e her and i started the launch by meeting her and all the stores across the country. so i think we started our launch in the right way. i started my relationship in the right way. >> congrats on 30 years. >> thank you for having me. >> thank you for coming by. >> it's a great place to celebrate. >> the one and only jaclyn smith. >> bill, that does it for us on closing bell. nice way to end it. >> we'll see you tomorrow. "fast money" is coming up. >> "fast money" starts right now. we are live from the nasdaq market site overlooking new york's times square. i'm maggie drury. i'm sitting in for melissa lee. our traders are tim senor karen needer man. let's get to it. tesla hired an earnings beat. we are covering all the tesla after hours actions. phil lebeau and rob callow are here to weigh in on the latest

headlines from ceo elon musk. plus, fed chair janet yellen sounding the alarm on equities. it's a contrary sign to buy stocks. first, we begin with the selloff on the street. the dow sliding as much as 195 points in late day trade giving back almost all of its gains for the year. this as rates and oil continue to climb. well, the question is it's been over 1,066 days we've been counting, right, guys since our last market correction. are we finally witnessing the start of one now? well, pete i'm going to kick it off with you. what do you think? could this turn into something bigger? >> it certainly could. i'm not going to say it's not going to happen. we get up towards 15 and last week we got over the 50 day moving average on the volatility moving average. we are extremely low. that's not signifying to me. they're expecting that 15 where we close implies basically a 1% move. we got a 1/2% move out of the s&p 500. i would say you could still own

the volatility right now. own it through the spider push for the down side to protect your portfolio. that way you can still be involved in the market. if we don't get the correction a lot of people are calling for right now, you can stay in the market and hold on. >> tim, what do you think? speaking of 50 the s&p went through the 50. we drew our lines in the sand last friday. this is a case where do you think the market can go? if you think this is the unwind of qe trades there's a lot of room here. think about what's happened here. it's hard to know which is the tail and which is the dog. higher oil prices bring up inflation exaggerateing moving up in bond yields. puts more pressure back on the ecb to go into qe. think of what's happened the euro strengthens. everything they're trying to do is going up in their face. can you control the bond market. the bond market will lead you in the direction i think equities should go. >> do you think the yellen comments maybe spooked the markets somewhat? the other question is whether or

not she should have been there deliberately jawboning the market. do you think that contributed to the slide, dan? >> i think it probably contributed for a short period of time. i think in general market participants discount what a fed chair is going to say when it relates to valuations of equities. a point tim made that is important, when you think about what we've seen, the volatility in asset classes around the world, look at what the fed unwind really meant since they stopped their qe it really meant the commodity volatility it meant currency volatility. it's meant fixed income volatility. the one risk asset that has not moved has been equities. when you look at the s&p 500 or at least in the u.s., it is 2% from the all-time highs late last month. if you're talking about the potential of correction i would say if we get data on friday and this jobs number that signifies that the fed may move quicker than people think, then you will have equity selloff. it's that simple. do we go down to 10%? i don't know. we have some levels here.

i know people are focused at 20 30 in the s&p 500 and then 2,000. >> you think despite a selloff in bond yields that we had that going into tomorrow people are possibly positioned where they could be the wrong way on a strong number? >> you could be the wrong way because we've had such a move in front of it. when you think about the move in yields in such a period of time with the back drop of weak economic data in the u.s. over the last month. >> feels like we're suffering from a case of indigestion with the higher rates. what do you think, karen? >> we are starting to see potential inflationary pressures. if you see the move in oil, a touch of low of 42 to 62 today. >> wasn't inflationary last year when it was above 100. >> there was more slack in the economy i think last year. i think you're starting to see commodities move. what i did today, we don't trade around the market that much. what i did is we are always long some sort of hedge. long one of the big s&p points. i sold lower strike puts against it. i don't want to be naked short puts but i think the volatility

