line. these guys are being careful. probably not a bad idea for all investors. it's just not the back up the truck. "fast money" begins right now. stay with cnbc. have a good night. live from the nasdaq market site in new york city's times square, i'm melissa lee. here's what "fast" is following tonight. about-face. can facebook get back above its ipo price? we're getting updates from the call. in distress. if you listened to cole, you would have avoided a falling knife. wilbur ross joins us again with his top trades. and a stake in steak. an analyst who says fine dining is a perfect order for your portfolio. find out what stock he rates a strong buy later on in the show. we're back on the post-game analysis and set up for tomorrow with anthony, steven grasso, karen finerman, guy adami and

mike coast. let's get straight to today's action. so far the sell in may strategy seems to be working. cyclicals, energy, materials leading declines today. is a rally in jeopardy as job growth seems to be slowing here? we've got our eye on troublesome moves that could, in fact, be can na canaries in the coal mine. we noticed this early, but we saw small caps, transports, copper, the ten-year yield hitting an annual low here. steve grasso, what do you make of it? >> it makes sense. we started a new month, they ran them up in april. i'm tired of hearing about the may effect. january and february, on average, those months are terrible months for the market as well. we didn't see that this year. so i don't think we're going to see it in 2013. having said all that, the fed was in clear sight. that's what the market was waiting for today. >> how do you put this all together along with what the fed said today, anthony? >> so i'll take the other side. >> you are on my other side.

>> thank god i'm on your left side, not your right side. i would say that you're going to see some technical selling here like we did last year. and for those of you that were in the markets last year, may was down about 5.5%. and i do think that that does happen. there is some seasonality to this stuff. >> you buy into sell in may? if it didn't rhyme, we probably wouldn't be chanting it over and over again. >> yes. we're only back to where we were two, three days ago. april had such a strong last half. i don't know. i sold a little bit of cvs, but that was very specific to cvs and not so much a market call. great company, good earnings, but it's no longer what you would call value. so i didn't do a lot of thinking oh, this is it. the story's over. the fed, i thought, was rather uneventful. >> yeah. i mean, if anybody thought anything would be different from what the fed actually gave us, that's probably would be a surprise in and of itself, guy. >> hi. >> hi. >> bear with me here. >> oh, what are we in for? >> i watched the season finale

of "following." >> i love "the following." >> love that show. >> so the protagonist which is kevin bacon tells the antagonist whose name escapes me, you can't be this predictable. see where i'm going with this? for this to be the top is way too predictable. it's way too predictable to say. 15, 20 to me is the line in the sand in the s&p. i know we're 60 or so points away. that's when i get worried. until then, i think we're still all right. >> i'm keeping it a lot tighter than guy. guy gives it a lot more flexibility. 1576, that's your old high. below that, there's an area of 1556. that's where i start to get worried. other than that, i think we're going to 1625. how about that? >> how about that? >> quickly. quickly. >> let's get to our top trades for today. anthony, what were you doing? what did you see happening? >> well, i think you buy -- guy and i can fight about this if we want, but i think you br buy

ripped off your facebook. i think at the end of the day, it still looks like an early-stage goinogle. i think there is an issue as it relates to the management team. but you would buy something like this on weakness. >> but you still like google? >> i do. i think it's a terrific company. when they launch the new phone, i think it's going to be damaging to the apple franchise for the younger people. >> grasso. >> i'm long apple, i'm long google. there's so many reasons to buy google. you can buy facebook, a very small percentage of your portfolio because no one knows what facebook is. it hasn't really proven anything to us. google has. and it continues to do so. >> guy. >> i can see the fast fire coming. >> why? >> the good, the bad or the ugly. but linkedin was up today. they report tomorrow after the bell. i think linkedin is going to surprise some people to the upside. >> why bother? why would you bother going into

