that's part of what america is about. obviously rahm was stressed. he performed wonderfully and the chicago police, chicago's finest did a great job. under some significant pressure and a lot of scrutiny. the only other thing i will say is thank you to everybody who endured the traffic situation. obviously chicago residents who had difficulties getting home or getting to work or what have you, what can i tell you? that's part of the price of being a world city. this was a great showcase and if it makes the folks feel better, despite being 15 minutes away from my house, nobody would let me go home. i was thinking i would sleep in my own bed tonight and said i would cause worse traffic, i ended up staying in a hotel.

that contributes to the chicago economy. thank you, everybody. >> we have been listening to president obama making statements in chicago after the nato summit, talking about europe he said bankinglies must be recapitalized and fire walls must protect against contagion and everyone in the g 8 expressed desire to see greece remain in the euro zone and commented about republican nominee mitt romney saying that he is not running on has massachusetts record, but a business record to maximize profits which is not always the best thing for the community. there you have it. president obama making comments in chicago and let's get to it. fast money starts now. >> tonight on fast money e it's been a long time since i can say this. stocks rally. investors feel uneasy. >> facebook breaks in the hip. $34.97. now we are entering the point of

the original range, the low end. >> it didn't help that the ipo of the people has no friends. they have been returning to their old fling. >> maybe the money that is not going into facebook from friday is going into apple. >> apple is as valuable as it was a month or so ago. >> you have a significant pop out of apple. >> we don't know what's going on at jpmorgan. >> it is reported that your company lost the money because of the risky trades. >> it is not an actual whale. >> they are on hedges and don't need no friends. let's get trading. it's time for fast money. >> live in the nasdaq in new york city's time square, i'm melissa lee and finally stocks mustering up a strong rally. the nasdaq posting the best day of the year and triple-digit gains in weeks.

number one walking on to the traiting floor, what was it? >> more of a relief and a lack of a negative headline. we are bouncing off key technicals. the area that most are pointing to. for me, i have to see a sustained rally above this level which is 1333 or 1340 before i would really start feeling good about this rally. i think the downside is probably what i stated. i am looking for 1257 sooner rather than later. >> 100%. to me it's 1325. the level that kicks in. you will probably see the market rally again tomorrow and or nine big figures in the s&p. i am in the camp that until we can close significantly above 1375 that the market is -- you sell old rallies. you get a follow-through tomorrow and 1292 is an interesting level that we traded up to on october 27th and

subsequently collapsed from. that's where we held. 1325 first and we will see what happens there. >> it is the kind of rally that everybody hopes and dreams for. a broad base rally. materials, you name it. >> it was and it stayed higher all day. the pattern has been that over the day and it deteriorates into the close. it started last evening when premier went out of china and talked about a growth and easing more and stimulate into chinese economy and we had talk about what might happen at the meeting on wednesday where france, italy and spain may start to have a radical plan and are actually movements towards growth and away from austerity and maybe europe is coming off a bit. we have a period of time between now and june 17th, the greek elections that we have the window where we could rally. 1370 or 1380, but at that point you want to protect yourself.

>> so much talk about a greek exit and that's why the financials didn't do as robustly as the rest of the market thanks in large part to bank of america, jpmorgan and morgan stanley. there is a 90% chance of a greek exit. a 90% chance that. makes it inn vestable at this point. >> there is two separate things. the greek exit and the jpmorgan news, morgan stanley had their own issues and how costly is the facebook situation for morgan stanley? don't. that weighs on morgan stanley for sure. dha it to themselves. of all of things that jamie said, the suspension of the buy back is the most troubling to me and can see how the rest wouldn't rally at all on the heels of that. i agree. i was surprised that the rally held and thought we would fade, but we are back to where we were

thursday. >> they brought up the comments from premier. if you look at the risk assets, i want to look forward, not backward. you see a lot of movements. i'm not sure they are head faked. wlt and alpha. >> they probably are a head fake. they are really restructuring and you are not going to get that demand growth and copper that they used to. you might get a pop here, but i'm not sure and i know i wouldn't be buying fre port mac saying i am going to get a 20 or 30%. >> ivan hoe mines that you see get pummelled. at what point do you say the risk. $9.5 at this point. china has been swamped in copper. at a certain point you have to take a flyer. >> that's what you are doing? >> the met call space. wlt has been hammered. a and r is hammered. if you start to look at these

