well, scott, the big question for investors, of course, is what's going on with that auction process, and ceo marisa meyer addressed that right at the top of the call. take a listen. >> our board, our management team, and i have made the strategic alternative process a top priority. our strategic review committee is comprised of independent directors well experienced in strategic transactions. they're leading a well-run process to achieve the best possible outcome for our shareholders. the management team and i have supported the board's process from of the start. and we are moving expeditiously. >> so not a whole lot of specifics there. not a whole lot of details. worth noting, though, today that rico did report that the list of potential acquires now really down to verizon, tpg and vista
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equity partners. a firm that does include former yahoo! execs. scott, back to you. >> josh lipton, thanks so much. let's bring in bob peck now, the analyst at sun trust. he is manning the call on the red phone. allegedly connected to the call. bob, welcome back. >> thanks, scott. >> i can't help it, it is what it is. what's your take on this stock? why do you think the stock's moving higher? >> a couple of things. first, the core remains challenged. research is down 20%. display is barely flat. all reclassified revenues is helping these numbers. and the key driver here, the key thesis, 45% last year, only growing 7% now. clearly the melting ice cube problem is continuing to go. why is the stock up, though? i think it's because they're making progress on the most important thing which is this process. we think there are at least five to seven bidders. probably some of the less for private equity.
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we think if that doesn't happen on time, you also have the proxy contest coming. >> so none of the move has anything to do at all with fundamentals, right? they beat extraordinarily low expectatio expectations, clicks down 21%. marissa mayer on the call said it's a priority. >> exactly right. the real takeaway here is the process is on track. it sounds like the first-round bid were accepted. we're looking at them right now. whether you get 5, 6, $7 billion for the core, that's not the key part of unlocking the value here. the key part is once the core is gone, all you have is the are securities. >> thanks for coming on. ultimately, i think that's the big picture we should all be thinking about, what does, once we get the core out of the way, talk a little bit about the next move. and talk about tax efficiency and talk about what they could
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possibly do if the rest of the stuff is out of the way for them to step in and beat the tax-efficient buyer. >> there will be taxes on the core, we think between $1 billion and $2 billion. the most likely outcome would be alibaba solely issue shares, and then buy back the remaining share through yahoo! at a discount. the best part is, in the transaction like that, you wouldn't have any taxes. in that example, yahoo! would avoid 100% of the taxes which would be great for shareholders and give you a mid to high 40s target. >> we'll check in with you later. thank you, as always. bob peck there. what do you do with this stock? >> i don't know. i feel like they've been doing this quasi for sale, maybe, yes, no, for a really long time. and so i don't know if they get a lot of value, i'll miss it. if you want to take the alibaba bit -- >> does anybody on the desk see reason to buy this stock?
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>> if you think alibaba is going to go higher. i think you have to believe alibaba trading from 60 to where it is now, 80, you stay there. al are we in a move again where it rolls over? i don't know. i think you have to have a view on alibaba before you buy yahoo! right here. >> if you put the core at $7 billion, and you keep alibaba -- if you get a tax efficient outcome, i think the stock, again, depends how tax efficient. i'm long on alibaba as well. i think this is good news. karen is right. this has been a side show for a long time. why are they going to do it now? i think these guys are pushing for change and they have to -- their feet are to the fire. >> there are too many question marks to be in the stock itself. i would far prefer to be in the options. that is the only way to play
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this. because there are so many questions out there. i know bob peck just talked about, there seemed to be multiple bidders. just the other day we were talking about the fact that there are just a minimal number of bidders out there. is there really just two or three bidders? is there five or six bidders? that will really change the numbers significantly if there's not really as many as bob's thinking there might be. >> if you think that verizon, for example, is bidding against itself, that changes the dynamic of the way you would look at the stock. >> that's why i think no matter what, the options are the only way to play this thing. check out shares of intel falling after it says it's going to slash 11% of its work force, some 12,000 jobs. we'll hear the latest from intel's ceo about what's weighing on the business after the break. is the gold run finally over? we'll tell you what happened today. traders betting the hot trade is about to cool off, that's later on.