linkedin? is it too predictable? >> because that's the game we play. that's the game we play. >> let's talk about facebook here because we are watching it move a little in the after-hours session. q1 earnings in line with expectations. reporting eps 12 cents revenues beating slightly at $1.5 billion. in terms of you think that this is an early stage. why would you say this is the time to get in? >> you know, again, this has to do -- it's an execution story. the big what-if for facebook is can this management team execute on the franchise that they have, deliver in the advertising without upsetting the quote, unquote, free customer base. google was certainly very successful at doing that. and i think that they can do that. instagr instagram, ask your kids about instagram. that's the go-to place on facebook now as it relates to a destination. so yes, it's a high valuation, but so was google back in the early days. >> mike, what do the options market expect in terms an

implied move on the earnings? >> well, it was pretty much, you know, expecting a much bigger move, it would be safe to say, if it's not moving at all. you know, what we've seen typically in the past, you know, the first couple earnings we saw very big moves. of course, the last one not so much. we saw basically a blended average of expectations looking at about 6%, 7%. you know, i think it's a little bit much to expect that. there was a lot -- there was a lot of stock moving around. when you see that, that means that a lot of buyers and sellers are finding each other. i would have been surprised if it had beaten the implied move. >> mel said this in the green room. if you had told me their average mobile users would be up 54% year on year, and revenue in line, i would have said you had given away the stock that sold off over the last few months, we'd be either side of 30 bucks right here. and the stock's unchanged which leads me to believe maybe it's not -- maybe not as many bulls out there on facebook as i originally thought. >> let's get a shareholder's take. joining us on the fast line is channing smith, portfolio

manager of the capital advisers growth fund. channing, great to have you with us. >> good to be here. >> in terms of the quarter, it seems like a real breakthrough for facebook. is the move the percentage as a percent of total revenues as well as the users on mobile. what did you like out of this quarter? >> yeah, that's where, you know, looking at the earnings report, that's where everyone was squarely focused. they delivered on revenues. in the mobile space. it was 30% of advertising which is about $375 million. and that's on the higher end of the range that analysts were expecting. also, you know, guy hit 751 million mobile users. that's an enormous number. we like the numbers. we're focused on the revenues. i agree with tony and steve. this is an emerging franchise company. companies like facebook have a novel business model. they're not proven, and they could ultimately fail. so you have to be very careful here. there can be a wide, you know, range of possible outcomes. we're less concerned about what revenues and earnings are going

to be. analysts have a tough time establishing, you know, looking at what can this model do? because there's really no established business model. and so it's hard to get a fair valuation. we would say for the 1.5% position, this could be the next google and could be the next apple. what i think that we're excited about and what we didn't see last may was management is finally introduced some initiatives, you know, to monetize the asset. and we're starting to see that. will it happen? is it still a work in progress? but the groundwork is laid for this to potentially be the next google or apple but there's a long way to go there. >> you recently added a small position in facebook. does this quarter -- does this report make you inclined to add to that position? >> not really, no. i mean, i think the expectations were met. obviously, we're going to want to listen to the call. the numbers were impressive. we don't know what's going to happen here. can they keep this momentum up with the existing initiatives? can they monetize instagram? keep their users in the

ecosystem? this is something that's going to have to be proven over time. but the sheer opportunity here of 751 million users over 1 billion monthly users, you have to respect the ecosystem. and you have to at least have a chip on the stock just in case they can monetize this. because this company could easily be a double or triple, you know, going forward. if they can execute on the strategy, and that's a big if right now. we still need to see more evidence. >> channing, thanks for joining us. we appreciate it, channing smith of capital advisors growth fund. let's check on other after-hours movers because they are moving right now on earnings. cvs first quarter beat on both top and bottom lines. meantime, caesar's entertainment. take a look, getting hit hard on earnings reported loss of $174 a share. they expected a loss of just $1.46. caesar's also missed on revenue. and yelp, earnings winner. the social media site surging on higher than expected guide aean

for the second quarter. next, a meal ticket for investors. a key upgrade today. why he thinks the stock is a great value. copper sinks to near two-year lows. commodities king dennis gartman to find out what the activity is really telling us. and later on, he made one of the best trades in the pa s year. fi where wilbur ross is making trades. i've always kept my eye on her... but with so much health care noise,