gets high. we've seen a pretty sharp selloff in the last few days. i wouldn't be surprised if it bounces back. >> the equities stretching into the etfs like the spider today, two to one of the puts versus the calls. there was a little bit. i wouldn't call it anything close to a panic. we got over 16. we're talking about 12 last week. it doesn't sound like a huge move. that's a pretty rapid move to the up side. quad qs, the same type of thing. there fs a little bit of a move mandy, where people were starting to feel a little bit uneasy how the market traded yesterday following it up again today even when we got up towards flat, they were still coming and trying to acquire some down side protection. >> certainly a lot of unease out there. tesla, those shares are ranging higher when the company got better than expected earnings for the first quarter. let's bring in ben callow who has an out perform rating and a $275 price tag on the stock. after you saw the earnings are you feeling even more bullish on

the stock, ben? >> yeah. we recommended owning the shares into the print even though the stock has had a nice run. our thesis was that people had gotten way too bearish around the quarter and we want to observe the stock into the x launch. the quarter came out better than expected despite foreign currency head winds. tesla managed to hit their gross margin target which helped on the bottom line beetd so looking ahead they reaffirmed their 55,000 card delivery target for the year which is good and then the model x in q 3 we want to own it into that. i don't want to be short ahead of it. >> ben, do you think people maybe now with some reaffirmation of the production levels that they gave you in 55,000 still seems on track, do you start to move the valuation? where do you start to move your valuation to look at stationary storage. this is something i have to say for someone who's been a little bit -- i've been negative on the valuation of the stock, not on

the company and i think this gives you another place where people can say, you know what it could be anything. i'm holding my finger up in the air waiting for the wind to blow it. because i think this is where we've gotten with tesla. i think a lot of analysts you've made a great call on this. the recovery in the production cycle is validation. there's a lot more room if people can quantify at stationary storage. >> it's a great point. we saw a few weeks ago when we were at the lows of very low is an understatement. people just were thinking about, you know a few weeks in advance. i think with this quarter showing better than expected results getting production back on track, actually have some cars in transit that will help smooth out into q 2 that you can start to think about the future again. we've got the x ahead of us. stationary storage announcement that we just had. people will start building those numbers into their models. we don't include any revenue or

earnings from stationary storage and we'll learn more about that on the call today about how big that can be and how near term of an opportunity. what we heard on solar city's call last night is the uptick so far on the residential side has been pretty huge so we'll wait for the call to hear more about that. >> right. >> definitely bullish on that. >> we'll certainly check in with you on that. ben, hold that thought. let's trade it on the desk. what are you doing, tim? >> i'm a bit skeptical. the product is amazing. this power wall is remotely close to the quality of the model s then they're going to have a hit on their hands, but that's years out. they're talking about production in 2016. so to me what is most interesting about the story, it's kind of tim's finger in the air sort of thing, when they get to mass market products. that's a couple of years away. that's the model 3 and that's the power wall. if you can value this company looking out a few years on products that lots of people are going to buy, not just $100,000

electric luxury car, then you have yourself an entry point very near here. >> pete? >> what's curious is they've had delays with the x, right? that's one of the issues. people talked about china. that's another issue. from a positive perspective being look at howell it's holding onge to the 220 day average. it's holding above there. the applied volatility wasn't there in earnings. you didn't say that. that is something that has started since this move off of 185. the applied volatility of the options meaning people are very excited about this right now, mandy, but there's still a lot of nervousness about it. is tim going to be right and at one moment this is going to fall apart again or is this going to continue to move to the up side? we'll see how this volatility actually starts to play out as we get a little bit further after the earnings. >> i don't think falling apart is -- >> towards 185. >> and, again, just going back to the battery. it's all about the battery. this is not a car company and that's what i've said all along. >> it's a momentum company.

