that will do it for closing bell. i hope you follow me on twitter. stay with cnbc because "fast money" begins right now. >> it was the longest and maybe hottest day of the year and it felt like that on the trading floor. >> unchanged in terms of operation twist. the committee saying it decided to continue through the end of the year the program to extend the holings and securities. even the big guy took some heat. >> how would you respond if a young graduate institute came and said it is too incremental. and that the reason why the economy underperformed is because of the incrementalism.

>> times like these where maybe we all have to come together. >> if you know somebody that does not have air-conditioning, organize a sleep over and get them into the ac. >> he is ready to throw cold water on this market and guy is always ready to work on his tan this is "fast money." >> now what do you do? the trauders, they do not agree. i will start off because as is well known, you don't think things are that great. and yet today stocks finished basically unchanged. >> it gets scarier by the day but it dupt mean that stocks can't go up. more importantly what the energy market is saying about maybe slowing growth globally. i think the world might be on the brink of disaster doesn't

mean the stock market can't go up. of the april of of 22 and change. june low of 2066. how we put in yesterday or today, you have a little bit of a trading range to work with. >> you take the opposing viewpoint. >> as long as there is a federal reserve and they are willing to print money, we have the bank of england this morning, we have over in asia almost every central bank there being dovish. the risk trade is still on. i agree that at some point that bubble can pop. it's just not right now. for me you want to buy stocks

again? they tend to outperform in these scenarios. >> let me ask you something. are you surprised that the market didn't react at all? we had very big news. market absolutely unchanged at the end of the day. what do you make of that? >> i said those exact words. i would say that it did. we are done on the dow and we wept down another 80. so i think that a lot of people probably repositioning today. i think over the next day or two we have the then i will take that as information. maybe my thesis on things is

wrong. this is on five week highs so that in and of itself is a positive. didn't sell off. >> that is what i was reading. after the moves we had and after the expectations to have had a sell off in the s&p 500 when people are doing their decision trees, i think this came in right down the fair way and it's because the u.s. economy has not fallen into the place that europe is. look at the dollar. on some level unless they did something massive. what we should pay attention to is down 3% today. 22 month highs in inventories. so, we have to get some real growth infused into this. they revised down growth. this is going be a much longer

slog. that's what was different. the minute the u.s. numbers start to really turn over then you can run for the hills. >> perhaps the move in oil prices is pointing us to a trade here. josh brown, you have been prounding the cable. you are 100% cash at this point? >> we're 100% short term treasury. i think the real take -- first things first, there are very large trends and then little counter trend things. we try to get the big trends right. the small headlines, that's very difficult and i don't think i'm good at it and i don't think most people should strive. there is good news and bad news.

this is what market expected. you got it. the bad news, another piece of the good news, inflation is below the fed stated target. we're going to have fiscal cliff stuff. there is absolutely nothing bernanke can do about it. the fed is pourless in the fais of it. this is a political not a fed issue. that's really what is keeping us from wanting to get more bullish here. is there a car nar ree in the oil rig? there you have it. brent, also, trading to new lows. i am curious in terms of walmart. you think this proves this is the trade to put on now? >> it certainly helps the

business. names like target and the family dollar, i prefer walmart and target to them. you know, i have some head winds from the dollar but i think that gasoline is so important. sticking with walmart and target. i like them both. >> how do you reconcile buying stocks and being risk on or willing to embrace the riskier assets out there. >> i guess the same way you did when oil is at 35 dollars in 2009. to me, that is when ben bernanke said today, he's going use it. it's ready. to me that's the reason to buy risky assets or stocks. oil could go much lower.

so they either get high prices or they start pumping more and selling more. >> you are definitely the dad i did not want to see on the front porch. i got the quivers just thinking about it. >> the other thing that is notable is this comes on a day after effectively the iran oil talks collapse. the pressure supposedly remains on iran. i think you hit the nail on the head. and saudi arabia is happy to keep the oil prices coming down. >> let's move on here. as we know now operation twist is a way to help boost the economy but will it help? it's great to speak with you. basically this is status quo.

if you withdrew twist, that could have tightening impact on the economy. will it have an impact? we have seen from the voipt of stock market that it has had diminishing returns with each round? >> it won't have an impact on the economy. this was a shot right down the middle of the fairway in expectations from the perspective of the markets. what will it do for the economy? not much.