things, i know i sound like based on value, they look at technicals and valley, they are way too cheap. >> and how long of a trade is this? >> you have to be careful in light of the fact that the overall market still looks weak. i think you have to be a buyer in these names. 10%. it used to be 20%. now it's 10%. >> just to tie up the financials, morgan stanley that have been a grim death since the middle of april is at levels that might be interesting for a trade that was below 13ish. the same levels that bottomed out. as many warts that might be on morgan stanley. it sets up nicely and will head higher here. you buying this rally today? >> no. you can't see because i'm off camera. i am shaking my head. >> we can see him or is it just

me? >> you didn't see him shaking his head. >> it's like a ghost. only i can see you. >> i like the auction today from a short-term perspective and lighten up on the things that are hurting you. i have stocks like everybody else. we are station cash heavy here. let's face it. the supply and demand picture is whack. all of the charts are broken and coal names that are down 50% and that doesn't repair much. at the end of the day, this rally is based on statements from european minsters and the guy who runs china. it's like a joke. none of this will be growth oriented. >> what were the first stocks you went to sell today? >> we were lightening up on the bounce. if it bounces again, heaven forbid. we will sell the rest of it. if you look at the incidental exposure we got in things like industrials through etfs, we are

looking for things to sell in the bounce. this bounce can last all week. we can go threw or four days. i think this is the kind of thing where you say it was bound to happen. 13 out of 15 days down on the dow. let's take advantage and not act like something's change and we are growing again. >> let's talk about the stocks that had a huge bounce and one of the best performers. this afternoon, take a look at the pop and we have been talking about the dynamic of apple being the source of funds to buy a facebook allocation and there is no coincidence that we saw shares down 11% and they pop almost 6% on the day. >> i don't believe in coincidence. it sort of mirrored the march lows that we saw. you have a tradeable bottom. i still think that apple will push towards 590. i think it's important to see what happens when we reach 600.

the last two times above it is not like. with all of that said, i would submit the next 25 to $30 is higher. >> if you are looking at apple and you want to place the trades, you are a little more cautious like most of us, get into a verizon or at&t. you are still going to get the benefit from iphone being sold. it's not going to be the rocket ship that apple is, that's the way i would do it. >> that's really quick f. we know apple is used as a source of funds, once facebook starts to turn around, once it starts to turn around, we know where they're pulling the money out. at a certain point, don't you think it's sooner rather than later? >> no. >> crickets, crickets. >> i get the argument that facebook will be in the index and the amount of that in the index, but i don't know.

i wouldn't sell apple to buy facebook. >> you wouldn't, but people did. if we know that the funds came from apple and priceline. >> if they trade down, not up, then what? >> then you start to see money. exactly. once you see facebook reverse, that's going to be indicative of the other names. we know a lot of these guys are rusty when they get back into the name. they turn around in huge ships. >> let's hit the market and the mystery of the day. roughly a percent, but with the rally in the markets, you might have wondered why would we see a bigger spike here? a contrarian out there, we were discussing this on a conference call and saying what's up with yahoo and could it be that this is just cash for the business and it doesn't change anything? terms of the revenues? >> one of the notes i saw, the big question was how is yahoo not up 10%?

the core business is unaffected and what they have given up is say portion of the call option they have on asia and clearly they had to do it. they were under so much pressure. is this a great thing if you are an investor in the company. the market said no. >> you couldn't see me off camera and i was punching a picture of you. i wanted to have a come back. >> you win. >> scott nations got a trade on yahoo and walk us through. >> i'm with josh. the yahoo action was really surprising. a little disappointing, but part of that is the facebook fallout did not do well today. i think that yahoo came back down to earth and it was kept closer to dearth because of that. much of this will be used for a yahoo buy back. i am bullish. the way i want to do is use a call calendar and use the option

