compared to the companies that ship things like transportation companies in the dow transport average. for many years, technicians would look for the confirmation of those two indexes. if the dow industrials and transports are at all-time highs, that means the economy's doing well. and the technical signals suggest the market goes higher. we have had that confirmation of the dow industrials and the dow transports at all time highs for much of 2013. but what happened today? when we saw the earnings of a major transport company, fedex, the company mixed earnings expectations badly sending the stock lower on the session. fred smith blamed ongoing weakness in international air freight markets. pressure on yields due to overcapacity on those markets and customers, frankly, selecting less expensive slower transit services. smith went on to announce a cut in capacity in asia and a ramp-up in cost cutting efforts at fedex and therein lies the most important issue to watch in the months ahead. did fedex miss earnings

expectations because customers are choosing to use competitors? or did they miss because the international economy is worse than believed? between the ongoing debt crisis to the headlines in asia to the poor performance of key commodities like copper and the shipping index, take a look at copper here, it is rolling over. fedex issues cannot be that much of a surprise. however, the dow transports have been in line with the dow industrials all year. as i've mentioned before, judgment day is about two weeks away. as we start seeing the flow of first quarter earnings and get a real sense of exactly what was ailing fedex this quarter and whether or not that is indicative of the rest of the s&p 500. of course, the real worries that fedex' weakness is indicative of the economy slowing. but ramp up to 7% growth in the quarter after, the second quarter. so growth in the first quarter, yes, but very much anemic story. the stock valuations where they are, earnings-related selloff

will likely take place soon after. dow theory has been right so far, but whether fedex is painting a different picture, it'll reverse the theory is something to watch for the direction of this market. the market today, of course, up 55 points on the dow jones industrial average. that'll do it for the "closing bell" tonight, see you tomorrow, stay with cnbc, "fast money" begins right now. live from the nasdaq market site in new york city's time square, i'm melissa lee, here's what "fast's" following tonight. how much longer can the bulls count on bernanke? why he may be slamming on the brakes sooner than you think. he's up more than 200% since the beginning of the bull market, what john rogers is buying right now. and calls of the day nearly left for dead, two stocks coming on to the scene as possible winners for the year. but first, let's get straight to what is moving right now, and that is oracle releasing quarterly numbers after the

bell. disappointments across the board here in these results. let's go to jon fortt for the latest. >> not good, melissa. looking for new software license revenue to be up about 7%. it was down about 4%, also hardware was supposed to at least sort of tread water, maybe do a little better even though oracle so sort of guided into a range the street was looking for around 800 million in hardware revenue, they got $671 million. so both of those numbers, the new software license revenue, which includes cloud and also the hardware number below the low end of the range where oracle got it. big question on this call. i should mention that operating margins were about in line. the big question on this call, what went wrong? is this a macro issue. is this the sales force not responding? is it an issue like a little bit more than a year ago where big deals at the end of the quarter didn't come through and expect those to pull through in the next quarter?

it's an important series of questions because the street was bullish on q-4, which is traditionally oracle's strongest quarter. they expected new software license to be up even more than they expected it this quarter. they were disappointed in q-3, we'll hear early in this call what we should expect for q-4, guys. >> all right, jon, keep us posted. joining us from out west. meantime, it is interesting because a couple of days ago, we had a very heated bull/bear debate on this very stock. guy was the bull and tonight guy is very, very disappointed along with we should say -- a lot of other people who believed in oracle as one of the winners of the tech sector this year. >> that'd be the bear side of it. >> the winning side. >> right. >> it was awful. >> terrible. >> nothing good about -- jon mentioned margins were light too. they missed all over the place, which is very unlike oracle.

this stock was two days, three days ago trading at a dozen year high. and now we're seeing the pullback which is justified. so i don't really know what to make of this. i haven't seen them report a quarter like this in quite some time. i'm not sure what to make of it to be honest with you. >> yeah, the thing is, this wasn't just a miss, this was a colossal miss. 23% down on hardware. that's a big, big drop. and, you know, maybe ben bernanke's going to have to start buying oracle servers or something at this point in time because nobody expected this to happen. the narrative has been the fed's wide open, everything's going to be fine, well, doesn't look so good after this oracle. >> higher expectations, as well, because there were comments made by the company that it's getting better, that it will turn, it will be profitable. >> i think this is a software story. i think this is not a macro story. they're losing out to salesforce and workday. and installed base, these guys own it. these guys in s.a.p., but they're losing to cloud-based providers, they're trying hard, but it's not happening fast