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after-hours action on visa. josh. >> melissa, visa higher in the after hours here. profit best estimates, revenue rises 15% to $2.96 billion. that was also better than expected. that was in contrast, by the way, to mastercard this morning which reported and missed top-line expectations. also raised its adjusted earnings growth forecast for the year. and on the conference call, mary thompson reporting a turn in the debit business back to growth. it had been contracting recently. visa higher in the after hours. back to you. >> thank you very much, josh lipt lipton. guy, this is one of those names people might have said the valuation is too high and keeps

hitting all-time highs. why should i get in at this point? >> obviously visa s o on mastercard. mastercard was down big, and that quarter was in line. but the visa quarter, was fantastic and so was the commentary. people have tried to shoot against these names for a long time on valuation, it's been the wrong thing to do. finally maybe we're seeing separation from visa and mastercard. i'm not certain that will last, but i still like them both here. >> i like these. i think mastercard which i've owned for a long time, the commentary about global growth is disappointing, but the valuation which normally this would seem expensive for me, i love these recurring revenue, these transactions, billions of them, those deserve a decent multiple. i still like them. >> this is one of our favorite stories of the day, i think. jc penney -- >> recently jc penney changed.

some changes you liked, and some you didn't. but what matters with mistakes is what we learn. we learned a very simple thing. to listen to you. hear what you need to make your life more beautiful. come back to jc penney. we heard you. now we'd love to see you. >> that does it, then, right? that's cool. everything's back to normal? >> you'll get your coupons in the mail. you'll come back in, grasso, to buy your sensible slacks and you'll be happy again. >> dry your eyes there, steve. >> i got a little choked up. >> did that not convince you? >> i thought it was a "saturday night live" ad. it's just not -- >> i'm glad grasso and i are sitting on the same side because i'll take the other side. i thought that was fantastic. i think that plays unbelievably well in middle america. >> and you know that how? >> i travel all over middle america selling our products.

what are you talking about? iowa, omaha, nebraska, you know i've been out there to see you guys. don't listen to these northeasterners. that's great. i hope you go back to jc penney just because they're trying. >> you thought it was lame. >> i thought it was kind of lame, but i actually don't think -- we look at things as a stockholder. i don't think it makes much difference. >> you don't think it's going to get the customer back in to spend? >> i love the domino's pizza ad where they had people saying our pizza's terrible. it sucks. they said all right, we heard you. this was way short of that. but i don't think -- >> where do you get to with jc penney when you say some of the parts? when you analyze it, get to a level where shorts are scrambling to cover -- >> they already have financing in place right now. >> you can't get in front of this. my point is you can't sell it anymore. >> is it off the table at my point? >> that's my point. you can't sell it anymore. >> i still think the valuation's very expensive. you know, i wouldn't jump in and short it here. i still have a small short

position left for no great reason, to be honest. it's still very expensive. >> this is an expectation game on stock market investing as well as a fundamental game. and the expectations are completely out of the stock at this point, i think. it might be a tad expensive. >> i don't think the expectations are out of the stock. >> so you think the expectations are continued bearish. >> they think it's going to work. >> you think it's going to work? >> you think a turnaround is going to work. >> weigh in. >> reed hastings did a mea culpa and it went to 215. and it worked for them. i'm not saying jc penney's going to see that type of move, but i think the company is still broke and i think the stock is okay. it didn't trade awfully today. i like jc penney. you get one more of these 13 bs, gs, fs, hs with another one of these big-name guys coming in, and watch. >> but you know it's reversed all the soros pop. >> a little bit. >> and we still have the outcome of the macy's martha stewart. we'll see that. >> it's interesting. that's what makes markets.