max to my advantage. the call calendar that i would buy is the july october $16 call calendar. what is that doing? buying the $16 call, paying $1.20 and selling the judge $16 call to reduce the cost and collecting 75 cents for selling the judge call. the whole thing cost 45 cents. if we get past the expiration with yahoo below $16, it's all upside. we are lowering that october call. >> thanks a lot for that. we have to talk facebook. it's 12 or 13 minutes. we haven't addressed directly the fact that facebook not only broke the price, but in a bad way. >> very bad. horrible performance. i don't know if they abandoned the morgan stanley and it would seem abandoned any bid at all, still i think the valuation is

ridiculous. i'm not getting it. i think we are going to talk about it more in detail. they never should have priced it where they did. >> it's staggering that there is no short horses in the market. there no options being traded on facebook. it is just selling driving the stock lower. have you seen anything like this? >> no, but the only thing about-face book is from the get go, mark zuckerberg said i am not going to run the company. they wanted to get richer than they were. they went public because they had to. i'm not sure all the ipo met works worked. it's a lot of hullabaloo. >> the whoelg thing on friday makes me think guys were ready to sell. once we have the delay, you started to see a lot of guys get antsy and wanted to shoot first, ask questions later.

that could have exacerbated it totally. >>or the best day for technology and who knows when, facebook shares down 11%. the analyst said the downside risk is $33 a share. we are pretty darn close to that. we will have them up next. it's months since dennis made two of the moves he made today. what he is trading right now and why he pulled the trigger. after this.

>> facebook finished lower by 11%. should you still friend the stock? eastern internet analyst initiated coverage today and initiated with a positive rating. $48 and herman, your downside

risk is 33. given the stock is at 34, would you consider that the downside risk could be greater at this point? >> i think right now it's still fair since we initiated coverage today. i think the stock is down for a variety of reasons including short-term trades and guys expected a pretty big pop in shares and didn't see it. exiting that stock. it's a supply and demand issue where there is more shares that came out than expected. >> let's talk about the business model. it derives the majority of the revenues from advertisers. general motors pulls interestingly enough on the eve of the ipo and said they are doing the same with the europe bowl. my push back to that is if general motors, maybe the largest advertiser on the planet is pulling from not only facebook, but the europe bowl. what does it say about the

industry and facebook's potential in the industry going forward? >> i think with gm, very specific type of what is going on. they have basically rejiggered some of the agencies so i think that has triggered changes along with the social media and the europe bowl that you just mentioned. from that sense, i think, but keep in mind that ford is a big advertise or facebook. at some point, maybe not today or tomorrow, bithinkut i think will see their competition do well and spend on facebook and start to get a lot of traction and that is something that you can't ignore. >> the most bullish thing or case that i have heard for facebook is they earned $9.51 per user where the "new york

times" for their digital subscribers earns about $156 a user. to me, if facebook can even do $1 or $2 more, it would be a home run. is that metric to look at? >> that's right. part of the analysis we did is we took a look at the global media spend per user. in 2012 in europes, th, it's $2 user. on facebook, it's less than $4 per user today. if you look at the other comparison i would make is google is generating on a revenue per user of $33 or $34 per user and facebook is generating $4. i am not saying it will get there overnight, but is a double craze he? i don't think so because by

2015, i am not modelling -- they that gets me to 7.2 million. >> how facebook is actually trading right now. i'm sure there few people who would have anticipated an 11% decline on the first full day of trade. there no forces and two big lock up expirys ahead that will increase the flow tremendously. the first is 50% and the second by doubling the shares outstanding. is there any iota of concern. the downside is below 33%. we touched 33% today actually. >> i think the stock will be volatile. it will be choppier in the medium term. the company like you said earlier is focused on product and delivering good product and monitization will come and a

high level of engagement. the stock can be choppy and i'm not expecting it to stay at these levels, but i think overtime it works 12 months. >> thanks for your time. again, $48 price target on shares of facebook. the weaker euro is slidely downward. in the past 16, it is a big part of our next guest's latest strategy. the editor of the world-renowned gartman letter. a pleasure to see you. you haven't done this and buy gold in dollar terms. why now? >> i did two things. i bought gold in dollar terms and bought stocks for the first time in a long period of time. let's talk about stocks. i thought it was interesting that you had the most amazing dichotomy and the number of puts versus the number of calls had gone to parody 1-1.