enough. oracle has been as bulletproof as any company in this rally. people own the stock, they love it and i'm not saying they're going to run out the door here, but if they start to show some weakness and they're converting their customers as they had been, this is a problem. >> this is the latest company to issue weak guidance. half of the companies came out with earnings so far this week have, in fact, missed -- and, of course, we had fedex, we had caterpillar, major disappointments here, j.j. >> and fedex and caterpillar i think is really bigger concern overall. u.p.s. set us up for fedex. people should have been prepared for the fedex numbers today. but with combined together makes me a little bit nervous going forward. we see so many good numbers in terms of housing and employment. but these two kind of the backbones of our economy. we have to keep our eyes and so many more of the transport stocks going forward. >> oracle now down about 7%. we'll get the updates from jon fortt later on in the show.

ben bernanke, keeping the easy money and the rally for that matter going for now pushing the s&p 500 closer to an all-time high. let's get straight to the traders here. and dr. j. john najarian is also joining us here onset. we are points away from the s&p 500 hitting the all-time closing high. what's your guess on when that happens? >> if it weren't for oracle, it would have been early in the morning tomorrow. and even with oracle, i think the market still has enough gas, melissa to get past that. but to j.j.'s point and everyone on the desk, i agree there are some in the armor. not to push the market down, but to keep the fed in that tight box, that is exactly where the fed is. they're stuck, they can't get out of this now. if you were looking for an early exit, ain't happening, folks. not happening, not getting out

early. >> like i say, there are people rooting for that bit of bad news, tim so they can get that assurance that the fed is not going to leave early. >> do you think it might be more early for the market to look past an oracle as opposed to a caterpillar or fedex because oracle has always fired on all cylinders. to have these different business lines miss from the guidance not too long ago, that's -- that's more of a disappointment probably than fedex which was sort of alluded to by u.p.s. in terms of what we were expecting from them. the things he mentioned about s.a.p. and crm, sales force. b even linked in. we're not talking software against linkedin, but when you're talking cloud and all the rest, oracle was late to this party. microsoft was fast enough when they were late to the internet and others like tablets and things like that, they were able to play catch-up.

they were late to the cloud and that's costing them right now. >> doc, thanks for stopping by. always good to see you. >> like wise. >> let's get to the top trades of the day. b.k., your top trade? >> tlt, a great time to buy some more here. and doc mentioned that we have this -- people are waiting for the fed to do more. if the market rallies tomorrow morning, ignores oracle, ignores fedex, caterpillar and then reverses, that will be your classic blowoff top. but in the meantime, i'm buying tlt as a hedge. >> you are long s&p 500. >> i am long s&p 500 futures and expecting that last blowoff top, let's call it 1,576 and why i'm not short yet. i get kind of a free look. >> we're macro guys too. we're looking at a lot of signals. b.o.j. giving you a lot of signs. we were picking up places where we thought things were oversold, no better place than russia, we're going to talk about it

later in the show, but in bombed out names, you can take advantage of the cyprus scare, which i think should be a scare but not in places, actually, like russia overdone. we were buying mbp, consumer based, these guys traded on the new york stock exchange. ways to play this here. >> and we had, of course, a bounce in wti as well as brent. you went to oil. >> i went to haliburton. you saw anadarko, one of the strongest stocks of the day. if you missed that, you look and say how else can i play this? well, haliburton is one of the biggest names in the sector. it's going to be good for everybody eventually. the stock was down much more in a day, rallied a bit into the close. this was the stock i had. >> everybody talks about bank of america, new 52-week high. last time we had sally on, but the asset managers have been unbelievable. not only made a 52-week high, but an all-time high. i think this space still works,

rjf. >> bernanke certainly gave us the juice to hit all-time highs. the question is, will bernanke soon slow down asset purchases? here's what the fed chairman had to say about his exit strategy. >> we'll use models and other indicators of the state of the labor markets to try to make a good estimate of how much we need to change the rate of flow. but, again, the point of this is to let the market see our behavior, to let them see how we respond to changes in the outlook and that way there'll be a better ability, i hope, for the markets to anticipate either a return to higher levels of purchases or the ultimate phasing out of the program. >> phasing out of the program. all right, let's bring in chief u.s. economist. great to see you. >> good to be here. >> you're expecting this to happen sooner rather than later? >> i think there's a good chance they'll start tapering some time