>> technology. >> it's a valuation. the other thing is you have a big short interest here 27% last i looked. >> right. >> it makes it really hard to try to do a fair valuation. >> let's talk about trading. pete just said the volatility. they're planning an $18 move. that's tomorrow. it's up 5% in the after market. the stock has moved 27% into the print over the last month. there was a lot of news here. we know they've greenhouse deliveries. we know they've hinted towards this new product. would he have a couple of charts here. in this earnings season with valuations there was a couple of patterns. if you looked at linked-in, twitter, they were two stocks that up until their earnings report, sentiment was kind of high. stocks were trading near the year highs. what happened? they cratered after when they disappointed. two other stocks. this was earlier in the earnings cycle. it was amazon and netflix. look at those, very similar in a way. they moved back up towards the highs of the year. they beat and they raise and the stocks blew out. the question that i was asking

myself with tesla, sentiment recently did get better here okay? >> yes. >> they just printed a pretty decent set of results although we had pretty good information. how is this stock going to trade? i suspect the fact that the stock is only up $5. i think a lot of good news. you'll have an opportunity to buy it someplace below 220 in the next few weeks. >> we'll get back to ben kallow shortly. i don't know that phil lebeau is on the job listening to the call as well. still ahead, whole foods is tanking in after hours trades. we'll give you the real reason. green mountain falling off a cliff on a massive earnings miss. herb greenberg is going to be joining us live with a special report. that is next. and as we mentioned, fed chair janet yellen sounding the alarm on stocks. we'll tell you why her warning could be your reason to buy stocks now. much more fast coming your way ahead.

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are sinking. the company's second quarter results missed both on the top line, the sales side as well as the profit side. keurig says the earnings miss is due in many ways to low demand for its new brewing system. as a result, the company plans to reduce inventories. also change its marketing strategy. full year sales guidance also came in below many wall street expectations. the company also named a new cfo. he was formerly the cfo of meade johnson nutrition. they're still down mandy, by 11%. >> ouch. thanks, dom. green mountain kicked the playbook tonight. pete, what do you make of the earnings? >> disappointment again. not just in the forecast but the last quarter of the forecast was disappointing as well. once again, they had the recalls. this is a company that has not been able to get themselves back on track the way they were for multiple years. now the pain just gets that much worse. the technicals even look terrible in this company. it broke down underneath both

the moving averages. it's going to continue to stay under those moving averages. i would say this is a no touch for quite a while. i would wait for this stock to actually show all of us that it can prove that they can get back on track that they can beat some of these earnings they can beat these numbers and they can get over some of the hump of hey, look we have another recall. that's a problem that's over them. >> no touch zone for green mountain keurig. let's get more from herb greenberg. he joins us from san diego. your reaction to the results could be kind of summed up in one word herb and that's yikes. >> yikes. indeed. in fact, i think the best news you could get out of this thing is a little bit ago on the conference call they said that their cold product, that's the one that will have cold carbonated beverage, will come out this fall as expected but here's where it gets interesting. here's where the yikes is in addition to a variety of things and that is the company's guidance. you know they lowered guidance revenue guidance.

they pulled revenue guidance after lowering it a quarter before. that's now to flat to maybe up single digits. that's then with this new product coming online. that to me would suggest a real problem. we know there's an issue with the 2.0 product, the product that they've come out to which is a replacement of the original keurig brewer. free cash flow. they're cutting their guidance on free cash flow down by roughly 1/2. that is telling you this company is really struggling to go through what the ceo now talks about as a complex transition into whatever it is they're going to be. and a lot is going to hinge, i'm telling you, on this cold product. we're going to have to watch that. that's going to continue to be the story. the base business to this company is not what the company had said it would be. >> herb it's karen. let me ask you something. is there somewhat of a floor somewhere in this company though given the very large local ownership? >> this company is currently not growing as fast as coca-cola.

you don't know. does there have to be a floor because of coca-cola's ownership. the stock is going, karen, interestingly enough as of today or almost tomorrow when they announced a year ago, the stock is going to complete round trip. so you know if they don't perform, even if you have a floor there, they will perform. so we'll see what happens. you raised a good point, but, you know, coke is investing in a lot of different types of potential, you know new businesses. this was one or is one. >> it is quite an under performer not counting the after hours performer. it was already down by 17% year to date. herb by good to see you. we got a twofer yesterday and today. good for you. next up on the earnings front, whole foods falling off a cliff. after hour sales coming in below expectations. dan. >> the stock is down 10% after market down 20% in the 52 week high. they missed on their sales.

