will that clear the decks for those who missed the rally to come in and spur yet another leg higher. one of the best reasons to be in u.s. stocks, according to market technicians is that no one believes in it and are consistently asking when the next sell-off is coming. before we go, the market today on the upside, 55 points higher on the dow jones industrial average. have a great night, everybody. i'll see you tomorrow on "closing bell." stay right here on cnbc. "fast money" begins right now. live from new york city's times square, i'm melissa lee. tonight, easy money. the central bank printing press is in overdrive from europe to japan. we're trading the global macro trends with one of the best fund managers in the business. saving face. will facebook's mobile home breathe fresh life into the stock, or are they asking you to overshare? the traders take their positions. and commodity crush. why oil, copper and gold can't seem to rally on good or bad news. we're trading all the big moves

with guy adami, steven grasso. and we're joined by david gerson, started his investment career with julian robertson at tiger management. david's global macro fund has seen annual returns of 12% since its inception. we're pleased to have him on "fast money." great to have you with us. >> thank you very much. >> first, we want to get back to a market flash here with josh lipton at headquarters. breaking news in the afters session. josh? okay. we're going to bring josh in a little later on. let's go to straight to david gers stenhabber. and we're expecting a very big report tomorrow. what you're expecting in terms of the jobs report. >> i'd be foolish to predict. >> the consensus is probably about 190, 180,000 right now.

it's come down a bit as a result of the data we've seen over the past couple of days. but i think that's probably in the ballpark r park of what we're going to get. and that's a number that is not too hot and not too cold for the fed at this point. it's going to keep them in play with their easing policies and keep the juices flowing for the equity market. >> how do you see that in terms of the trend? because we have seen some pretty good data points on the economic front. but are you expecting the bad news, so to speak, to be back loaded into the second half as we are facing the headwinds from sequester? >> the impact of sequester has been pretty minimal so far. >> right. >> and i think we're all wait to see if it has much impact. but the cyclical side of the economy is behaving pretty well. the interest sensitive side -- autos, housing, quite strong at this point. and so the real issue is this enough to overcome any impact from the sequester. so far the answer is yes. but we haven't had much impact from sequester. >> david, i'm of the belief and it's a structural job change that maybe 7 1/2% unemployment is the norm. companies have had three years

where balance sheets have never been better. it's a higher focus than they have on productivity until recently at record levels. if you haven't hired now, when are you going hire? do you believe that? do you think that people will maybe start hiring now? >> i think the economy has gotten somewhat better, no question about that. and hiring has picked up as a result. there is a lot of excess capacity out there at this point. and there is not a motivation to build new capacity in the united states other than perhaps in petrochemicals as a result of cheap natural gas and things of this sort. so how you get those jobs moving is unclear. but housing picking up is one way that you're creating jobs. new construction has picked up. so it's structural unemployment higher than it was? perhaps a bit. people have lost skills. but all the way up at 7 1/2%, i don't think so. >> you have said in the past that the advantage of being macro, a macro fund is that you can see the economy and then also weave in and out of various asset classes. with your view of the u.s.

economy, where do you see the most opportunity in terms of the asset classes in which you invest? would it be in u.s. equities or would it be in the credit side? >> i think that the equity market is okay at this point. well may have a correction at any point, as everybody has pointed out recently. but as i mentioned, the fed, with their asset purchase program, is still very much in the game and unlikely to change at any point for a number of quarters. and we're unlikely to see any monetary tightening until a year and a half from now at the earliest as things currently stand. so i think the fuel for the equity market to continue behaving exists. credit is okay, but it's expensive. at this point. and so i'm finding things to do outside of the united states that i think are more interesting than the things to do inside the united states right now. >> is that a reflection of your belief that other economies are stronger than the u.s. economy at this point? >> or weaker. >> or weaker, yes. >> japan i think is a case in point. we have come to the point where there is a serious attempt at

reflation being made in japan right now. and reflecting that, you had massive stimulus program from the bank of japan last night. you've got an economy that seems to be picking up. and i find that fascinating, because they've been in a bear market both in property and in the stock market for an extended period of time. and it wouldn't take a whole lot to generate more favorable outcome there. >> how does the home gamer play it, though? do you buy the ewjs? it's had a pretty good run. we saw it back off a little bit. but for the person at momentum trying to play japan, does he play something like that, an etf? who do you play? microor macro? >> no, i think you play it macro. i think the index is going up. i think the currency is going down. so i would buy the etf that protects you from the currency weakness preferably. but that market can move a long way there is a lot of time between now and their next election this summer for the upper house. and there is a lot of hope that can be generated.