should you take a stake in steak? stake in steak? it's up nearly 34%. joining us on the fast line is brian elliott, analyst who upgraded the stock today to a strong buy. good to have you with us. >> good afternoon. great to be here. >> what really jumped out at me was the free cash flow that it generates and how that picture has changed from last year to what you're expecting this year. what's driving that? >> well, it's the profitability of their restaurants and their high returns on capital. this is the highest margin, full-service, franchised restaurant company i've seen in 30 years of following restaurants. high teens ebitda margin, business is very profitable, management clearly does a great job of systems and controls and incentives and hiring and training and all of the things that the restaurant level, you know, create that. and they're sustaining it. so even growing the store base

at around 10% are able to generate free cash. >> let's talk about operating margins which you alluded to. is it sustainable? it seems to me in this business 11.5%ish operating margin seems pretty reasonable for them. is that sustainable, or can they build on that? >> there's no real barrier to margins if you grow faster than same-store costs, your margins are going to go up. you also will get some g&a leverage. this is still a relatively small company. quarter of a billion or so in sales, and they should be able to leverage their overhead as they get bigger. but the real determiner of profit is also sales per square foot. and they have among the highest sales per square foot of any public restaurant company out there as well. you know, think of restaurants like an airplane. it's seats and you pay for the seats up front. then the more people you get sitting in the seats, the better off you are once you get above break even, the marginal profit is very high on sales.

they're getting very good sales productivity. that's what's depriving te i dr margins. and it's working. we think it's absolutely sustainable. >> hi, it's karen. one last question for you. i think of the customer as maybe a wall street person on an expense account. is that the wrong way to think about it? because i would think that customer is starting to get pinched. >> no, there's -- well, i don't know. that customer is not showing evidence of getting pinched a whole lot here, actually. but there's really two core customers that they have. one is that business account -- business expense account, you know, client entertaining kind of t celebrating a deal. it's also a high-end leisure spend for affluent consumers as well, going out to a nice restaurant, getting a nice bottle of wine. you know, with your significant other or a group of friends as a component of consumer spending at the top of the income stream as well, and that's a meaningful portion of their customer base at del frisco's, and luxury

consumer spending continues to be quite strong. >> brian, great to speak with you. thank you. bryan elliott of raymond james. 1.5% was the gain on dfrg. you like the restaurant space, anthony? >> i actually do like the restaurant space. i do think that these petite luxuries are going to work very well in an environment like this. it's not buying the ranch, so to speak, but you can get a great meal and it's a high premium product. >> if you don't have the stomach for a volatility. >> stomach for the volatility in the restaurant name. >> can i get a rim shot here? you go with mcdonald's, 3% yield -- >> quite a different price point. is that where you take your clients? mcdonald's? >> i'm a reggae. i'm going to nebraska. >> jc penney and mcdonald's. >> i won't have the alligator shoes and limousine, though. >> it's the greatest part of this country. >> are you running for something? >> you want to know something?

>> don't listen to she's shady new yorkers. coming up next, after-hours action for the latest developments and billionaire investor wilbur ross calling for the death of coal on our air. >> the last time on the price of coal got down to $24, well below its reproduction value, i thought it was just cyclical. this time you have structural change. >> the major players in the coal industry plunging since those comments on our air back in july. find out where he is seeing new challenges as well as promise right now. be back right after this. "fast money" means trading. everybody's got 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

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welcome back to "fast money." i'm josh lipton. you can check out c-gate which is enjoying a pop here in the after hours. the hard disc drive maker. the ceo saying he sees fiscal fourth quarter revenue of 3.3 to $3.45 billion. the stock up about 4% in the after hours. up about 20% in the past 12 months. melissa, back to you. >> thank you very much, josh lipton. quite a climate since those thai floods had they were really sm stymied. >> this is an all-time high in the stock, with a dividend close to 4%, seemingly defy logic. and current valuation suggests that they continue to go higher. it only trades around 7, 7.5 times earnings. once again get squeezed and continue to see the stock

probably grind higher. they have not been commoditized. >> julia boorstin has been monitoring the call and joins us with the latest from l.a. julia. >> that's right, melissa. sheryl sandberg is speaking now. mark zuckerberg spoke earlier. both of them wasted no time to talk about the success of mobile and also the ongoing potential of mobile revenue for the company. zuckerberg said he's really excited about facebook home. that's the new app that they recently unveiled. he emphasized that it'till early days for the app, so not to be so concerned about some of the reviews that we've seen so far. now, sheryl sandberg said that her priorities for the company are mobile, measurement and innovation. both she and zuckerberg talked about the growth of new ads liked mobile app install ads, ads to try to convince people to download apps through facebook. sandberg also talked a lot about the ability to measure in-store behavior of its users based on