they had a whole host of the reasons why they missed. weather, currency the list goes on and on and on. if you look at where the stock topped out and you look at where crude oil bottomed they kind of make sense. they line up a little bit. a lot of people have said oh, well, the person who was actually benefitting from lower oil wasn't shopping at whole foods. i'd make the argument that possibly whole foods is an aspirational branltds. when they have that they give a lot of reasons for the miss. i don't like it. it was trading 27 times expected earnings growth 11% heading into this print. they haven't given a whole heck of a lot of answers why the counts were bad. >> at their call it's starting. >> they have lengthy press release. >> i'm long on it. i like it. today is not a great day to be long in it. we've had a complete round trip. i still like it. i think, you know, it's not p but i do think there is growth there. i think that this is a management team that knows how to navigate these waters. it is more competitive.

>> listen it's -- >> but here's the thing. aren't they supposed to be exploring lower prices and part he s forget lower inflation and the macro dynamics are helping this company. they're supposed to be making strategic changes. i'm not sure they've done that. i've read a couple of analysts who say -- >> that goes against the whole aspirational brand thing. >> maybe they should stick with their knitting except that people are eating their lunch. they have to become more cost conscious in terms of their pricing. that's what i want to hear management talk about. i want to hear management talk about that and sure what lower price macro dynamics are doing to the company. they have to change their game. that was one of the things that broke the company down. stock at 38 bucks looks like it has very very good support. take a look. >> you hear people saying, i love shopping at whole foods but it's expes sieve. after the break, a massive biotech deal worth over $8 billion but we have three other names that could also be the next big deal.

then later on elon musk speaks out about the latest tesla u will not want to miss what he has to say. the head honcho himself will be talking himself. elon musk. don't go away. when i'm on "fast money" it's a complete rush. it's fun but it's all about the trade. >> in trading there's rumors and facts. when i come to the show i spread the facts. >> everyone on the show is a professional trader. >> we put our money where our mouth is. >> the easy money is made going with the consensus, the better money is going with the counter trade. >> what's the next trade? what's the trade that nobody has taken a look at nobody has put on that you could put on tomorrow. >> "fast money", weekdays, 5:00 eastern on cnbc. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me. it computes.

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really asking is can your business deliver? welcome back to "fast money." let's call your attention to what's happening with multi-level marketing company nu skin enterprises. down 16% after hours. this after the company reported earnings of 72% per share. revenues coming in $543. that narrowly missed estimates. q 2 earnings and revenue guidance far below expectations. the company also? in a regulatory

filing said the sec in april of 2015 said it was initiating a nonpublic formal investigation into certain aspects of their operations in china and requested that it provide voluntarily some of the information and cooperate with the investigation. we should note also the sec has advised us that the existence of this investigation should not be construed as an indication by the regulator or its staff that we or any of our officers have violated any of the federal securities laws. they intend to fully cooperate with the sec. you can see those shares there reacting negatively to that news. bring your attention to a stock, ann taylor inc. up on relatively light volume. this on a reuters report that the company is in advanced talks to possibly be acquired by golden gate capital. again, this is the same condition, golden gate capital, that bought darden restaurant's red lobster division. two companies to focus on in the after hours, mandy. back over to you. >> very big news in the after

hours trading. nu skin down by 15%. do you have any comments on this? >> well i've been thinking that we should see some more deals in the retail space. ann taylor $2 billion, that is a big price. this must be a turn around for them. it's a big price. >> biotech, we have a massive deal. alexion pharma striking a deal to buy rare disease drug maker synageva biopharma corp. who could be the next target? time for some stock therapy. meg terrell. i apologize about that little twist of the tongue. very, very very strange to have a rare disease maker, wouldn't it? >> it would be funny. we've talked with a lot of analysts today because there's been an unprecedented amount of trades going on. some of the hottest names are