and markets you know, like a good story there is a good story in japan right now. >> is there such a thing as a credit trade? i'm curious, because you worked in japan. and you made a very good call when you were at tiger. you're credited with seeing what was going to happen in terms of the japanese recession. so when you see this sort of trade and everybody is talking about it, almost to point where your cousin and your mother and the taxi driver is talking going long equities in japan and short the yen, is there such thing as a crowded trade at this point? >> i think that the trade is undersubscribed by the domestic institutions in japan. and so if you get them shifting their asset allocation even at the margin towards equities, away from bonds towards domestic equities, away from foreign instruments you could have a very substantive rally in the japanese stock market. it's not an expensive market. it's well off its highs. it's been going up not for particularly lon.

long. >> that's different from the united states where the financial market has been going up. this market hasn't gone up for very long at all. >> what is your view on europe, and how do you reflect that in your portfolio? >> europe's tough. i think europe is in recession, will remain in recession. europe is where we have periodic brushfires that give us difficulties in our own markets as a result. and so i think europe is largely in a void other than some particular credit opportunities that exist over there. but not for the faint of heart. >> the long side or the short? >> credit on the long side. i think that, again, with the caveat that this is not for the faint of heart, i think some of the bonds from the peripheral economies are quite interesting at this point, because i don't think that we're going to get a country exiting the eurozone. and some of these bonds have room to appreciate as a result. the currency i think should weaken. but that's a common in terms of crowded trades, that's a common

perception, and it hasn't weakened very much. >> let's talk real quick back to japan. typically that would take months for that to happen. ten years ago when i was a desk, it happened in one day. a big move is pretty huge in dollar yen. does it continue, and if so does it create headwinds for u.s. exporters, japanese? who is the most benefit from that, who will most to their detriment? >> well, the japanese exporters are clearly going to benefit from the weakening in the currency. the move it had today only brought it back to where it was a handful of days ago. so it had come off. this is a bit of a catch-up move. will it continue? i expect it will continue to weaken, yes. the monetary policy that is being put in place is highly expansionary. they're going to double the supply of base money in this economy over the next 18 months or so. the asset purchase plan that they've put into place where they've stepped it up significantly really is pretty extraordinary. so there has been a monumental change in terms of monetary policy in japan. and the currency deserves to weaken as a result of that. >> david, given that the

japanese have really done this shock and awe, the boj, the shock and awe, because that was a huge move. >> yep. >> given that they did that and the san francisco fed yesterday, a gentleman there was saying that he thought that we could start easing out of our quantitative easing sooner than people thought, i think that's off the table. i've said that for months that i don't believe that's even a pipe dream we're going to be easing off on that until at least 2014 you. say the boj going out at least 18 months with this doubling up of purchases of bonds and stocks. i think all of that augurs towards our fed being stuck in this position for a very long time. at least most of those 18 months. do you agree? >> yeah, i would agree with that. i think the feds made very clear what is going to drive them. and it's the labor market. and they have to see sustained improvement in the labor market, and they have to believe that that improvement is going to continue as well. they have to be willing to forecast sustained improvement in the labor market. that's why tomorrow's numbers is

so important. if it's middle of the road, it just keeps the fed this the game that they've been playing for now. so i think that we've got two or three quarters of the asset purchase program in the united states at its current level before the fed would even dare to begin to taper it. and i think we're looking beyond that substantially before they would raise interest rates. >> all right, david, stay right there. you're going to stick with us for the next 15 minutes or so. a lot of ground to cover, including why david thinks maybe there is an end to the safe haven tradeout there. so we'll get to that in a minute. in the meantime, i want to check in with josh lipton, that news on hewlett-packard. josh? >> hey there, melissa. hewlett-packard certainly making some news today. raymond lane stepping down as chairman of the board. he'll be replaced at least for now by ralph whitworth. lane saying he decided to step down as executive chairman to reduce any distraction from hp's ongoing turnaround. he'll continue to serve hp as a director. the stock has been on a tear. the best performing dow component yearer to date.