what ads they see. even if they don't click on them. measurement is a big priority there. now, the big headline of the earnings was that 30% of facebook's ad revenue now comes from mobile. that's higher than expected and also up from 23% in the fourth quarter. mobile monthly active users grew 54% to 751 million people. and the company now has 189 million people who use facebook every month only on their mobile devices. facebook earnings came in a penny lighter than expected at 12 cents per share. those right in line with year-ago numbers. revenue group up 38%, $1.46 billion. on the earnings call just a few minutes ago, david ereersman said there were a record number of people playing games on facebook. melissa, the real headline here is advertising, and the real emphasis on the earnings call is their focus on making those ads better and more effective. back over to you. >> thanks so much. we'll continue to get updates

throughout the hour. meantime, to copper, falling to a low in growth china. it could be slowing down. is the weakness the canary in the copper mine? let's welcome the commodities king, dennis gartman, editor of "the gartman letter." great to have you with us especially on a day like today. you have the china pmis. you also had factory order -- factory order data here in this country and manufacturing has slowed from march to april. and then you have inventories building as well. is copper headed lower here? >> well, no, copper's been heading lower for quite some long period of time already. this is not new news. inventories in shanghai, inventories in london, inventories in the comex has been going on for a while. dr. copper is sick. and what's sad is not only is

dr. copper sick, but so, too, is tin, aluminum, zinc. all of the base metals have been under pressure. and they don't argue for strong economic growth. i think they are starting to argue for very weak economic growth. i had been quite bullish of the economy here in the united states, but i think that the base metals markets are making me look at things from an economic perspective a tad more pessimistically than i might have a short while ago. the base metals do speak loudly and they're speaking very bearishly. >> dennis, we broaden it out to commodities and people say how beneficial it would be to the consumer. and i understand that to a point, but is a commodity move telling you -- does it portend a deflationary period? because if that is the case, then i believe we're potentially in for a world of hurt here. >> guy, i'm afraid that that's what the commodity markets are, indeed, telling us. gold turned over today and turned over badly. i think it's time to start selling gold after this very strong rally. crude oil started to move down

yesterday. and collapsed today. crude got down at one time, wti was down 350, brent was down 350. the best they could do was bounce back 75 cents from their lows. things start to look very ugly in the world of commodities. and i really do think that that portends ill for the domestic and for the global economy. >> but dennis, just for one second, do you think that this also means, then that the fed is going to continue its firepower through the end of the year and continue to floor risk-based asset prices with their strategy? >> well, i think clearly it's made it clear they have two mandates, one of the mandates is to keep inflation under control. and i think they're looking at commodity prices. and we'll say that clearly is under control. they look at unemployment and say they've got a problem here, and i suspect we're going to see very bad numbers on friday in the nonforeign payrolls. so yes, the fed has not changed at all.

i think the fact that in the only language change in the fomc communique this afternoon was that they added the word "increased" to what they might -- they may doing in the future and put increased first tells me that at worst they're going to hold steady and they may, in fact, even increase the amount of reserves. for stock buyers, that's your only hope at this point. >> got it. dennis, thank you. dennis gartman of the world-renowned "gartman letter." if you're bearish copper, does that necessarily mean you have to be bearish fcx? >> yes, you have to be. everyone uses that as a proxy. right or wrong, if you're bearish copper, you must be a seller of fcx. what's curious is if dennis is still positive here, does that trump asia? obviously, in his mind, it doesn't. but i think that's worth taking a look at. >> time for pops and drops. big movers of the session. a drop for spx. down 8%, karen. >> yeah, really disappointing earnings. they guided 50 cents lower this was a lot.