vertex pharmaceuticals. this came up with a note from jeff forge saying it's time for gilliad to pull the trigger on a $45 billion deal. gillead is not the only possible acquirer. other people say j. and j. could possibly be interested. other big pharmas. they have a big sis stick fibrosis franchise. still folks think vertex is one to watch in the acquisition space. another one we're watching is biomarin, another one in the rare disease drug maker space. it's similar to the other and makes drugs for the orphan disorders. that's an $18 billion market cap. this is both a takeout target but also a potential acquirer itself. that's another interesting one to watch. finally we're talking about aread pharmaceuticals. that makes a cancer drawing called iclusiv. it has an activist investor on

the board who just made a settlement to have the ceo retire. a lot of speculation around that name. cancer drugs and drugs for orphan diseases rare diseases are the two most talked about hot spaces in biotech now. those are the three people are watching. a lot of the other ones on the horizon. the premiums are getting very high. >> absolutely. let the speculation begin. let's trade biotech. you're long ibb. you have to have a strong stomach. >> yes recently it's been nauseating for sure. xbi, ibb, fbt, we've owned all three for a long long time. you have to be prepared to stomach the volatility. the reason i own the etfs, i am not prepared to stomach the volatility of owning one drug company that has a failed trial and trades down by 75%. i want to play the consolidation but i can't pick the individual names. >> you're seeing unusual

activity in gilead? >> meg mentioned that as one of the acquirers. i love the big farm mas. it is volatile and scary. look at this name. it's sitting, gilead at $102 a share. then you look beneath that in the options today, november 75 puts. huge activity there. now that's 25 some odd, $27 out of the money right now but they're going out to november buying some time. it makes you wonder if somebody's just putting out a spec play. 11,000 of these trades for about $1. look, if this cracks these will actually start to move. they would be right. if this stock can crack and it cracks underneath those averages, watch out below. i think gilead even though it's cheap and i like the name i like the pipeline, if it breaks it has a long ways to fall. coming up fed chair janet yellen shocking the street. up next why yellen's warning to the world could be a contrary

sign to buy the stocks. plus tesla up. elon musk ready to take the stage. the comments from the man himself when we return.

coming up on the second half of "fast money" elon musk just kicking off the tesla earnings call. we have team coverage ready to provide instant analysis. we'll also be hearing from the man himself shortly. plus we'll be bringing you the trades you need to noah head of tomorrow from alibaba, price line and tosoro. will the big moves spell trouble for the airlines. we have a top ranked analyst tell you how to play the action in the airlines space but first fed chair janet yellen throwing her hat into the market analysis game today with these words of caution at a conference in washington. >> i guess i would highlight that equity market value wagss are generally high. they're not so high when you compare the returns on equities to the returns on safe assets like bonds, which are also very

low, but there are potential dangers there. >> well of course this is not the first time that a fed chair has offered trading advice and if history is any indication that advice does not always pay off. back in december of 1996 you might remember then chair alan greenspan gave his famous irrational exuberance speech. the s&p climbed 28% following those remarks. then again in march of 2007 chairman ben bernanke said the subprime market seems likely to be contained by the end of the next year the housing bubble had burst. most recently in july of 2013 some biotech valuations look substantially stretched. the nasdaq biotech etf is up 30%. are fed chair predict shuns a contrarian indicator? >> what they're an indicator of

two things the fed does target the stock market. anyone who doesn't should remember back to the crisis. their plan was to get unemployment below 10,000. they will never talk about it. >> it seems like a deliberate job. >> this should tell you that the fed is concerned. if you look at the bond market which we've said does a lot of the work for the fed on some level and is getting ahead of the equity market you have to think the fed is at least concerned and to say that no i'm not going to listen to him, it's a contrarian indicator, i'm not even sure. what i do know is the fed does think about the stock market. they said they weren't going to talk about the dollar. they were talking about the dollar over the last six weeks and they were talking it down. >> does anyone on the table think she's correct, she's right? >> let me tell you what they're worried about. if they don't jawbone rates higher if they don't keep zerp