melissa, back to you. >> thank you very much, josh lipton. nato not much movement in the after hours session on the news of whitworth, a renowned activist investor here. >> it's a great name. i find it a little hard to believe ray lane doesn't want this to be a distraction. what was the whole proxy fight about then, going around trying to say choose me? if that tenure isn't one that should result in someone being replaced as chairman. >> right. >> what would be? >> right. >> what would have to happen? what other things would have to befall hp for them to get somebody new? it seems ridiculous. >> more positive on hewlett-packard based on or this or is the run over just because of the gains that it has seen this year? >> i don't think this news has a lot to do with it. i think it's a turnaround story. two days ago we heard the stock was out of gas just on the basis it has run too far, too fast. i think it's not out of gas. >> i'm out of this one. sadly been out since 20.

i think there will be opportunity, melissa, to play it again. just not right now. >> before we head to break now, let's take a look at the-hours movers. down as much as 16% on preliminary q the results. f5 sees revenues of $350 million. compared to an estimate of 376 million. so a huge collapse in the shares. a story that le we will continue to track for you. meantime, coming up next, the big money talks to "fast money." we'll have much more with david gerstenhaber. and still to come, blackrock's head of muni bonds, peter hayes is here with his top ideas. for all you yield hunters throughout. plus the best strategies for positioning your portfolio both now and for the long haul. stay with us on this very special edition of "fast money." with fidelity's new options platform, we've completely integrated every step of the process, making it easier to try filters and strategies...

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let's get to the calls of the day. a mixed bag for tech. lazard initiating apple as a buy while bank of america downgraded to a neutral. let's talk about the apple. $540. and the gist of this is we got to look at apple as a different kind of company. so let's look at it as a storage

company, because this is the kind of company that both sells storage but also creates the demand and use for storage. karen, do you buy into that? because storage i would imagine as a percent of revenue is dinky. >> well, i mean, i don't know. i'm long apple. clearly this has not been a good place to be. maybe it's a fruit company. i don't know what it is. but it doesn't even seem to matter anymore where the fundamentals of the business are versus this stock as being one that is so out of favor with investors that -- okay, i'll buy the storage thing, i guess. i don't know i subscribe to that. >> an innovative company. that's what sold apple, the company for everything. >> i don't believe that's dead. >> exactly. but the point that people are starting to talk about it as if it's not that company anymore scares me. i'm still long in the name. but you got to be long in the name because of the products. you got to be long in the name because of what coming down the pike. not because of the storage company. i think it's a silly argument right now. >> but to steve's point, what

steven jobs famously said is we have to tell the customers what they want. we have to show them what they want. they've not been about that. >> they're reactive now. and they're not even reactive because they're not giving people what they want. >> that's exactly right, melissa. they're not giving people what they want. they want the larger format phone. now apple still thinks they want the smaller format phone. i think if they announce that with whatever the new 5s or whatever it becomes will be, i think that's a huge miss for them, and the stock could see at least another 10 or 15% down, if they do that. >> another 10 or 15% lower from here? >> exactly. because people will not upgrade to just another small format apple iphone. >> right. let's bring in david gerstenhaber of argonaut capital, our special guest for the next hopefully as long as he'll stay. david, i'm curious what your thoughts are on a stock like apple, which so many hedge fund managers have held. but it is, as karen had mentioned, you can see the value in the company on the balance sheet, but it just can't get out

of its own way there is something about the sentiment surrounding the stock that prevents it from trading higher. >> well, i think you're seeing a shift in terms of the ownership of the stock from the growth investors to the value investors at this point. it's become a very inexpensive stock if you believe the numbers that are out there. and i don't see any reason not to believe the numbers on the stock at this point. but it's got a shifting allegiance in terms of who is willing to own the stock at this point. so should it trade where it trades in probably not. but that's what happens when something gets overowned. and i think that we're still redistributing that stock. >> so a lot has been made of their cash position. let's just assume that they could repatriate everything, talking about $135 billion. i'm sure you thought about it how. would you put it to work? >> how would i put it to work? >> yeah. >> they have incredibly low yielding assets at this point. one of the ways i would put it to work would be to advance the business somewhat further.