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fast come back to >> welcome back to fast money. we are live at the nasdaq markets in time square. shares getting crushed down about 9% of the afterhours session. this may indicate lower future sales here. it's important to note that the stock is up this year. so josh brown at this point. and the grand scheme of things it doesn't mean much but this is a 75 pe.

at a certain point you are priced for perfection and you have to deliver every single time like clock work. if you love the company it will be in the penalty box at least for the rest of the quarter. keep an eye on it. you will probably get a better chance. >> we will trade it down to 50. bounced up to 61. here we are basically around this 50 level. it heal by was not a disaster. so although i agree 100% with josh, valuation has finally caught up to this stock. not unlike jcpenney. red hat may set up similarly tomorrow. >> that's a tough word. a lot of syllables in there. >> i put an extra one in. >> we should note that we will have jim over tomorrow at 5:00. it's an exclusive. we will ask him all about the miss on the billings number.

next trade, got to check in on bed bath & beyond. q1 sales missed the company's outlook. same store sales came in at the midpoint of the guidance. this is another one where the valuation is pretty high on this one so you have to perform and deliver. the stock was 52 week high. >> all time high yesterday. >> again, the cliche would be priced forperfection. you have to have that growth and drive it. with their guidance being lower, this is not a place you want to be. if you bought it well lower, take your profits now. >> i'm surprised. this seems like a very big reaction. it was not a super high flier multiple. >> 11% decline. >> that is actually starting to get interesting. >> did the markets anticipate

this sort of move? >> it was interesting because i started to look at this one and if you take a look at how the stock has performed and what they have done over earnings, they haven't missed earnings for years. take a look at the last eight quarters. the stock was up pretty strong after earnings. as far as multiples are concerned, it is not like this thing is trading at 75 times earnings. we're talking 17 times. i think basically what's going on here is that it was a very continuous sustainable growth story and the real reason people are selling it is there is that sort of crack. when you see that you see this slow and steady kind of basically every single earnings we will get a win suddenly goes down the toilet. i think basically when everybody is looking up, that is what is going on here. >> let's go back to the fed now.

how should you play twist? joining us now is a five star fund manager. jason oversees $14 billion in assets. great to see you. at this point, it's status quo. so what? you go to high yield? you have got a fed that is twisting in such that long end rates. so, if you believe, great. high yield great there is a lot of risk out there. we're at the deep evidence end of the pool. individual stories, great. the fed is making it very difficult. >> there was no mention today of

mort kaj backed securities as well. orar they do. thoiz that hold mortgages. those stocks tend to have a tough time when rates rise. thaur yield stays the same. i don't think we're invested in a number of those names. >> how do you handle the fact. >> people are questioning where growth is. how do you own into that especially when you said there

is a lot of pitfalls out there. >> so i think the thing about dividend paying stocks is you are looking at come poupding returns. quarter to quarter, moment to moment that doesn't look that exciting. people's minds have a tough time thinking gee metically. every year is pretty exciting. the income return is attractive. over time this compounding return is still very attractive. >> we show it for two different

funds. who are each of these funds more property for? >> it's primarily dividend payk stocks. growing dividend per share. so obviously it has more high yield and more bopds than stocks. >> today just days after unveiling the surface tablet. at the event with more. john?

>> we have got a few details today about the windows eight phone operating system. we didn't get to the full reveal but that will come later. a new start screen. you can do more with it. this is the windows nt core. this is the same that windows pc version has. one of the questions that i have was about an emerging markets. might they be able to gain some share there at rim's expense. >> one of your biggest market opportunities is probably picking up some of rim's users or former users as they upgrade. a lot of people are overseas. what kind of marketing strategy or sales strategy do you need to have in order to get some of those users? >> we feel very good about the protucktivety tool that we have

offered. like some of the about to deploy applications to our devices. >> that is something they were lacking before. nokia also took the stage today. they have things about driving directions. they will incorporate some of the phone type features. they are trying to get a boost there. but really the question is what is it that's going to aloe these guys to leapfrog past these guys who have the leading phones and leading phone share? not clear what they might be yet. back to you. >> thanks for that. microsoft shares up ability three quarters of a percent.