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welcome back to "fast money." intel falling after hours on earnings the company announcing it's going to slash 12,000 jobs, or 11% of its work force. dom chu is back at headquarters with the details. >> so this is all part of a broader restrek turg where one of the biggest tech giants out there is trying to reposition itself to be more effective and grow more steadily down the
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line. intel shares have held steady in the after hours, this as the conference call is ongoing right now. but earlier on in an exclusive interview with the "closing bell" team, the cfo, soon to be moore, but stacy smith is going to take on a lot more of the sales role, operational roles within the company. he said there are quite a number of things that are going to drive intel's success going forward. it's not just going to be about traditional pcs. take a listen to what he said. >> we're in the middle of this transformation as we move from being a company that's been historically at the heart of the pc market to a company that is now at the heart of the cloud. and surrounded in inside of the smart and connected devices that are connecting to the cloud. we're actually executing quite well to that transformation. you can see it in the first quarter where we're trading growth, even with a weak pc market. but what we want to do now is accelerate that transition. >> now, guys, to that effect, on
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the conference call just a few moments ago, the current ceo of intel, spoke a little bit more about what he expects to be the growth drivers as well and how they will impact the business going forward. >> the data center, internet businesses are now intel's primary growth engines. combined with memory, it's a cycle of growth. >> guys, so cloud computing, key buzz word there. also the internet of things trying to connect our lives together. as well as these things that people use to custom build circuits after they've already been produced and delivered to clients. so again, all of these things are going to be part of intel's future. scott, like you said, it all comes at a st could, thousands of jobs lost by the middle of 2017. >> i don't know how you view these things. but can you view sort of ibm, intel, hp within the same prism of the secular declining businesses, companies that are attempting massive turn-arounds?
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they have yields, they have dividends, they buy back their stock. do you focus on the negative or look for the engineering part of the story and buy these stocks? >> microsoft did it, and they did it successfully. ibm has been doing it now for the last seemingly three years, unsuccessfully. >> four. >> or four. you almost have to give them a pass, i think. qualcomm, for the last three years, that's been a declining stock. so it begs the question, if intel is trying to pivot, is it too late for qualcomm and what are the earnings going to be tomorrow. i would be more scared for qualcomm tomorrow. >> the pivoters, the intels, microsofts, ibms. >> microsoft understood what they needed to do. that's why he was the right person to put in that role. because he understood the process and he was coming from the cloud. i say the same thing and we brought it up today on the halftime, cisco, i love what robbins is doing that, and
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that's happening even faster. i like the pace they're moving as well. >> he's probably taking share from juniper. >> absolutely no doubt. i think they're gaining share. i think the problem for intel is they are still strapped for the latent business. they have to get the transition, the whole thing has to happen faster. the internet thing is going to be huge. a lot of that is tied to the -- >> i think they're doing it. i think, again, data center is growing -- >> intel is doing it? >> not fast enough. >> well, it's a major turn. and these are people -- intel was going to miss mobile, too. they slowly remade their business. pc will be worse than we thought. so we thought we were down 11%. probably going to be high single digits for 2016. get that into the price. data center more than makes up for it even though it will be a slower process. technically, the stock looks pretty interesting here. you've actually got 50 crossing over the 200.
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around 31 bucks. >> i think it sounds like you're starting to say the same thing, is this is a story a little bit further out. i think cisco is a now story. this ibm and some of the legacy businesses that are strapped now, i don't think it's a now story. >> you have a dollar story at play here, too. >> 82% of their sales are coming from overseas. a lot of that's asia. you don't have to jump into it now. intel doesn't typically trade the day after earnings in the after-hours. >> you wouldn't be surprised if the stock is higher tomorrow? >> i think there's an overreaction on the reshuffling on the corporate side. let's get to the core business. the core business is not broken. >> i agree. of all of them, i would rather be in intel than any of the others. i think eventually they'll get it right. it's not crazy cheap, but it's not crazy expensive either. a new consumer report about tesla tonight, why he thinks
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tesla has a quality control issue. gold miners up about 70% this year. could the party finally be over? we're going to tell you why the traders are betting on a major collapse. you're watching "fast money" on cnbc. first in business worldwide. i could get used to this. now you can, with the luxuriously transformed 2016 lexus es and es hybrid. ♪
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shares of tesla falling after "consumer reports" said its quality x has quality issues. mark, thanks for being with us tonight. >> thanks. >> a stock we talk about on a very regular basis. what's the issue that you guys found with the model x? >> well, "consumer reports" typically recommends against buying a vehicle in its first year on the market. there's usually teething problems that you have with an all-new vehicle. something of tesla's technological complexity, you have a lot of them. the thing is more complicated. the second road doors swing upwards as opposed to outward. they've been having issues with them not wanting to open, not wanteding to close, not detecting something overhead. also things that are carrying over from the model s sedan, such as the beautifully laid out