in place, it will go higher. so to me that is actually a big risk because if you have a paramount move higher something like we've seen in shanghai or something like that, then you risk the potential for a crash. it's that simple. we saw it in 1999. things got way way out of control and then we crashed. >> i am not so worried. first of all, i think we can look granular on a bunch of different stocks down on their fundamentals and not all are going to be over valued. >> certainly. >> the market never gets to exact fair value. it always swings a little bit around or a lot around. i think that i don't pay so much attention to it. i'm sure they don't pay very much attention to our ideas of what the fed should be doing. >> you're doing the opposite to the point of the indicator? >> well i think tim brings up a good point. it's about cost. i think what they're doing is putting up that yellow flag. they're not saying, hey, look it's time to get out of the market, this is going to be the time. i think they want to put that lying down every once in a while, make sure everybody is

well aware, hey, look there are going to be situations you're facing and we have made this rush to the up side and use that volatility volatility, use the discipline that you have to use in the markets so you're not chasing them. >> it feels like a little bit of insurance on her part. just in case there is a correction in the market. we did warn you guys. >> yes. >> i think pete's exactly right. they don't want to say, whoa guys, everybody out of the pool. >> right. >> that's terrible for them if we see the market. >> the irony here is i think that bond yields are the ones that to me are totally deflated and artificially low and not an accurate reading. if you compare the stock market and bond market where they should be trading relative to the strength in the economy, the he can wet at this market is in a better place. >> let's get some pops and drops. it's down 98%. >> it's disappointing. guidance. here's the thing, people. i don't know why this company is public. it's trading below its ipo

price. it has a $500 million market cap. it looks like they have have i little visibility. they have tons and tons of competition and we know that there are some fast food or quick food chains that are doing very, very well. this is a no touch even down here. i don't know why. >> don't touch the noodles. anheuser-busch. >> touch the brazilian beer company whose first company fwlums better year over year. they earned twice as much. they have consolidated. the easy getting to these guys which leverages up and generating cash flow to pay down. i would be neutral it won't be shorted. >> even better pop children's place up by 8%. >> this is a name we've known for a number of times. it's in the midst of a hostile proxy fight. they've put out great earnings surprise surprise. the thing that has moved it they have hired goldman sachs. that's what moved the stocks. >> pop call western union up by 12%, pete. >> despite the fact that they said they were in talks with money gram stock hitting highs,

3 times the normal volume. i think the stock can go higher. one part of the performance is yields. they have a great yield. a lot of people like this company and it does not trade at an extreme valuation. >> a pop for cable news stardom. 30 years ago tim seymour world was born. we would like to wish tim a very happy birthday with a very special -- >> oh, we had a malfunction with the lighting. >> look at that. >> what happened? >> i'll tell you what, can we cut that? >> shrinking like your age, tim. >> and i do believe that this cake was from baked by melissa. >> wow. >> melissa lee? >> no, baked by melissa. >> the company. >> i thought it was melissa lee. >> i am totally touched and this is like throwing the discus here. >> don't eat it all at once.

>> make sure we have no more kids now. >> and make a wish. thank you very much. it's a pleasure. >> happy birthday tim. >> it's a pleasure to be here celebrating my birthday on "fast money." >> yeah. i like that. still ahead, crude is up again today while airlines get hit. will the rally in oil prices derail the rally in airline stocks? we're going to talk with top analysts who are still seeing big opportunity in this space. that is next on "fast money."