they can step up capital spending. i mean, look, they're competing with samsung at this point. and if samsung innovates at the pace that they're innovating, that's a problem for apple. so apple's got continue to be as innovative as it. some of that money will be spent on innovation. now, i'm out of my depth when i start to talk about companies that this sort of a microeconomic level. we're macro players. but nonetheless, having that huge amount of cash earning nothing, when it could be invested in more aggressive types of vehicles i think is foolish. >> are your funds invested in apple or, you know, what are your general thoughts about technology, which is of course a major component of the s&p 500, but has not seen any of the upside in terms of the rally. >> the -- the answer is in our equity vehicle we are invested in apple. it's a long position for us. and as you mentioned, it hasn't been the greatest position to

have this year. now, it's been a good position in the time that we've had it. it's gone up quite substantially. but it's been a particularly disappointing stock over the recent period of time. technology in general, i think you can't lump it all together. i think you really need to think about the different pieces of technology. there are companies that are simply struggling to hang on at this point. and there are companies that really are making hay while the sun shines. and the market is differentiating between those companies very, very clearly, as far as i can tell. >> so as far as making hay when the sun shines, what kinds of companies are those? >> the companies that i think you want to be most interested in are those that are not the old hardware companies. the old hardware companies -- >> uh-oh -- >> aren't i don't find them particularly interesting. they may be interesting on an lbl model, on a value basis. but they're struggling for margin. they're struggling for sales. i'm much more interested in

companies that are growing. >> let's move on and talk about safe havens, because as you all know, gold hit its lowest level since may of 2012. the question we've had for some time at this point, is this safe haven trade over? because the things that should move gold are not moving gold higher. david? >> i think it probably is over. we've just come through a period where we saw tremendous tension in the markets as a result of cypress. and you barely got a blip out of gold. we've seen other sensitive commodity prices weakening. quite substantially recently. so my sense is that the global economy is improving. it has runway to continue to improve, and the investment community is now much more interested in buying assets that can appreciate than simply finding safe havens. i think gold, again, fits into the category of those things that had gotten quite overowned and is continuing to be redistributed.

>> so you had been short gold at one point. >> correct. >> and as i understand it, you closed out that short position. does that then move into a long position into -- >> no. >> no. you don't even know what i'm going to say. >> go ahead. >> a long position into say industrial metals? i mean, if your view is that the global economy is improving, so a gold short is no longer in play is being long in industrial metal be in play? >> i think the industrial metals are driven by china. and what we're seeing in china right now is them tapping on the brakes again a bit relatively quickly after they had really let off of things. so i think the industrial metals in this kind of an environment are troubled as well. i don't find them particularly interesting. i don't see any great upside for them. >> so let me ask. let's say you have a view of, okay, you are bullish on japan, the market in japan. how big of a bet will you take in your fund to express that view? how much conviction would you have in this idea, for example? >> i think we would be willing

to take a fairly large bet as a proportion of net assets both between, for example, a short in the currency and a position in the equity market. you know, i would be happy to see us running more than half of our net assets in a trade of that sort. >> really? >> yeah. >> so would a toyota motor be a natural -- if you overlay a dollar/yen chart with toyota over the last k0u7 of months, they basically trade lockstep. so let's say trades north of 105, it would certainly appear that toyota has room from current levels maybe to 120. is it that simple? >> i think the high quality exporters will continue to work as long as the currency weakens. and we anticipate that the currency will continue to weaken. but i think the real beneficiaries of what is likely to transpire in japan are what are referred to as the domestic reflation plays. these are really the banks and the real estate companies and the j-reits. and they have gone up

significantly. i think they can continue to go up very, very significantly. property prices appear to have bottomed, shadow property prices in tokyo are rising. if we really have reflation in japan. it's an exciting thought. the prospect for any increase in property prices and the stocks associated with those things is pretty profound. >> guy, given what you heard from david about japan, are you more skeptical about ford and gm and their competitiveness against the japanese automakers. >> you have to be. >> yeah. >> it certainly appears as the dollar/yen son a trajectory to go north of 105. >> what the japthe japanese aut say we produce the cars here in the united states. >> they might say that. the stocks indicate they're trading in lockstep, specifically toyota motor, i don't know if we have the chart or not. if you look, it's effectively a dollar/yen chart. if toyota does nothing, if they just move sideways in an environment where their currency is weakening, that stock will go higher and potentially to the