>> who do they -- no he's not. >> john? >> what might they be expecting in terms of details here and will that move the needle at all? >> on the surface or windows permanently? >> on the phone? >> on the phones, they didn't say anything about unit sales. you have got to assume they are in prepaid. you have got see what kind of hardware they come out with. we won't see that until later in the phone when eare also seeing the iphone 5. >> i don't think anything really meaningful is built into this talk. >> it has never gone back to its 52 week high. >> the level has had trouble a couple of times.

i think that is your boegy. it makes sense. now it's in a prove me stage in terms of the stock. >> it also pays nice dividend. so you have multiple people buying. >> mike, you eyre taking a look at consumer discretionary. >> we were looking at xly today and we saw a substantial put spread. this is trading about 135 million. this could be somebody who is taking a look at what ubs had to say yesterday. this includes a lot of the big names like mechanic danld's and starbucks that have had a good year. we have also seen bullish activity in xle. so we could be seeing the

beginning of a fairly large sector rotation. >> with it's now down one. >> you have got wonder if there is some rotation. >> have you really never had one? >> no. >> road trip. >> let's go. right now. jack in the box, you make an excellent point. jack is still an interesting stock here. >> follow the show on twitter to get tons trait updates. coming up an investment that may last forever.

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[ engine turns over ] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus. see your lexus dealer. >> time for "fast money portfolio". diamonds are more than an elegant wedding band.

here to explain how you can crystallize your portfolio is peter live. it's great to have you on the show. >> great to have you graechlt to be here. >> how should investors think about getting into diamonds. >> first, let's have a look at the diamond prices over the last couple of years. a quality portfolio would have generated double digit. such a portfolio would have outperformed it. >> when you say a portfolio of high quality polished timds, are you holding it yourself? how does that work? >> for investors there are

different ways to play diamond marks today. let me run you through the several options. obviously you can go to a high quality retailer. you're basically running no quality risk. but you have to pay a retail margin. obviously you're running a quality risk here. on the other side you can play into the shares of pubically listed diamonds. and with the pragal risk of the diamonds. you can cook up with. >> let me ask you something, i think for a lot of potential

investors there might be the notion that somehow this market is rigged. that is few people really control it and the supply demand dynamic is not actually what's out there. how would you address that fear? >> that's a question that we get quite often. in fact in the 20th century. sitting on a significant inventory and by releasing that inventory in good times. the whole market changed in 2001 when debiers got privatized. they used their stockpile. and only once the stockpile was depleted in 2004. real market forces. actually today we're not talking about a controlled market any

more. a market less than 40%. rose up on the players. actually there are no financial products in the marketplace today. about 40%. obviously many tradeable products. it's really about the volatility of these products. it's really about the supply and demand for diamond jewelry. >> diamonds as you have shone have been one of the most defensive assets. they are a lot like gold and they have a buyer coming from emerging markets and they can't get enough. i don't see diamond prices coming down. >> absolutely. this is what i hear quite a lot.

when you look at diamond prices, it is really very different. there are no triftives out there. it is really about the supply and demand. let's have a look at the supply and demand. all experts agree that supply over the next couple of years at best will be flat. there are no new mines expected to come on stream. it would take about seven to ten years. if u.s. is still the largest market for diamonds followed by china and india. that will continue. that tl are a couple of market studies. take the more conservative

wants, there is a more conservative supply demand gap opening up. >> we're going to leave it there. peter joining us tonight from london. karen quickly in terms of some of the retailers, that is probably the most accessible way to invest in this corner of the world. >> coming up next, are kpaeps teetering on edge of the fiscal cliff. we will reveal the smartest trade for today. stay tuned for the trade of the day. 5

5. >> entire plethora of things in the way right now. gridlock in washington.

i'm here in washington d.c. talking to the weighs and means committee drumming up a way to increase jobs and exports. the deficit next year's sax increases. >> how he is making decisions in terms of hiring and spending. all right companies are being impacted. when is that? is there a quarter? >> we really think it's going to start hitting the economy in the third quarter of this year.

months and months before. >> are these impacts already factors into your estimates on the economy? >> we have very week growth for the second half of this year. >> when you take a look at some of the estimates given by some of your cohorts, do you think that people are accurately putting that into their estimates? >> i don't think it's in the consens consensus. there is a very minor slow down in the first quarter of this year. >> we know these things are not linear. >> it depends on how the news flow pans out.