in the third quarter, probably closer to september than to june, but late summer, i think by then the data will be consistently getting better. we'll be past the worst of the fiscal restraint. and, you know, what the fed told us today, the one clarification on the guidance on asset purchases is that the significant improvement in the outlook for the labor market is when they will stop purchases. whenever that happens. i think we'll be there at the end of the year. they'll start tapering possibly long before then. >> and so, you know, i think that employment and certainly then the other side of it's the inflation they've been clear about this, as clear as they can be. but what was interesting today on the q & a, they're not targeting asset prices. and if you asked me two years ago, actually, in the worst of the crisis but as we got toward 2009, the fed had a target that was 10 and 10. get the dow below 10,000. if you look at the s&p. people are more confident. they have to be feeling better, they have to feel as if they've succeeded and they have to be targeting asset prices, which

means they have to be getting out sooner than later. >> well, and another asset price you didn't mention is home prices. that's probably the more significant one because that's, you know, what got us here in the first place. now that home prices are rising decidedly, i think they'll continue to rise at roughly 7% per year. that starts to unwind a lot of the structural head winds to growth. and i think once we get through the worst of the fiscal restraint by about mid year, the data will start to consistently start surprising on the upside. i think there's a good chance we'll be printing gdp in excess of 3% starting in the third quarter. >> okay. so walk us through to the point when the fed starts tapering. according to your forecast, what will unemployment look like? and how will the fed and how much will the fed taper? >> i think the unemployment rate could still be around 7.5%. i think what they'll be looking at. remember, it's the outlook, not where unemployment is today. and what they need to see is gdp consistently performing above frie

trend, which is about 3.2%, if they believe gdp is consistently growing in excess of 3%, that's enough to improve the outlook for the labor market. and i think, you know, by the second half or, you know, by the third quarter even, we'll have some convincing evidence that at least we're on the right path. >> okay. so the tapering, what -- how do you think that will look like? will it be by a lot? at that point, if that is what comes to pass, your forecast, how much will -- >> i think initially it'll be very small because i think the fed is concerned about a backup in the treasury yields. i think they'll try to do everything in their power to make that transition as gradual as possible. i don't think it will work. i think the market will try to front run them the second if it starts tapering, markets will price out the entire, you know, flow effect of quantitative easing. and so i think that, you know, in the third quarter the treasury on the ten-year could back up as many as 50 basis points. >> appreciate it.

let's go back to jon fortt with more from oracle. jon? >> we've got the numbers from oracle. a couple of things before i get to that, she said she was going to guide conservatively. she also said that some of the deals that should've come through in q-3, less experience in salesforce wasn't able to pull in. those have begun to close in q-4, acted like she wanted to sound optimistic, but at the same time said i'm going to guide conservatively. here's the guidance. the revenue range from minus one to plus four. the street was looking for just over 5% growth in revenue. new license in cloud revenue, the range is from 1% to 11%, that's both constant currency and u.s. dollars, the street was looking for 7.6%. the midpoint below what the street was looking for. hardware, this is the big one, the guidance is for negative 23 to negative 13% in u.s. dollars. the street was looking for just

slightly down, pretty much flat hardware revenue and a non-gaap eps guidance. the street was looking for 81 cents. so that's right about at the midpoint, melissa. >> all right. jon fortt, thanks so much for that. >> it doesn't look -- i mean, i don't know. i don't think it's -- this is -- these are real numbers. the sandbags typically are just a tweak. these are lousy. they mention the currency head winds in all three of the spaces. i don't think it's a sandbag. i think they're seeing something that maybe the rest of the street didn't see. i could be completely off my rocker. i think timmy addressed it a little bit. it's just not good. there's nothing here i see if it's any good. >> all right. we'll continue to get updates later on. meantime, ahead on "fast," these stocks are emerging as potential winners in our calls of the day. plus, get post fed decision stock picks from a fund manager

who is standing out from the rest. he's up 200% since the bull market began. and later, "fast money" madness resumes, the best stocks in the land. the traders and your tweets determine the winners. back right after this. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air.