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but really buggy center control stream. >> you there? >> i am. >> i apologize. they were talking in my ear. you say that the problems with tesla are dramatically more impressive than other vehicles. what do you mean by that? >> well, typically when you see a new vehicle of any sort arrive on the market, you know, sometimes you'll see things, you'll hear wind whistle that shouldn't be there, sometimes the transmission might be a little clunky. but the it still works. these are problems where you may not be able to actually operate the vehicle. if the front door won't open, you can't get into the vehicle. they went for something that was really a technological leapfrog from pretty much anything else on the market. and also, it's pure electric. it runs on batteries. and there have been problems with the model s sedan that preceded it with some of the motors and battery packs that re required replacement. >> it sounds, with respect, of course, that you have a problem
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with tesla in general? you're listing off some of the issues that you could make a blanket statement about tesla in general if you don't like the story? yeah, they're electric cars, that's what they are. >> well, but they have about 200 miles of range, sometimes more depending on the size of the battery pack. one thing in tesla's favor is they are making dramatic moves to improve the quality levels. for those cars that do have problems, they make very rapid repair rates. interesting thing in our data of owner satisfaction is despite all these mechanical problems, tesla still has the highest satisfaction of any brand on the market. you talk to owners and say, would you put up with this if it were a mercedes or lexus? they say no. they want to be on the front line of technology and want to be beta testers. >> how is it that they release a car, and it seems like they continue to do testing on it after it's been released, and then some of the bugs come up,
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with seeming more frequency than for other manufacturers? what's the methodology, or what's the bar they say, all right, it's good enough to release? >> well, i think you have to ask the company that. but i think from the perspective, they look at themselves more like a tech company than an automaker. while they're still making boutique volumes, 10,000 units here, 25,000 units there, they can sort of treat themselves like that, like you would a ferrari or maz a ratty. but with the model 3 coming out in late 2017, they're going to be exponentially increasing their volume. this is a sedan that's going to cost $35,000. they're looking at making about 300,000, 400,000 units of these a year, and expect them to operate in a traditional fashion and not have these sorts of bugs. that's going to be a huge leap in terms of manufacturing, technology, ability to replicate, and ability to scale, to make these much more reliable out the gate. the people who buy those cars won't be going to be beta
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testers. >> mark, before i let you go, have you heard from elan musk, and do you expect to? >> we keep in touch with tesla on a fairly regular basis. they trust our database. they trust ourknowledge. have owner response rates, over 3 million responses in which tesla represent a very large percentage. when we've come out with our reliability data later this year on the model x, i'm sure they'll be very interested to see those polls. >> you haven't heard from him directly rartding this specific article questioning their quality issues? >> not today, no. >> mark, thanks for coming on. appreciate it very much. >> my pleasure. thank you. >> guys, let's trade this story. >> i would just say, mark says consumers are ready to be beta testers on this, i think investors are ready to be beta testers on it as well. >> all the way around. you had to be. that's what the story is. >> to me this is a story that's all about a wish and a prayer,
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and the model 3 is really the mass market car that it's supposed to be. at 260 times earnings, deliveries aren't even measuring up. demand is there on the smaller scale. whether there's mass scale, i don't think so. >> we've got to go. >> let's see if eric estrada has responded. >> he has not. >> that's a shame. >> i thought you were asking -- i thought you were going to ask mark that. >> if he had heard from eric estrada? now to the gold miners. max meyers says in my ear. the gdx up 70% this year. one savvy trader said the tide is about to turn. mike is with us from austin, texas, with tra trade. mike? >> sko we saw well over two times the put volume today in gdx. what we saw was a big purchase of the may 25, someone paid 23
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cents for 20,000 of those. almost 25,000 of those traded hands. essentially that's betting 1% of the current price of gdx. we've got two of those minors actually reporting earnings very soon. >> mike, thanks. check out the full show 5:30 p.m. eastern on friday. next up, the traders show you what they're watching tomorrow. 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.
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it is time for the final trade. let's start with our man, bob peck, on yahoo! >> round two, the alibaba analyst day. $44 target. >> bob, thanks for being here two nights in a row. thank you very much. bob peck, and pete, your final trade this evening? >> i like the financials, bank of america. i talked about that activity yesterday. bank of america is going higher. >> i'm going adam 12. >> what's your final? >> 100 on mod squad. i have to tell you, intel, the numbers aren't so bad. 28 is a stop on that. >> huge crush on the guy from emergency. randy matthews. trying to sell a little bit of jpmorgan. great company. >> guy? >> adam 12 emergency, s.w.a.t.
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or chips. >> thank you for being here the last two days. >> big earnings breaking out to the upside. >> say it. giddyap! >> thanks for having for havin. mad money with jim cramer begins 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. mad money starts now. >> i'm kramer. welcome to mad money. my job is not just to entertain you, but to explain. so call me at 1-800-743-cnbc or tweet me nicely


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