detriment of gm and ford. out of all the plays we mentioned here, if you do believe the dollar/yen continues that move, i think toyota is very interesting here. >> before you go, david, i have to ask you about housing. you do believe a recovery is in play, as you stated. but the housing stocks themselves are a little bit overvalue at this point. they've seen massive runs. >> they've seen massive runs. you know, they're trading at the better times two times book value at this point. and so that doesn't strike me as undiscovered by any stretch of the imagination. i guess i'd be interested in the suppliers to housing much more than i would be in the housing manufacturers themselves at this point. >> okay, david, we hope you'll come back to facet 5 some time soon. it was a pleasure having you with us. >> thank you. >> david gerstenhaber. still to come, a tech titan and and entertainment powerhouse. they battle it out in our right to play for the championship game.

but first, wound telephone top financial advisers in the country is here with an underplay that could put your portfolio in a sweet spot for years to come. gregg fisher of gerstein fisher will reveal what it is right after this. "fast money" means best trading. everybody has to bring their best information each and every night. the entire trading day is the preparation for the show that night. >> it's idea generation. it's all about giving you a framework for how to look at the market. the world has changed, our show has evolved. i am guy adami. i am "fast money." >> i am pete najarian. i am "fast money." >> you "fast money"? go to the nbcuniversal store and order your "fast money" tee. run with the big dogs. you've known? oldest n we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need

to enjoy all of these years. ♪ transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business.

welcome back to "fast money." brian shactman here. sheldon edlesman has been on the stand today in a $328 million lawsuit against him brought by richard suin. basically, it says -- and you're looking at mr. adelson coming into court. he was also assisted to the stand. mr. suin said that he and his business were promised $5

million and 2% of macau casino profits in exchange for helping las vegas sands get into macau where they have four casinos now. i can tell you he could not remember on the stand the number of casinos he had. he could not recall if macau is a majority of las vegas sands revenue, and he also could not recall a lot of his details with the early relationship with richard suin. but there is drama in court today because he started introducing evidence from brochures that were not on the evidentiary list there was a motion for mistrial which was denied. they had a motion for mistrial and it was denied. i'm not sure if he will retake the stand for the day. back to you. >> all right. brian shactman, thank you so much for that. big mover today, josh, what are you watching? >> yeah, facebook enjoying a pop today. closed up some 3%, unveiling new software for android devices which will be integrated with google's android operating system. facebook also revealed htc

first. that's the firsthand set that will come preinstalled with the software. melissa, back to you. >> all right, thank you very much, josh lipton. dr. j, what did you make of this big move in facebook and what they actually unveiled today? >> i was delighted as i think any facebook shareholder would be. i was not a shareholder when they made the announcement. but i was delighted that it wasn't a phone, melissa, that it indeed software. and i think the fact that it didn't ramp up at all. in fact, for the past few weeks really has sold off down to the 26 level or whatever, i think is part of the reason why you got that 80-cent pop today. >> grasso you would sell that 307, right? >> i would sell it. i understand why they did it they want to help monetize mobile. but i'm not sure it's anything further than a one-day pop or maybe a three-day pop. in technicals you want to give it a three-day breather. wait a couple of days, see where it peters out. but i would be a seller on strength of facebook. >> how should you position your portfolio for the long-term? let's bring in gregg fisher, the founder and ceo of investment

management, an advisory vermont, gear steen fisher. great to have you with us. i'm sure a lot of people are struggling with. this let's deal with the person we're constructing this portfolio today. that is a 40-year-old with moderate risk tolerance here. >> sure. well, i think i can imagine right now what any 40-year-old might be thinking is we have just seen 8,000 points in the dow. i finally have some money to invest. should i plunge into the equity markets and take risk. let's think about it. if this 40-year-old saving for retirement, they have maybe 20, 25 years until they retire, hopefully another 30 years of retirement, they have a 50 years time horizon. mostsly be invested in riskier assets. in our opinion, a fixed number allocation wouldn't make se i would strongly recommend before they do that they have at least two years of cash reserves in the bank so they can take this long-term view we all talk about. >> in cash reserves meaning every living expense? so your mortgage, your car