suddenly, faraway places don't seem so...far away. ♪

welcome back welcome back to "fast money," i'm josh lipton, we're watching jc penney, and here is the news. the company's saying that this consortium of bondholders has now withdrawn and rescinded its notice of default. remember, it was back in february when jc penney received a notice from this ad hoc consortium of bondholders about the bonds in question. i spoke to stacy of sw retail advisers. and she says, sure, the bondholders walking away relieves pressure here, but does nothing to change her thesis on the retailer. remains negative until traffic reverses and customers return, she says. melissa, back to you. >> thank you. mike, what are your thoughts on this? certainly could relieve some pressure at least in the most immediate term. >> yeah, takes a little bit of pressure off, but a little when you have a lot is not really making much of a dent. so they've got -- net of that last, they've got $700 million

in negative free cash flow this year. 41% interest is the only positive i can see. meaning that a lot of people have bet against it so forcefully that could actually cause some kind of a spring. let's not forget, revenues down 25% year-on-year and after eking away if many years. it's hard to see why you would be positive on the name right now. >> let's move on and get to our calls of the day. a couple caught our attention and put this in the trash file because these are names that have been left for dead not too long ago. first of all, blackberry, the release of the new blackberry z-10, 48 hours away. shares spiked after morgan stanley updated the stock and more than doubled the price target to $22 a share. guy, you wanted to talk about this one. this is an interesting note, they said, oh, you know what, devices won't burn as much cash, services will bring in some cash. >> you mentioned this morning in your show that some of the parts sort of rings hollow a lot of times with these stocks. they skip basically the double

dog dare, they went from underweight to overweight. we talked about this. >> i'll do that every time. >> i want you to do that. >> and there was something going on in the stock. i think the company still is lousy, but i think the stock's clearly in play. it doesn't surprise me we saw this move. i think there's further money on the upside. >> part of this is these guys actually have a phone that compete in this price point. i don't know that the retention and we're going to see this with the windows phone and android phones, but in this space, i think blackberry's starting to make some presence and people want to believe. then they add in the reasons why and you've got reason to rally. >> the analyst over at credit suisse calling its the best near term idea at this point. do you like this? >> no. >> it seems the penguins are jumped into the icy waters and they like best buy. >> precisely, that's an excellent analogy. the same thing as blackberry where people are getting excited about a little bit of a turn

around, but there's no reason to go shop at best buy anymore. i mean, the best thing i could say is maybe they get the ecommerce, perhaps, the stocks had a nice run, i would be out of this thing very fast. >> can i say -- may i just sort of interject? >> go ahead. >> hash tag was on this on the bull case on the street fight when it was like 19. >> i remember that. >> in fact, i'm going to say that might have been timtim's first win. >> it was your first win. >> well, the point was that the showrooming element that these guys got ahold of it. if i can go to best buy and look at my samsung 52-inch and buy it there because i know i'm getting best price guarantees, i'm going there. i mean -- >> good point. let's take the hops and drops. we've got a pop here first solar up 6%. tim? >> sun tech power, which is the massive chinese player filing for bankruptcy is putting at least a positive spin on the

rest of the sector which is that overproduction and lack of discipline in this space may be coming to an end. good for the leaders and first solar is a leader. >> pop for c.o.p. >> yet another street fight name. we talked about they're spending a lot of money looking for oil out there. guess what, people are starting to find oil out there. we said that's the missing link for these guys and the stock is lagging, it should rally. there we go. >> pop for lennar, up 5%. >> yeah, great earnings today. the interesting thing about lennar, house prices are rising faster than the costs. that's great for the company. these housing stocks have gone a lot farther than i ever thought they would. but it's the energizer bunny keeps going. >> drop for deere down 3%. >> downgraded today based on the fact that the analysts said corn is going from $7.25 a bushel down to $4.75 a bushel. this may happen, but it's not going to happen overnight. one where you might take advantage of the downdraft for a few months, you know, look at options maybe in the june time frame, sell some puts to buy the

stock. >> down 1%, mike? >> yeah, so they just floated $275 million worth of convertible notes today. in addition to this, came out maintaining a sell with a very low price target on it. look, this is a business seeing low utilization rates. maybe the only good news for them is you probably are seeing stabilizing net coal and iron ore prices, but still a sector i'd stay away from. >> another pop for deere. different kind of deer this time. a michigan man told police he hit a deer and the animal was in his trunk. watch what happens when the officer opens the hatch. ♪ back to life back to reality ♪ >> as you see there, the would be road kill came back to life and eventually bounded into the woods nearby. now, when i heard about this story, i thought about what happened with you when you also hit an animal. >> no, when i hit it, i actually killed the thing. they're pests. i was with my son and he was 9,