airlines up 1%. check this out. since the airline etf hit a 52-week low back in october, it's up 34%, seemingly benefitting from lower oil, which is down 29% during that time frame. since oil has rallied, it's much lower, the airlines have held up pretty well down only 4%. jamie baker senior analyst, what do you make of this? why do you think they haven't reacted more negatively? >> i think there's more uncertainty. i never thought i'd hear myself

say it but i'd gladly welcome, you know a return to $75 crude as long as we sat at that level. it's bouncing between 50 and 70. the industry might make more money bouncing between 60 and 70. 70 to 75 gratuity i think you get better multiples, more consistency, more stable long-term owners. >> jamie, it's tim. if we can call oil at 75 which i think we'll find ourselves settling in there, what do you think about the discipline? a lot of people especially guys in your seat look at airlines and say when oil prices fall so does discipline and capacity starts to get out of hand where are guys and who do you think has the best balance now that prices are back up? do you think some of that fear factor should be coming out of airline valuations? >> look, ever since the industry started making money again i've gotten push back that management can't be trusted, profits will prove intoxicating fall off the

wagon, go on aircraft growth benders and quarter in, quarter out, we see no evidence of that. american airlines deferred 787s that were scheduled for delivery next year pushed them into the out years. there's never been an instance when a carrier this profitable took action that significant of actually deferring aircraft. so even at these profit levels we're continuing to see the kind of behavior that one normally started to see at the very very bottom of the cycle. we're still seeing it now at a very much -- very healthier part of the cycle. >> you upgraded jetblue yesterday. it is one of your topics along with delta, american airlines united. let's trade it on the desk. who's looking at airlines in particular pete? >> i own a couple of these. i own them for reasons that jamie is talking about. i see the discipline. they have not changed and gone back to what the airlines have done. the volatility of oil will push

these names around on specific days. in the overall scheme of things, oil even under 75 even under 80, they were making money at 100. they're making money right now at these levels. >> i think american is the one whose chart is the most interesting. it may be the most troubling chart, too. somewhere around $47 in stock looks like it could find a base. but if you look at the valuation and you look at where these guys are relative to their peers, i know delta gave us pretty good guide dance. so did jetblue for that matter. i think with american there's more operational leverage. if we see american pick up these are the guys to play. they have under performed. this is the relative value play. >> they're amazingly creative to find new innovative ways to make us pay for everything. >> good to the stock price. >> yes. still ahead, tesla popping in after hours. we will hear directly from tesla's ceo elon musk on what is next for the electric car maker right after the break.

the tesla earnings call is now well underway. cnbc's phil lebeau has been listening in and has some big highlights, phil. >> mandy, as you would expect there are questions going to

elon musk regarding the battery stationary storage news from last week. remember they made the announcement, said here's the price, $3500. they didn't give any other details in terms of demands, cost, et cetera. some of those are starting to come out. i've got a big detail coming up in just a little bit. first, focus strictly on the automotive business and the question that's come up as tesla ramps up production to 55,000 vehicles being delivered this year is the demand holding up not only for the model s and the model x? here's what elon musk had to say a few minutes ago. >> as far as demand that we do not see that being a problem. there are huge advance orders for the x and we see a steady climb in demand for the s. >> and, remember that production is going to increase in the third and really increase in the fourth quarter. that's going to be a big focus later this year. the execution of whether or not tesla can increase production to get up to 55,000 deliveries this

year. now to the battery storage unit because, remember, we haven't had a whole lot of details until now. just a few moments ago elon musk said the consumer unit they're selling for $3500, the reaction has been in his words, crazy. more than 3500 power wall reservations have been received in the last week. at that rate given the fact that they're starting off production in fremont, california they're sold out well into next year. he's very optimistic about the power wall. i'm going to hop back onto the conference call to hear what he has to say about the energy storage unit but also the automotive business which is what so many people focus on with tesla. >> you get hopping. phil lebeau with the highlights on tesla. tomorrow is another huge earnings day. it's time to take your positions ahead of the big reports. let's kick it off to zorro. pete how are we looking at

that? >> they prerelease the. we have a little bit of a sense of what's going on. it's had incredible performance year to date. i would expect because the management has done such an incredible job i think despite some of the stop pages, i think they'll come out with great numbers. tomorrow i think the street will reward them. >> looking for reward for tesoro. alibaba is going to report after the bell. it's hit an all time low since the ipo. >> the bar is so low that i think you have a pretty good trading opportunity. $5 lower is a very good opportunity. i made the argument $2 higher. i thought that was a very good base. if you look at the numbers coming up we priced in so much negativity for baba. the irony is everything people want to see and distrust about the chinese ecommerce market is that there is no transparency regulation, that the merchants might be fraudulent. everything that is happening