it's usually maybe 2 to 2 1/2 to 1 number to puts. that told me one thing and rather being interestingly, we have two etfs on and off, risk on, risk off. normally those two have the same volume. 50 to 100,000 shares a day. last week off traded 100,000 and on was trading like 1,000 shares. the ratio of the volume of risk on versus risk off had gone to unbelievably low levels. the public was bearish and they said it's time to start being bearish with the stock market. we beat it up very hard and the euro had an outside reversal day on friday. terrible news and made a new low and closed higher on the day. gold did the same thing. it's time to buy gold and stocks. sort of an internal hedge. most people don't think gold and stocks can moving to and they

will both go rather dramatically higher. >> would you be buying gdx in grasso dollar terms? >> i would be buying gdx for the first time in a while. i wrote that i think the relationship between gld and gdx has gotten so wide, when i come back in, i will be a buyer of stocks and of goldminers rather than gold itself. gdx is probably the best way to go. i will buy it in grasso dollar terms. . >> in terms of gold, they move lower. what's your sense on how high they can go? >> it will go up until it stops. i have been at this for 40 years and people are always asking why where you think something can go. the best is to get the trend. i think the next move is higher

and it will stop when it stops. any time you say i think it can go here, it will get $1 less than you thought and you look like a fool. >> we will see you the next time we see you. >> for will be good to be seen. >> he spoke about the diversion of late. would you go with gold or goldminers? >> i bought gld and like buying gld. i suppose if you want a dividend, you can try the gdx, but then you have to worry about the mine closures. dennis likes gold on facebook. we will try again next time. look behind the hedges. the global head of the finance reveals what hedge funds are amid all the volatility is right now. black and white ♪ [ piano chords ]

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wal-mart, 52-week high and trading at $63 a share. it does seem like the heat is being turned up. isf is recommending no votes for four of the directors and they are saying on cnbc they will vote all of the shares against the entire wal-mart board. could this mark a bottom in the heat is on wal-mart? >> maybe. i was somewhat surprised. we were wal-mart share hold fors

for a long time and we did sell the stock. i don't know that what difference that no vote makes. there is no alternative that i know of. we were talking about it before the show. maybe it's oil if we see gas prices coming down that hurts the wal-mart customer and maybe it will help them on the way down. >> they talk about the mexico incident. if you look at it, they have been buying stock. it has been performing rather well. target, kroeger and the tape where you are looking out, this is a hidden treasure. >> certainly a lot of uncertainty in today's markets, the next guest said hedge funds are thriving and will survive the macro uncertainty. global financial services conference. a president of deutsch bank

securities. always a pleasure to see you. >> nice to see you as well. >> in terms of the strategies, one of the predominant strategies working in the hedge fund world. >> i think the hedge funds have had a terrific first quarter. the leaders were equities and stressed in credit assets and management that continues to grow at the end of the year. $2.3 trillion. they were a little bit anemic. >> you think that the macro uncertainty makes it dichl, but have you seen many more higher returns because of the macro uncertainty that creates better volatility and better opportunities? >> it's interesting. i think that hedge funds have structural advantages. one is that they tend to be much more flexible. they can maneuver the portfolio effectively. they are benefiting from a reduced level and the proprietary efforts.

that has been a development for them. . >> barry, brian kelly. besides the strategies that people are going into, where are you seeing thefullies. are they in the smaller funs or emerging managers or is it the big funds getting all the money? >> it's a good question. by strategy the biggest estimations have been macro and emerging markets. i think that geographically the biggest destinations have been the americas and asia like japan and emerging markets and the biggest losers are western and eastern europe. that's where the flows have been going. in terms of the size, as the influence of then largely institutional, it tend said to congregate around either of the biggest and most developed funds. the institutional quality and the big premier start ups emerged from the crisis. >> let me ask you something.