10 years old at the time. whacked it on the way to school, crying in the front seat. i'm like, toughen up, little man. >> poor kid was bawling. >> yeah. >> did you drive around with a cross bow? >> look -- >> just an extra wide bumper. >> coming up, a look at whether another market breakout is ahead. and he is up 15% so far this year. find out where john rogers of ariel investments is. tdd#: 1-800-345-2550 when i'm trading, i'm so into it,

tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies, tdd#: 1-800-345-2550 spot patterns and find opportunities more easily. tdd#: 1-800-345-2550 then, when i'm ready... act decisively. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 with the exact same tools, the exact same way. tdd#: 1-800-345-2550 and the reality is, with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 ...until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-877-656-8748 tdd#: 1-800-345-2550 and a trading specialist

tdd#: 1-800-345-2550 will help you get started today. it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work.

cisco. tomorrow starts here. all all right. can the markets maintain this rally? joining us on the fast line is

tom mcclellan. always great to see you. and two charts in particular you wanted to walk through for us. one was the s&p versus copper. what do you see here? >> well, copper is something that behaves mostly like the stock market and it's been that way ever since about 2007. it used to be more of a pure commodity, but since 2007, it's been more like a financial asset. and so it moves up and down with the stock market. the dow challenging all-time highs and copper making new lows for the year. that's definitely a sign, a divergence that is important, the stock market still doing great because the fed's pumping money out there. but there are signs of suffering elsewhere. >> all right. and also, the dow versus ge. and you're taking a look at this for the past six months. >> ge is great bell weather for whatever the dow's going to do. because it's a dow component it's understandably going to move with the dow. but ge tends to top before the dow does and ge is not making

higher highs along with the dow. that's another warning that, a, there's problems, and that we ought to pay attention. >> tom, it's brian kelly, you're saying short the stock market and buy copper? are you looking for those to converge? or are you just saying get out of stocks? >> i'm seeing the indication copper's giving saying it's turning down and heading lower and why isn't the stock market listening to that? why isn't the stock market doing what copper is already doing. it's a sign that people are a little bit too much invested emotionally in the subtrend and don't think it can go down and copper says they're going to be proven wrong here in a short time. >> all right, tom, we're going to leave it there. thanks so much for phoning in. tom mcclellan. we've always referred to copper as dr. copper. >> morgan stanley had a point that they see recovery going on in copper.

miners getting destroyed everywhere. you would think you'd see more of a recovery in copper. i think the move is overdone, i think the move in minors is overdone. also we haven't been playing from the long side, we've been playing from the commodity side. >> lululemon sliding 4% since they announced a major recall of the signature pant citing problems with the fabric, problems meaning transparency with the yoga pants. and so, mike, you're taking a look at the action there. what did you see? >> yeah, so we noticed activity in the april 60 puts. trading at about $1.70, bearish bets that the stock would be below 5830 by april exploration down another 8.5% from the 63, 65 level. this is a company trading at a reasonably high valuation and demonstrates some of the risks, i think, when a stock runs into trouble. my wife still buys their pants, though. >> hold on, can you explain this? maybe guy can explain this.

transparency in their yoga pants. >> they're see through. >> when guy's doing a puff pigeon and i happen to be on the mat behind him. >> you're going to get a show you didn't think you were going to get. >> i'm leaving the gym is what i'm doing. >> yeah. >> but some might want to stay and some might want to stay in the class. so there might be an audience for -- >> have they ever had a better pr than the last few days? >> that's a guy's line, right? we're talking about lululemon. >> when you're out killing deer, are you wearing lululemon's yoga pants. >> i'm not looking to hit the deer. but what do you want me to do? deer jumps in front of your car, should you swerve and hit a pedestrian? no, hit the deer every time. don't deviate. >> the deer wasn't coming at you, you swerved into the other lane. >> way too many deer out there in the world. don't get me wrong, get rid of more of them. no problem. keep going. >> let's play the good, bad and ugly. tonight it stars brian kelly.