payments, insurance, things like that? >> yeah. i think it's really important that investors have about two years worth of those core living expenses in liquidity, because in order to get through this long-term volatility we see in markets over periods of time that. >> need to have that reserve in place so they don't sell at a bad time. >> ainge lot of people out there are thinking that's a lot of cash to sort of amass and put into a bank account. so at what point do you say you know what? i have to do that first before i go into equity, because really, time is on your side. you want to start investing earlier as opposed to later. so how do you weigh those things? >> too much of anything is tao no good. i think that someone could consider some small amount of dollar cost averaging into the equity markets along the way. but i think this cash reserve is really critical, and will making sure that the same investor doesn't have a lot of debt. before they start investing long-term in volatile assets, they really have to have that in place. we've seen this time and time again. the number one reason investors don't have a successful outcome is they sell at a bad time. >> let's talk about your under the radar play. and that's global real estate. why? and how do you do that? >> there is more of an ability

to invest in real estate mobley than there was five or ten years ago. markets are backing more liquid and more available there are a number of ways that could be done there are mutual fund out there. there are etfs to really invest in the global real estate markets through reits. now one of our observations is that most investors don't have much international real estate. if you look at the mutual fund universe as the aggregate of all investors that we can observe, there is only about 3% of all equity assets in real estate or real estate securities, which tells us that the majorities of investors have a very small percentage of the portfolios in the asset class. >> when we take a look at these asset allocations, stocks, what does that mean? boil it down for us. >> we think about diversification. you want to find assets that move differently with the rest of your portfolio. if you buy real estate in two different country, it's going to have a better relationship than if you buy big stock across two different countries. by bringing global real estate into your portfolio, you should increase the return and reduce

the risk of your total portfolio more than you be adding more stocks. >> gregg, thank you so much for joining us. we appreciate it. >> thank you very much. >> gregg fisher of gerstein fisher. more "fast money" straight ahead. ♪ ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪

welcome back to "fast money." we are live at the nasdaq markets outside of new york city's times square. wild day for jcpenney. shares spiked 5% midday after the company was upgraded by gifford securities. but often traders not convinced. mike, what did you see today? >> what we saw actually was one institutional trader buying the may 12 puts. this is interesting because those expire in only 44 days. and for those to be in the money, spending about 40 cents for those things, it's going to have to go $11.60 by may expiration which is a decline of more than 20% of where it is right now. the puts are higher than the amount of calls and only a little lower than it was before march expiration. in general, options traders are positioned fairly bearishly on jcpenney still. >> what is your take on jcpenney's launch of the home goods stores tomorrow?

>> i think it's fairly important for them. but we don't know what is going to happen with mayes macy's and martha stewart. i think next week the trial may resume. that's a big question mark. >> if they lose martha stewart, does that make mr. johnson's job even more tenuous? >> i have to think so. >> yeah. >> he spent money buying their stock and positioning them. it seems tenuous already, actually. >> pops and drops, big movers of the session. we kick it off as a pop for macy's, up 2%, karen. >> on the flip side. what an outstanding company this is. i don't know why it was up necessarily today. but even here not expensive. >> terra data down 7%. >> morgan stanley took it off their best ideas list. awful now for a while. traded 17 times normal value. they're no one-day event. but for the first time in a while it might be interesting in the next couple days. drop in pioneer natural resource. >> both getting cracked today.

it's the 130th most shorted stock in the s&p 500. and those shorts were feasting on it today, down like you say about 3%. >> pop here for valero, up 2%. grasso? >> panda. just kidding. a bunch of headwinds. ethanol credits, sulfur parts per million, the wti brent spread has been coming in. i sold the name. i think it's out of gas right now. >> netflix the move 2%, a drop. mike khouw? >> they're debuting arrested development. the stock has also been arrested here. miking pachter is reaffirming his sale. obviously substantially lower. news that carl icahn hadn't been pairing his position yesterday which we had already covered. obviously not enough to support it. i would absolutely stay away from this. >> and a drop here for mexican beer, a fiesta was brewing in mexico earlier this week when a truck filled with beer tipped over on a highway. within minutes, the scene was buzzing with beer drinkers, brandishing backpacks, bags,

shopping carts to haul away the spilled cerveza. luckily no injuries reported in the crash. >> look at that. it's crazy. lights like a flash mob. how did they find out about it so fast? >> twitter! i have no idea. all right. coming up next on "fast," stockton, chasm, already on its way to bankruptcy. could more u.s. cities be doomed to the same thing? we're taking a deeper diver into the fiscal health of america's towns and states with blackrock's peter hayes. stay with us. ♪ [ 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.