i assume part of the prime brokerage business is lending. how levered are they versus a year ago? >> they are a little more than they were before. using the long shored equity is the best proxy. they are about 200% gross and 50% net long. that compares with the peak of summer of 07. 100% net long and a trough in the fourth quarter. they have unlevered with a guy with $100. 40 long and 30 short and 30 cash. on a scale of one to the peak, they are about six although i don't suspect they are likely to get back to the leverage in the future. >> great to see you. coming up next, facebook slide have anything to do with facebook? the noted investor breaks down what the stock's sell off really

mean when is fast comes back. uh, i'm in a timeout because apparently

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>> welcome back to fast money in times square. facebook shares flopping in the first full day of trading. joining me now is the president of sea breeze partners and cnbc contributor. always a pleasure to speak with you. it seems odd to say that it's killing confidence on a day where they have the second best day and the nasdaq has a strong day as well. >> a day like today as we know can be short-lived. if we go back to december of 2011, i did the surprise list on thestreet.com which i discussed on fast. the facebook ipo will fizzle and break issue price shortly after the deal came and that's what transpired. i think the whole deal, first of all the analyst that was on is

one of the reasons why a lot of institutional investors and huj fund managers don't pay attention. you can't have a $1 down roisk facebook to 33 when the stock is trading at 3390. this whole deal reminded me of the hype of the aol time-warner deal. if we go back to late 1999 and early 2000, aol was going to be the last gateway to the internet as some described facebook. a combination and a deal that was heavily allocated towards the retail community coupled with a continuing and discouraging situation in greece in which the debt contagion is expanding and greece is falling like it's a piece of feta cheese. i call it the feta result.

if you look at the flows in the last period and wednesday, already $11 billion was taken out of the equity funs and $12 billion was put into fixed income funds. the real allocation rally that i expected a month ago is clearly delayed indefinitely. >> i want to bring in josh brown with a question. >> hello, joshua. >> the one one thing about this facebook deal is everyone is dealing in superlatives like aol. really not talking about specifics like decelerating revenue like 55% growth from the fourth quarter. google's display ad business is competing with facebook and beat beating the heck out of facebook. >> i talked to hundreds of individual investors every month. i literally have a fire hose and

in the asset management business. i agree with what you said. this turns people off. the effect that something like facebook has that you can't see it on day one, but you can see it overtime. it leads to multiple compression and the general ap athy where stocks may be earning the same amount of money, but people are willing to pay less because they don't want anything to do with the game. you mentioned flows into bonds instead of stocks. facebook would have a better reception as opposed to an equity offering. i see this every day and i talk to investor who is agree. they look at this and say look, it's another case of hedge funds dumping on to retail. >> the question was why i missed the question. >> it's important that i speak rhetorically in this case. doug had a chance to lay in before i ask him. my statement was more of

solidarity. >> now that we are standing behind each other, i have to let you go. always great to speak with you. at the margins at least, it may not be seen in today's session, right? in terms of longer term, it may not be a reason to redeploy the billions on the sideline. >> yeah and you did see a bit of that on friday. as facebook headed down, so did the market. if people were watching, it's a popular stock. if they are seeing that, if they can't do it why would anybody else be able to do it and i will take the money and fix up the house. >> it's a i had drid and out of bones and dabbling in dividend plays. if you look at the group and the resources, if you look at all the utilities, anything that yields you something is where the investor is and should be near term.

>> what are does facebook yield? >> that's what they brought it on. the promised land. >> coming up next, some players found new life and how far can they run? up next, a top analyst names names on who is best in class and gives you the best for this week. stay tuned. [ male announcer ] when a major hospital

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>> coming up next, getting a read on the move for that oil and gas. cramer is playing defense against europe and the retail turn around stock that could be on clearance. it is coming up at the top of the hour on "mad money." the big jump for technology, snapping a 12-day losing streak with industry giants like dell and hewlett packard. what is your best trade. senior analyst joins us on the fast line. tony, great to speak with you. >> happy to join you. >> i top the talk about dell. should we be concerned about government spending slow downs and fiscal clips? >> absolutely. dell has a pretty significant overall exposure to the public sector and nearly 30% of revenues and that includes the health care sector, but they have exposure to that and have

commented on recent quarter that is the segment has been soft and we don't expect improvement. >> they're recently announced a major lay off. it this be a kitchen sink quarter on that they are expecting? >> there is a lot of speculation and reports about a lay off. they haven't announced it. they report on wednesday and widely expected that they could be laying off up to 30,000 people. the key is, how this reduction is communicated to the market place. the bears are believing that hp has to do this and this is done out of of desperation and can't make the financial targets. the bulls will say this is meg whitman getting rid of unnecessary fat and making the business more efficient. this will drive a better hp going forward. the numbers are important around