i don't think this was actually an overreaction in the stock. my one favorite thing about it, 9.9%, i believe. one to watch, don't jump in right away. >> pop for humana, up 4%. >> the stock popped a couple weeks ago based on rates for medicare advantage. they have huge exposure there. i would say you need to lock it in because it was a better than expected rate. it wasn't as bad. if you're lucky enough to still be riding it with this pop, take some profits. >> a drop for gld, down 1%. t anthony. >> the long story is still intact, the currencies erased to the bottom. you just heard from dennis gartman, it's going to be rough sledding here. the spector of the flation is still beyond global markets. >> down 9%. mike. >> they reported 9 krecents a share. the street was looking for 14 krs. on the conference call, a couple problems, one of them was the foodservice revenue, a grim

picture and the crane business in europe also fairly weak. in general, not a very good picture for the company. i think you'd still stay on the guidelines. >> allergan down 13%. guy. >> maker of botox not performing. it had a huge move from january giving a lot of it back. no one-day events here, traded 18 times normal volume. i think it goes down tomorrow bp but 23 it gets to 90, you buy this stock with both hands. >> a pop for squirrels. >> what? >> that's nuts. >> things were nuts at a college baseball game tuesday when a renegade rodent ran onto the diamond. play was called. eventually a player was able to scoop up the squirrel in his helmet, as you see there, and release him back into the wild. >> why do we like squirrels and don't like rats? >> it's packaging. >> it's all packaging. because thiey've got the long tail. >> i think the way it whoops up like that. next on "fast," billionaire

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welcome back to "fast." we are live at the nasdaq market site here in times square. josh lipton. >> melissa, we are watching jds the equipment maker. third quarter loss, talking about customers putting off orders which hit the top line. looking ahead, company seeing adjusted current quarter revenue between 420 and 440 million, not as good as the street wanted to see. shares rising after hours recovering from that selloff we saw today. melissa, back to you. >> thank you very much. our next guest is an investor best known for restructuring companies such as steel, energy and textiles. he was ahead of the curve on the decline for coal, and today he joins us with his next big idea. we're taking a deeper dive with wilbur ross. wilbur, always good to see you. >> good to be back. >> it's interesting what has changed since you made that call on this show back in july in terms of coal, is that some analysts have actually come out and upgraded their outlooks for

coal, citing specifically the rise we've seen in natural gas saying that at $4, we could start seeing switching back. do you see that there's a bottom, or are you still bearish on coal? >> i think it takes probably more than $4, maybe something closer to $5 before it happens because there is the cost of switching over. people have forward commitments, things like that. so i think at $5, there probably is a lot of switching. meanwhile, the main thing that's been good about coal has been the export market. because while natural gas is very cheap here, in europe, it's very expensive. so they're actually buying american coal and using it in europe to make electricity because the cheaper the natural gas there. natural gas in europe is $12, $13. >> so how does that weigh out? because of the switching's not there yet, but the export market is good. >> it terms of global pollution,

it doesn't do much good. what's the difference if it's burned in europe or here? >> that is the problem, though. i would look at this administration. they don't really believe in clean coal. if you were to invest in a coal company, you're obviously looking at therma coal versus mehmet lunm metallurgic. >> i think arch is a very good company. i haven't been following the coal stocks since we exited, so i don't want to pick a particular one. but i do think there's continuing danger from the administration in terms of more rules on coal. >> let me just play devil's advocate a little bit. you have some dynamics that actually seem to be setting up nicely. i think natural gas, i hear what you're saying, but i think a prolonged rise, not necessarily a $5 rise, but $4.30 for a while could be enough to start to see switching, and you've had inventories that have peaked. and you don't have new production. you have sort of the bare

minimum of maintenance production going on. so the supply/demand imbalance is starting to shift, i think. to me, those all set up with levered companies. that all sets up to be an interesting sort of turbocharged risk reward. >> well, in a sense, but why not just buy the natural gas producers? that extra 50 cents is all sheer profit to them as well. and they're generally pretty highly leveraged. so i don't know that you need to go through all the other complications of coal just to play a potential rise in natural gas. natural gas goes to 5 bucks and stays there, those stocks will be fine. >> wilbur, i want to get your thoughts on treasuries and the notion of a bond bubble. we saw ten-year yields hitting a new yearly low today. where are we on that? >> well, i believe that three years from now, we'll look back and say, my god, how could people have bought ten-year