should be happening. >> no concern about the comment from jack mawr that they're doing a hiring freeze and what might be the motivations? maybe regulators whispered in their ear? >> he also listened to some of the criticisms that some people were saying the cap exwas too high. i think 37 to 40% growth which they're going to give you at a 26 times 2015 multiple is some of the best risk/reward in the space. >> let's go to dan. dan, you're saying the options market is expecting to see pretty good moves out of baba tomorrow. good moves or bad moves? >> you really don't know. the options market is implying a 7% move in either direction. that's about 6$6. the average mover has been 6.5%. options volume ran really hot. options volume was two times average daily with calls outnumbering puts 2 to 1. it was an interesting trade that

caught my eye when the stock was about 80 bucks. there was a trader selling out at 5,000. the july 90100 call spreads. basically peeling out of a prior bull ush bet. when you look at the chart, the stock ipoed down here at $68. in september it had a monster run. that was the high in november. look at this it's gone all the way down. sentiment is really poor. there are a lot of things going on. obviously we know that the chinese economy has been slowing in growth down to 7% maybe even lower here. they have regulators on their tail. here's the thing. the stock has held 80 really really well. if you get a move down to the implied move down $74 on the down side, that's a few bucks above the ipo, it will be new all time lows. you have an opportunity to buy it. that being said sentiment is so poor. if the numbers are in line and the guidance is just decent i think you have this stock back in the mid to high 80s very quickly. i would expect movement here one way or another.

i'd be a buyer back towards 70 if it gets there. >> thanks, dan. coming up the final word on tesla and the word from elon musk right after the break. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this. man: you run a business. could be any kind of business. and every day you've got important decisions to make, like hiring. where are you gonna find those essential people you need? with ziprecruiter, it's simple. we post your job to over 100 job boards with just a single click, so you can reach millions of qualified candidates. then we'll give you the tools to help you manage, screen and rank your applicants

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let's get a final check on shares of tesla. still hire in the after hours section. ben kallow has been with us for the full hour. ben, what more have you heard that gives us some sort of indication about the stocks future? >> well just going back. elon just made a comment about the giga factor which is very interesting latching onto the stationary storage. he said that demand has been so great that they're working on expanding the giga factory up to by 50%. so cars and stationary storage demand has been a bear case. the other bear case we've heard while we've been listening is the cash burn. people need to remember this is a growth company. the cash burn is going to fund that giga factory and fund expansion over fremont for the model x and model 3. >> really quickly, is there anything that's stuck out that's bothered you or worried you,

ben, really quickly? >> q2 guide for deliveries is low. that's what the cadence will be and how they'll set up quarters. they're not going to give outlandish guidance. they're working more methodically to get better margin. the street will like that and reward them. >> it is time now for the final trade. let's go around the horn with timmy, birthday boy. >> i'm involved in the second annual master chef celebration supporting adaptive sports foundation and wounded warriors. tune in to my twitter account to learn how to support it. >> twitter, i'm long buying it. rethink the low 350. >> karen? >> yes, mylan, this is one that we'll deal at some point. happy birthday tim. >> thank you karen. >> pete? >> happy birthday to you, tim. looking at whole foods. down as much as it is. i think a lot of this is priced in. because of that i think down here around the $42 level i think you can start nibbling

away at whole foods. >> nibbling no pun intended. i'm mandy drury, catch fast mon again tomorrow night at 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 no --. hi i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends i'm trying to save you money. i'm trying to educate and teach and coach you, so call me at 1800-743-cnbc or tweet me @jimcramer. thanks for nothing, janet yellen. sheaf used frightening terms to describe the stocks today saying that valuations quote,