how many people and more importantly, how hp communicates what this is for and what impact it will have for next year and next will be more important. >> tony, it's karen. on that issue, i thought under the administration for lack of a better word, they cuts already and that it wasn't -- that wasn't the problem here. do you think that wasn't true? why do you think this is the right thing for them to do? >> you are absolutely right. mark laid off a lot of people and hp has been criticized by some of its own current management of having cut too much and not invested. sharing mark hurd's tenure. that said, hp is a huge company and have 350,000 employees. we are talking about potential lay ufs of 25 or 30,000, we are talking about less than 10% and something close to annual

attrition. the press reports to date suggested that meg wants to take money from inefficient administrative areas and redeploy it into selling. again this goes back to the question of what exactly are you cutting and why are you doing it now? what impact does it have in terms of saving money or trying to boost investment in selling and etc. >> brian kelly. it seems to me that the trend intact is for companies to use tech to boost the bottom line. hewlett packard and dell may not fit into the place. it's all about clouds. why would i buy hewlett packard or dell versus oracle? >> right. look, there differences in valuation clearly. dell is -- the last time we did the analysis, this was in the bottom five in terms of

enterprise value and cash flow. it's trading at less than five times the free cash flow generation. it's extremely inexpensive and saying that dell's cash flow will decline at about a 12% per year. that's a fantastically low valuation and the bet is the story. it's not as bad as the valuation is saying and the company will put things together. similarly, the valuation will decline and go down about 7 or 8% per year. if you want to buy the growth companies, no doubt about it. many others that are growing and big questions about dell and hewlett and the question is that more than captured in the prevailing valuations. thanks for your time. scott nation makes a good point. there may be better places in technology for growth and the valuations are compelling for

hewlett packard and dell. >> it is, but you have to look at the chart for dell. the chart has been ugly and has the rounded move lower and i don't know how dell breaks the spell of the problem that they have right now. >> no yield and no dividend? >> again with the no yield. >> it's important for the viewers. coming up next, we big into what drove apple higher. the details of what could be behind the pop. this is the first car that i've been totally in love with in every way, shape, and form. it's my dream vehicle. on a day to day basis, i am not using gas. my round trip is approximately 40 miles to work. head on home, stop at the grocery store, whatever else that i need to do -- still don't have to use gas. i'm never at the gas station unless i want some coffee. it's the best thing ever. as a matter of fact, i'm taking my savings so that i can go to hawaii. ♪

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>>. >> well. 6% and jane wells joins us with more on what could be causing the surge. jane? >> a lot of traders and analysts talk about this and none had the courage of putting it in an actual report. they suggested people were using apples and atm by shares of facebook. we were talking about it and john agreed one share of apple could get you 14 shares of facebook at the open. the stock lost 7% in four days of $34 billion, about twice what facebook wanted to raise.

now things changed. they maybe started changing friday when it got so bad into facebook. the first up day in six days. they turned right around and got back into apple. it looked like it was happening today. some think that's part of what was going on. google was down and even groupon is up 7%, taking back the wandering lovers and making them richer by the closing bell. you can get over 16 shares of facebook for one share of apple. >> the new ratio. the facebook to apple ratio. >> f to a. >> in terms of the fallout, you have been watching shares and morgan stanley and what happened with facebook seems to be yet another shovel to the shovel load of problems morgan faces.

the morgan stanley is topping 6.5% and that's higher than california bonds. the senior notes are trading about 500 basis points above 10-year treasuries and compare that that at plus 390. city's plus 270 and jpmorgan plus 220. morgan stanley debt as more than twice the yield of jpmorgan. why? analysts are preparing fair downgrade as much as three notches. one specialist said that requires them to have nearly $10 billion. that's not a problem. they have the money. they are not a concern over solvency, but a reflection that they have the toughest outlook in banking. melissa? >> thanks for that report. the first when we come back. [ male announcer ] this is corporate caterers, miami, florida.

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