treasuries at 1 something? you know, if the ten-year treasury goes back just to the average yield it had from 2000 through 2010, guess how much it goes down? 25%. so to get, what, 200 basis points for a year or so, why is it worth risking 25% down side? >> wilbur, do you think the federal reserve will hold those assets on their balance sheet? they've got about a $4 billion balance sheet now. why not just hold it to maturity and prevent a bond bubble from happening? >> well, i think they probably will hold it to maturity, at least some of it because in the old days, they used to regulate monetary policy by buying short-term paper. and that meant they could divest of it or just let it roll off and not worry about a loss. if they actively sell long-term bonds, they'll create the same loss for themselves. a 25% loss for them would give them a huge negative net worth.

so i don't think they'll do that. but remember, they've been withdrawing from the capital markets about the same amount of debt between mortgage and other, that the federal government's creating, around $1 trillion a year. just stopping that is going to change the dynamics. so it isn't that they have to blow out their whole position. i'd be very surprised if they did. if they did that and you had a sharp decline immediately, they'd get ahold of congress for two years. one, how they're operating at a big loss. and then two, why did they act precipitously? so i think they'll do it gradually. if i were they, i would gradually start, go down to 75 billion, go to 65, 55, phase it out because otherwise the trade of getting out of bonds is going to be an awfully crowded trade. >> right. >> and even worse is the high-yield part. high yields are around 570.

if you have 1.5 times interest coverage at 570, if those yields go back to 8.50, guess what? you have no coverage. so with the high yield, you have both the money market risk and the refinancing risk at maturity. >> wilbur, let me ask you about your next big idea because, of course, we want your next big investment idea. you like shippers at this point. >> yes, i do. >> what kinds of shippers and why? >> well, there's a very simple reason. it is supply/demand. ships are a strange kind of commodity because they're very lumpy, very big individual units. but they're commodities. rates have come down around 80%. and what's been causing that is a few years ago rates were extremely high. so then they overordered ships because wall street and the banks were throwing money at them. that stopped. they haven't been really ordering for a while. and now because of the low rates, there's a lot more scrappage. so i think in 2013, they'll start to come more into balance,

and you'll finally have recovery sometime in 2014. >> okay. wilbur, we're going to leave it there. always a pleasure to have you with us. >> good to be on. >> come back soon. wilbur ross of w.l. ross. karen, you have looked at the shipper trade. you were in it, are in it. >> i'm not sure if you're talking about vlccs, which are crude. i have nna which is mostly product tankers, chemical tankers. >> like the natural gas related for the same reason. eventually obama's going to give out some export permits, probably not all 16, but some. >> great. okay. i love that wilbur ross loves it. >> that's like a stamp of approval. >> yes, it is. it really is. >> our thanks to you. coming up next, compelling trading activity affecting one of the world's largest insurers less than 25 hours before earnings. and cnbc's jane wells knows when to hold them, knows when to fold them and she tried to do just that today online. jane. >> melissa, let's see if i can

figure out when to walk away and when to run. from moneyball to money pitt. we're going to talk about brad pitt because he's brad pitt, after the break. man: how did i get here? dumb luck? or good decisions? ones i've made. ones we've all made. about marriage. children. money. about tomorrow. here's to good decisions. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. ready to plan for your family's future? we'll help you get there.

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aig to report first quarter earnings tomorrow, and forecasting a sunny future for this company. mike, what did you see? >> it was interesting. we saw pretty good options buying today. one of the things we were looking at was the may 41 calls, these are the ones that actually expire two weeks from friday, not the weeklies. those were trading for about $1.50, and that suggests that options traders were betting the stock would be above $42.50 by the expiration of may which would be very close actually to the 52-week high of $42.66. maybe they're betting it breaks through that number. >> anthony, aig has been a hedge fund favorite of late. >> yeah, listen, i think aig is the execution story of the last 18 to 24 months. and i think they will continue to execute. and the main reason is they're in great businesses. and so i predict that this stock, by year end, could be as high as 15% higher than it is right now.