the good, last time weighed in on dollar tree on a round of pops and drops. here's what he had to say. >> the dollar stores have gotten crushed particularly by walmart. probably a bit oversold here. looking like some better numbers and i heard some chatter that steve weis bought a whole bunch of tube socks, should help the top line. >> that's a tough visual too. >> it's up about 17%. >> that's deep fundamental research right there. absolutely. i actually still like the dollar stores here. these are a bunch of names i've been short -- i was short earlier in the year and i think it's time to be long them again. >> i presume they're really long tube socks. >> '70s style. >> with a little red, white and blue stripes. >> love it. >> all right, now on to the bad. a day before his dollar tree call made this bear occasion for general mills. >> in their revenue, they had 27% revenue growth in europe.

i don't think that's sustainable. phillip morris came out today and talked about how they can't get revenue growth in europe. if you can't sell an addictive product and get revenue growth, there's no way to be able to sell cereals and get revenue growth. >> general mills is up 12%. the company beating earnings today and popping to new all-time highs, in fact. >> you know what i forgot about this is that people actually have to eat. that's the part that i missed. >> it's an addictive problem. >> yeah, it's a necessary product. wrong on this one and i would not be short it here. >> by the way, the ceo of general mills will be on "mad money" with jim cramer tonight. don't miss that interview. >> whoa, whoa, whoa -- what's -- you'd think you'd learn by now. they teach you anything at that ivy league school? what's the name of the game? good, bad, ugly. what do we got? >> maybe that deer -- >> nothing. >> these guys are dying to know who won the street fight. so in a "fast money" first, tim won.

>> that's what i'm talking about! going to disney world. >> that was ugly. good for tim-tim. yay. >> the big joke is tim-tim wins them all, but we have to make -- >> no. >> well, we talked about best buy, blackberry. >> anyway, those weren't street fights. move on. >> does tim seymour win all the street fights but is maligned? he's outperforming this bull market by more than 200%. john rodgers ceo of ariel investments tells us which stocks he finds compelling right now. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor...

[ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪

bernanke's remarks moving the markets higher today according to guests, the fed will maintain stimulus until the end of 2013. let's take a deeper dive into stock picking with john rogers chairman and cio of ariel investments. the investor fund is outperforming the s&p 500 year-to-date and has returned more than 230% since the bull market began back in 2009. great to have you with us. >> great to be back.

>> we were talking, of course, about the fed and quantitative easing. if for some reason because we had a guest earlier in this show saying the fed could start tapering that program sooner than we all think some time in the fall or so. will that impact your outlook for stocks? >> i think the long run would actually be a good thing. that would be a sign that the economy's continuing to be robust, earnings are coming back, profitability strengthening. so we would be fine if the fed had to slow down the easing. >> i really want to get into your stock picks since you have a stellar performance. and i'm sure a lot of people out there want a little bit of magic in their portfolio. igt is one of your picks. it's up 4.4% for the past year or so. what do you like about this stock? >> well, we think it's bargain priced today. and they are the number one manufacturer of slot machines around the world. and we think you're going to see slot machines literally all over the world. places in china, places more in europe, south america, it's a big growth area.

and of course, what happened domestically, more and more states have financial difficulties, igt will be providing the slot machines that help having gaming revenues. >> hey, john, j.j., how are you? on igt, there seems to be a lot of competition in the space which is probably great, but in terms of overseas, do you see enough revenue to take us up to, you know, the 52-week high of $19 on this stock? >> i think the stock is so cheap it's selling at such a low multiple, i do think that the growth around the world will be what will drive it. wms was acquired by a competitor and the stock went up 60%. big premium to show that people thought that industry was undervalued. and i think for whatever reason, people have gotten caught up in the short-term issues and forget about this long-term opportunity around the world for igt. >> hey, john, brian kelly, i'm curious about one in your notes here, mohawk, we've seen all these names, all the housing names just on a tare.