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and we are sharper. ten-year treasury nearing the lowest levels since last december, falling below 1.% today. how low can yields go? what are your best income bets right now? let's take a deeper dive with peter hayes. blackrock has $1.2 trillion of fixed income assets under management. great to have you with us. >> nice to be here. >> so in terms of yields, where do you seep them heading this year? >> it seems like the yields, i mean, a lot of rhetoric for several months now has been yields going higher. and we started to test that but every time that ten-year treasury gets to 210, something happens.

the european situation hasn't gone away. you see cyprus reared its ugly head, flight to quality. north korean situation, flight to quality, and now the japanese move last night was a very, very big deal for the fixed income market. so it's likely that rates stay range-bound. it's hard to believe there is enough growth or inflation in the pipeline to see those yields spike significantly higher. i think if we can get out of some of these situations that we're facing right now, rates go perhaps a mildly higher, but i think 2, 2 1/4 is probably top of the range. >> we have you on to talk about muni bonds, but obviously we would love to get your take on what has happened in japan and how you think that will ultimately impact the fixed income markets at large, not just in japan, obviously. >> well, it gives more credence to the argument that central banks around the world are making it very easy to buy risk assets, easy money. the fed is doing it. europe is doing it. now japan has jumped on board in a very, very big way. when you put in the context of what the u.s. is doing because of the size of their bond market and their gdp, et cetera, it's a

significant amount of money. almost about $195 billion a month, compared to what we're doing here in the u.s. so they're making a very big bet, trying to create inflationary expectations, something they've been trying to do for a while. we'll see if it's successful. but in a world where there is less and less fixed income assets to invest, it really makes a big deal. >> so let's talk about the fed real quick. i'm of the belief that deflation is the real fear here. is it -- could we go down the deflation road, sore that off the table? >> i think the fed was very worried about deflation for quite some time. and i still think in the back of their mind they are, which is why they are reluctant to take off qe. but i think there is probably less of a risk of deflation today than there was two years ago. >> let's talk munies. stockton. are we going to see more stocktons happen? >> in california, you may see more stocktons. but i think it's important to realize it's not really indicative of the broader market because there in many cases states intervene very

proactively. see what happens in michigan and in rhode island, other states have very strong fiscal oversight programs. california does not. i think what is going to be telling here is not only how much pain will bondholders have to bear, but what will ultimately happen with calpers. if calperss are has to share in the pain, you may see other municipalities line up. at that point i think california has to introduce legislation which easier makes it easier for them to intervene prior to bankruptcy or makes it harder for municipalities to enter bankruptcy. you may see a few more, not necessarily widespread, though. >> so stockton in particular, where were the bonds two months ago and where are they now this would you buy them now? what kind of recovery do you think you can get? >> first, in the context of a very large market, 3.7 trillion. they have about 850 million outstanding in debt. but there is a lot of different types of debt. really what they're targeting is the pension obligation funds. so those have taken the biggest hit. they're trading at a distressed level. significantly off from where they were. even several days ago.

but remember, a lot of this news has come on the installment plan. this is something that has been evolving over a period of time. the market has seen it coming. the price discovery wasn't one dacht it's taken place really over the course of the year. and then they have other types of debt outstanding that has been slightly less impacted since clearly the pension obligation bonds are the ones being impacted. >> peter, thanks for coming by. we appreciate it. >> thank you. >> peter hayes. remember we started with 64 stocks in four regions. we're down to the last four names standing. and tonight we'll determine the first of two stocks that will move on to the next round to compete in our championship game. the matchup comes between the number one seed from the technology region that is google. and the cinderella story so far in the tournament, the number five seed from the health and home region, disney. so we now turn to the traders for this matchup. guy? >> google. and you know, i understand that google you're going to see 30 and $40 price swings probably against you over the next couple of months. but over time, google wins. and i think they're still in the