>> steven p. grasso. >> as you said, it's been a favorite and i see a lot more buyers. i don't see anyone getting in front of it wishing to take the bear case. definitely bull case. next from mobile phones to brad pitt. cnbc's jane wells tells us what is up in the west coast wrap and our gang tells you how to trade it. stay tuned. ♪ [ 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.

i wanted to talk about the apple bond offering because in case you are not following me on twitter, and you should @melissaleecnbc, wilbur ross was here. once we wrapped up, he said to us, this is what i should have said on air. he wanted to talk about the apple bond offering, that the size of the offering may have marked the top for the corporate bond market. of course, we had many, many companies come to the market recently, mcdonald's, ibm, with their own issues. he's saying now this could be the top. if companies are out there intending to issue debt, they should hurry up and do it right now. that was pretty shocking, karen. >> it was. when you look at some of those apple rates, when i did the

model about the buyback, i used 3% on ten-year paper just to be conservative. in fact, the biggest tranche is at 5.5 billion, i think, trading at 2.4. the five-year paper trading less than 1%. i mean, it's really hard to do better than that. >> they borrowed $17 billion, which is more than the entire company was worth 12 short years ago. and what we know about technology is that things are uncertain. so this was a magnificent time to get in there. if you're short that stock and you hear the buyback plus the new bond offering, i would get out of the way of this thing. >> all right. let's move on here. from medical devices to actually mobile devices to medical marijuana. west coast wrap. jane wells joins us from the west coast. >> that's what happens when you get on twitter. your mind gets all discombobulated. >> i was busy tweeting right now. >> twitter based on the west coast, we're going to move a little north from there.

west coast-based t-mobile u.s. was up on its first day of trading. of course, the company is a combination of deutsche telecom's t-mobile division and metro pcs. fourth largest wireless carrier. appealing to customers who pay in add answer or don't want to sign contracts. it's the first big deal to close and a lot of consolidation. stock's new ticker is tmus which melissa i thought at first was tums when you need in that business. >> grasso. >> i'm actually long sprint. obviously more competition in the space, the better to take on at&t and verizon. the smaller guys have their work cut out, but i'm long sprint. i think that's going to be the winner. >> what's up with the brady bunch thing here? when did we go to the brady lunch? >> look, alice. >> sorry about that. >> i don't like my lighting. >> okay, las vegas sands today reported record quarterly earnings. beat the street at the same time nevada's first online poker site for money launched ultimatepoker.com is owned by station casinos.

it's helping nevada be a first mover here. currently only nevada residents can play. really? well, i downloaded the software, but it would not let me access the server. so maybe it does know. >> mccown numbers have been great, obviously online, that's where the focus is. but the two winners in this space wynn, w-y-n-n, and las vegas sands, either one. >> real quickly, this clip is brad pitt. >> how do we know they're coming? >> they're coming. ready? >> oh, my gosh. he's so gorgeous. "vanity fair" reports the zombie epic "world war z" desperated for june may be a big pile of "walking dead." they had to reshoot the last 40 minutes and the budget is between $200 million. it's his film with paramount. >> i always thought guy looked like his brother, stu. stu pitt. >> awful. thank you, jane. >> and you're proud of yourself over that. >> you're laughing at yourself.

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"final trade," grasso. >> eqtp. >> short gold. >> long aig. >> garden. >> i'm melissa lee. thanks for watching. see you tomorrow 5:00. don't go anywhere. "mad money with jim cramer" starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to cramerica. other people want to make friends. i'm just trying to save you a little money. my job is not just to entertain you but to educate you, so call me. i got a news flash for you. the market is allowed to go down. it's allowed to repeal gains faster than those gains were put on. that's okay. as we saw today with the dow