how much further can they go? >> i still think we're getting started. this housing recovery is really, you know, still in its infancy. we think companies like mohawk is one of the two largest manufacturers of carpets in the world will really benefit from that housing recovery. and so i think we're just getting started and mohawk is one of those premier brands at the best at what they do. >> and one of your last picks is madison square garden which also had a monster run over the past year or so. what's the outlook for this one? what's the catalyst in the stock? >> well, you know, there's only one madison square garden, they had that extraordinary land in midtown manhattan. great hockey team. they're going to -- in overtime, they're going to be back in the winners circle. i think the knicks and the rangers down the road will win world championships again. and they have great pricing power. that inhibits new competition, and i think you'll never really have another competitor for madison square garden in

manhattan. >> i also want to talk to you about holdings since the bottom. at this point, how do you decide when to trim or to actually eliminate these positions? and we're talking about cbre, meredith and royal caribbean seeing tremendous runs since '09. >> well, the two with the most explosive growth, you know, royal caribbean is up close to 500% from the market lows and cb richard ellis up close to 8%. spectacular runs. we think they're good long-term core holdings, but we have lightened up because they're not as bargain priced as they used to. meredith is one of our favorites today, up roughly 300% since the market bottomed, there's a great story about meredith and the ceo steve lacy and business week this week. they're really well poised with their better homes and gardens and television stations. we think there's really a lot of room to run in meredith. >> even though the timing deal didn't work out in meredith fell on that news, that has no impact, you still like meredith for the property it has? >> we really do.

and there's a lot of opportunity to enhance shareholder value there. >> it was a pleasure to have you with us. hope you'll come by some time again soon. john rogers of ariel investments. which picks do you like? you can't really argue with a man who has had such a great record. >> yeah, listen, makes some excellent points. the only ones that would concern me is buying mohawk up here. he's got a nice profit in it so he has kind of a free look at it. but i'm not sure that i would be plowing into it at these prices. coming up next, "fast money" madness. round one continues, tonight's match-ups are triggering big fights here. our traders and your tweets decide the winning stock. check it out fastmoney.cnbc.com. if you think running a restaurant is hard, try running four. fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores.

rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase. at a hertz expressrent kiosk, you can rent a car without a reservation... and without a line. now that's a fast car. it's just another way you'll be traveling at the speed of hertz.

a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ at tyco integrated security, we consider ourselves business something optihow?rs.o say? by building custom security solutions that integrate video, access control, fire and intrusion protection. all backed up with world-class monitoring centers, thousands of qualified technicians,

and a personal passion to help protect your business. when your business is optimized like that, there's no stopping you. we are tyco integrated security. and we are sharper. the the "fast money" madness challenge is on. and it is heating up. we started with 64 stocks, but only one will be named the best in the land. yesterday in our technology region, apple triumphed over hewlett-packard in a very heated debate in our health and home region. ebay eked out a win over home depot. we start tonight's faceoffs in our financials region. so let's go through the debate earlier today. based on our traders vote and

twitter votes, bank of america, blackrock, jpmorgan, wells fargo, visa and citigroup have all advanced to round two. one upset could be brewing tonight in our live match-up, it is the number 15 seed aig versus number two seed goldman sachs. so we start off with what the pick would be here on the desk. guy? >> this is interesting. and i'm -- i think i sent -- i'm going to change up here. because -- >> yeah. >> it's all about where the stock. what has potential in terms of the stock. and goldman's had a monster run, maybe the tape's getting squishy up here, i don't know yet. aig as lousy as i think things are, the stock's got some mojo. >> it's a hedge fund favorite. >> it's a hedge fund favorite. so one of the first times, 15 -- i think the 15 seed moves on. >> really. knocking goldman out. >> you know i love goldman. >> yep. it's not about who you love. >> not who you love. i think it might perform. >> just like any big game, you

don't fade the champion, i've got to think goldman sachs all the way. i agree with some of your points on aig, guy, but goldman sachs is going to continue. >> tim? >> look, the days of the belmonts of the world getting to the final four and what not are not happening here. aig, first of all, i could never vote for after what they did to us in 2008 and into the crisis. sorry, it's personal. goldman sachs to me -- >> -- for our help. >> they were taken way over their skis in terms of taking risk. goldman sachs, seeing recovery and seeing recovery in investment banking, the move to 150, if you look at it in a 1 1/2 year basis, isn't all that impressive. more room to go, not expensive on a price to book. >> this could be a tie. b.k., where do you stand? >> i think aig, that's where you've got to go. in an environment where, yes, we've bailed out aig, you think they're going to let that company go down again? absolutely not. nobody likes them anymore. their business is being destroyed, whittled away, but