sweet spot for their business. i love disney. i think disney might be pushing up. it's getting a little extended valuation. it might be stretched. google i think is going to be volatile over the next few months, i think the direction is still as dennis says from the lower left to the upper right. >> karen? >> i long them both. so my biggest -- to be the biggest attraction about google is i feel like it's apple in its more beloved phase, which makes me less comfortable. it was replaced apple as the number one holding. and disney is slowly chugging along and doing a great job. and i long them both. but i would go with disney. >> have you trimmed google because you're scared that it is the an until the beloved prefall phase? >> i have added puts. so if it goes down. >> i sold my google earlier this week, but i'm looking for a point to buy it back. if i had a matchup here, levee the content. >> you do have a matchup here. >> i know. you do have to pick one. >> wow. this is a great segment.

i got to tell you, when we first started this whole little segment, i picked google to win it all. maybe pat me on the back, maybe something? i go with google. go, john! you have to do this. >> i'm going to go with panda. >> i like the panda. >> i like google as well. and i like google because it broke down through the 50 day to day. and people might say why do you like a stock when it breaks through the 50? because i don't think it stay there's. i think it gets right back above there. i'm looking for a 48-hour trade below the 50. if we got that 795 area or so, grasso, then i would sour on the stock. but i don't think we will. i think it goes right back up. >> all right. the trader here is on this desk have chosen google. but for kicks, let's see how the viewers. >> yes, exactly. >> all picked disney. we'll see here. >> that was me tweeting and tweeting and tweeting. >> the simple bracket of all the stocks, our "fast money" money competition. and remember, you can still get

in on the game by tweeting us at cnbcfastmoney. tell us what you're picking. there will never be any ties because, remember, you are the fifth trader. >> they're the fifth trader. >> and tomorrow, tomorrow is very important. tomorrow we'll determine the final name that will compete for the championship. so good one. >> stay tuned. >> stay tuned, as they say. >> or tune in. or do something. >> coming up next, we've got the trades off your tweets. we'll hit the twitter sphere to answer some of your burning questions. stick with us. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros

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you tweet it. >> we trade it. let's get to some of your tweets. doc, this one is for you. >> okay. >> up, down -- up day or down? caterpillar still not getting any love. what needs to change. >> it got a little bit of love today, though. each with the yen falling apart, and this a construction play, it's also a power play. aged a mining play. i like it down here around these levels. i still think it might trade to 80, melissa. so in other words, $4 under

where it is right now. but i like it. >> all right. grasso, does impressive reversal in gold miners like barrick gold to the green indicate a gold bottom if there is lackluster job support tomorrow? >> i don't think you're going to see a gold bottom here, but thing is always a place in your portfolio for some gold. i still own the gdx. i'm still staying long in that because i want a portion in my portfolio to have exposure to it. >> all right. karen, this one is for you. bought tkr, timken yesterday on the dip. are you adding here? >> i am not adding here. i'm definitely not selling. i think it's coming a little with the market, but also with relational being now. actually, it's timken on the aggressive front saying don't vote with relational. i am voting with relational. i like the story here. i hang on to it. >> and this is for guy. >> hi. >> hi. first red hat and now f5. why not priceline next? $100 in cash, but investors don't seem to care. they don't pay a dividend. why not an apple fall? >> nate. can i call you nate? >> go ahead.

>> i'm trying to figure out red hat, f high pressure 5 and priceline, what the similarities are. >> it makes my head spin. >> as does mine. >> we were just talking about it. priceline is not rich valuation wise. 16, 16 times earnings. it's a great story. i think ubs just initiated with an $825 price target. i don't see getting short priceline any time soon. i think that's been the bane of short sellers existence. i think it will continue to be for quite some time. does that help? >> i hope so. we'll come right a back. stay tuned. everyone's retirement dream is different;

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or just go to e-trade and save it. boom. ♪ time for the final trade. go around the horn. mike khouw? >> to be long japanese equities, but hedged on the end, use dxj on the long side. >> dr. j? >> julio cesar at the met tonight. no. network security company fortinet. >> grasso? >> a weakness in google. i want to see it around 780ish. >> karen? >> i bought some citigroup today. >> ooh. >> which doesn't, you know, mean i'm breaking up with --