>> that's where really we are going get a lot of information. we will really get clues about where we will get compromise not just the presidency but everything in either scenario. let's say we go all to the left or all to the right. what do you foresee? >> the ironic thing is that you get a very similar size cliff in our view. the mix is different. our view is that either way you're probably going get about a 2% drag on the economy. >> thanks for coming by. josh brown, how are you playing it? does it impact your view of the stock market at the end of the year? >> i think there is a couple of things. this is an investing show and

the economics of it are really complicated. but you look at a moody's says if nothing is enacted at all. once you trig aerorecession, it's tough to combat it. they're audiocassettalking abou rid of the bush era tax cuts. what would that do to your strategy? i think those are rally the issues that concern me the most. i don't really have the answer but the one thing i would agree with is yeah this is not about 2013. we're all going to be talking about it in advance and psychology is every especially when we are teetering between recession or not. >> cnbc has a very special event tonight. brian sullivan is back at headquarters with more. >> you know, a lot of stuff came

up in the town hall. thank you. that is our town hall event at 9:00 eastern time tonight. it's not just about some bland discussion. the panelists kind of went after each other a little bit as well. look at this teaser clip. >> i don't know where we got lost. we're all singing couple buy ya these days. business is war. you get up in the morning and you figure out how do i kill my competitor? how do i pour boiling oil on them? that's what made america great. competing, winning, fighting, winning, competing. >> i completely disagree. >> you know, business is war. i sat on the floor of my apartment and i was like i don't

want to go to war. i have not taken that approach. i have done it very differently. i have not been obsessed or focused on the competition. i have only been focused on my own quality. >> there is a trade on boiling oil futures. tune in if you can. >> more "fast" straight ahead. [ male announcer ] this is the at&t network. in here, every powerful collaboration is backed by an equally powerful and secure cloud. that cloud is in the network, so it can deliver all the power of the network itself. bringing people together to develop the best ideas -- and providing the apps and computing power

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♪ >> today is the longest day of the year and with the official start of the summer comes record breaking temperatures across the eastern half of the country. let's get the very latest from the weather channel. >> good evening. certainly hot for many of us whether you're on the streets of d.c. or in new york. temperatures skyrocketing into the 90s. it is the warmest day of the year and that's saying

something. the upper 90s. i'm sure you felt it if you're looking around. it's not just here. you get out towards new york. almost all of us are feeling the warmth. doing some good news. the outlook dupt call for this to persist for too long. we have got three days of it. three days above 90. when the weekend comes we will start to cool down. next week looks much cooler. if you are looking at where the heat is going to persist is across the rockies and the plains. it's a busy time. that one won't affect anybody. but in the gulf, we are watching that this weekend. >> you had a lot of helpful

tips. here is what you said this morning. >> do you know somebody who doesn't have air-conditioning, organize a sleep over. get them into the ac. >> have you been getting a lot of push back on that comment? >> push back? why not? i'm about the love here on the streets. you got to make sure you're comfortable and safe. i know it's old advice but good advice. >> you want to come over? >> sure, why not. >> you got a fan? >> who knows where that could lead. >> that's my man. >> eric, thanks so much. >> take care. >> the floor will be the coolest place because heat rises. >> look at you. >> the free market trade of the

day is we hind this market curtain.

>> let's trade the heat wave

here. we just had that report from the weather channel. what's your trade on the heat? >> we were talking about it yesterday, talking about corn. if we see not favorable weather, we will see the corn crop impacted and we get to fertilizer and ag names. we have potash, cnf and rnf. >> pcg is down today but you can trade it against 4309. nice dividend. slow and steady. >> let's get to the moment. everybody has been waiting for it all night long. time to reveal the trade of the day. what is behind this curtain? >> my trade of the day, my trade into the evening, i said i was b buying melli. ebay owns about 18% of these

guys. most importantly, this is a company that is a dynamo from a trading perspective. the stock has gone from 105 down to 65 in the last six weeks. more importantly, this stock is a fantastic company that you buy when the valuation is right. and for this company's relative value at 32 times earnings, a trough valuation that you have not seen when i think a lot of these guys were overdone. this is a very real company. your risks are coming from argentina. to me, any time could let the currency go. i do believe that there are currency risks there. their papal is something that is going very well. stop yourself at 63. just above the 50 there is a great trade here. [ male announcer ] trophies and awards lift you up.

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