the stock's had quite a run. i say aig on this round. >> you know who has to break this tie, the viewers. let's find out who you voted for on twitter. and it was goldman sachs. the winner is goldman sachs. look at tim running around. >> insane. >> sorry about that. >> come on. >> i wouldn't catch that -- >> act like you've been there before. >> goldman sachs advances to the next round. thank you, viewers out there for tweeting your responses. as you can see, you really do break the ties here on the desk. let's move to the industrial region based on our votes earlier today, united technology's caterpillar, deere -- >> hold on a second, haven't we killed all the deere? >> deere with an "e." dupont and honeywell beating out the competition, but the battle between valero and transocean will be settled right now. so, again, we go to the left side, my left side of the desk,

guy? >> now this is going to fly in the face of what i just said about goldman and aig. valero's had the run and rig has not done a lot, i think 52-week high is 59. that space seems mired in the mud. although head winds have started to come across their bows, i think there's still upside. i've got to go valero, mel. >> how about you, j.j.? >> i've got to take the other side of guy again. i'm going to have to go with rig on this one. valero has had the nice run, it seems to me that transocean is going to come through on this. >> tim? >> no question, it's rig, sorry, guys. a very big deal for this company. the carl icahn thing, the pressure on the company to pay a big div, it's a catalyst on the stock. are you kidding me? here we go. >> b.k.? >> i'm not going to tie this one up. i'm with rig on this. guy actually won a street fight a while back on conocophillips

and the argument was people are looking for oil. what does rig do? they look for oil and there are some head windos in the space. >> let's see who you guys voted for on twitter. and you guys voted for valero. sorry, the winner's still rig. >> wait a second -- hold on -- >> they're the tie breaker. everybody's equal. you are equal to the viewers out there, guy. >> you know what, given the choice, i'd rather be equal with the viewers because that's how i roll, mel. >> buddy, you've got a little something on your nose right there. clean that up. >> to say the full bracket of all the stocks in play, log on to fastmoney@cnbc.com and you can get in on the action by tweeting us at cnbc.com/fastmoney. there'll never be a tie once again because you out there are the fifth trader. >> it's nice, mel. >> yeah, it is.

>> you out there. you, by the way, a female deer. guy, how are you doing? >> trading your tweets, find out which ones made today's "fast money" cuts. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.

carfirmation. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz. a new ride comes along and changes everything. the powerful gs. get great values on your favorite lexus models during the command performance sales event. this is the pursuit of perfection.

we're we're live at the market site here in time square. you tweeted so we traded. the first one's for j.j. what's your take on deere? it's up 62% over the past year. >> well, this is one of those that i would maybe not get long if i already had. i would wait for it to sell off. ceo on our last quarterly calls, it is the best they've been in 35 years. it's had a nice little run lately. so i would wait until the stock maybe got below 25 before i got back into it. >> listen up. facebook, will it hold the 200-day moving average. buy, sell, or hold? >> well, it would be important for me to know what the 200-day moving average is. it would be incumbent upon me to know the answer, which i do not. but we talked about getting out of the stock ahead of earnings.

another one of those street fights, right? so my sense is the stock has traded horribly on what's been a great tape. i don't see, again, i don't see any reason to go piling into facebook. >> 25 1/2. >> we're right there. >> we'll find out soon, then, and i'll be watching with you. >> incumbent upon you, my man. >> tim, is china flash pmi taking this higher tomorrow? >> i don't think so. china pmi last month was down from the month over month. people have been very concerned about the chinese numbers, i think this has been a liquidity fueled rebound in this economy. i don't think these are going to be better numbers. having said that, china has sold off, china was going to bounce, i would play it that way. >> b.k., any thoughts? >> yeah -- >> i thought you were going to say no. what are they? >> you know, all these names, again, i think any of these construction names, anything like that have gotten so far ahead of them. you have to take some profits here. at the very least, buy a put for crying out loud. >> for crying out loud.

mike, hrl, as guy likes to call it hurl. a juicy short buying june 40 puts, what do you think, sir? >> i think that's a very nice play. those options are a little bit wide. you want to be careful on the spreads, this stock has run up almost 30% on the year. and this is a single digit grower trading at 23 times, there's been a lot of buzz in the food business. but the stock has run too far, too fast for me, i like the trade. >> ham and peanut butter and jelly are the two most popular sandwiches. >> yep. >> right. >> did you know that? >> sold to you. >> i'm with the hash tag on that one. roast beef provolone. >> stay tuned. thank you orville and wilbur...

...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. so we created the extraordinarily comfortable sleep number experience. a collection of innovations designed around a bed with dualair technology that allows you to adjust to the support your body needs - each of your bodies.