guys, thank you so much for joining me on "closing bell." carol roth and michael santolli as we continue to make sense what just happened this afternoon with the federal reserve, dow goes out with a gain of 74 points. that does it for "closing bell." right now "fast money" begins now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. traders are steve grasso, brian kelly, karen finerman and guy adami. stocks hitting their highest level of the year but a top technician says something is very wrong with this rally. he'll tell you what that is and how you can protect yourself. plus, fedex out with a big beat and the stock is surging after hours. the call getting under way right now and we'll bring you the latest and the implications on what that should mean for the broader markets, and later energy space is so bad right now that it could actually be good news for one very crucial part of the market. we'll tell what you that is, but, first, we start with what was the most northern day for the markets this year. both the dow and s&p 500 closing out their highest levels of the year as the fed left rates

unchanged and signaled two rate hikes later on this year. now, that looks like the fed seemingly has cold feet so what are you doing with your portfolio at this point? guy? >> i think you stay with the cold market. i think gold is telling you everything you need to know over the last three weeks to the last month and a half where on every rally in the s&p where gold should have sold off it has not and it's gone higher. look at the move today. obviously hey lot has to do with the weaker dollar here. again, you have central bank policies. everybody is in this currency race to zero by definition that supports gold and i think gdx is the way to play it. >> the problem is they pushed out inflation. they pushed out -- there's no sign of inflation. i understand there's a host of reasons to buy gold. inflation hasn't been the main reason to be buying gold at this point but if you see gdx it looks to me like it's rolling over, and i don't think you can buy gld or gdx at this point. >> actually in this case i think you buy gold under both scenarios. here's the situation. let's just say they are right and they manage to get the

economy going, but they are going to tolerate higher inflation. what do you do in that environment? you buy gold. let's just say they are wrong and the economy rolls over. what are they going to do? now we're going to have a real currency war that weakens the dollar. you buy gold in that scenario. >> it's a win-win trade. gold is a win-win trade. >> a transitory trade. can't buy gold. >> why can't i? i want to buy gold. >> they reached for yield today. >> they reached for gold. it was up 30 bucks. >> great. but they reached for utilities. they -- >> they reached for gold. it was up 40 bucks. >> i'm glad that you brought that up because -- >> i'm looking longer term. >> that's what was important about the market reaction today is you saw a lot of things rally at the same time that shouldn't be rallying at the same time. >> right. >> karen, what did you make. reaction today? >> well, the news itself i don't think was particularly shock, right? i mean, it was telling you that going in, but i like everything i own. i thought they made some positive comments on the economy in the u.s. anyway so to me the interesting trade was volatility index came way in.

talked about owning puts. i bought them higher here and bought them today as well because i like what i own and i like the u.s. economy. i want to stay long. but it's getting cheaper and cheaper to protect that portfolio so i feel like you've got to -- >> let me ask you two questions. in december, they said the economy is so great we'll have to raise rates. today they walked that back and said, you know what, global economy is pretty weak out there. we might have to actually lower rates. i mean, that's what i took away from it. yield curve is going to flatten. how can you light the economy and stocks and financial in this environment. to me the first reaction was sell financials. >> which is exactly what we saw. >> we saw that already. when you look at what happened in the financials, look at the xlf was down very modestly. in fact, the whole range. xlf was not particularly big so this has been telegraphed for a while that we won't see a rate rise right now. i think those stocks are so overdone to the downside. i think the valuations here reflect a not -- a not big curve or steepening this year and so i think that if we do get it you're getting it for free, but

this bet is so data dependant. look where the world is two months ago and look where we are now. >> it's worse now. >> but it doesn't stop the market. at a certain point you've got to say i've been negative on market but at a certain point if we start to take out these levels, 20, 30, to 50-week moving average, 20, 40, we're approaching basically flat on year, got to say bear suit away. get long stocks. >> no, not at all. not -- >> why? >> first of haul, that's not how i trade. that's trading backwards. >> trading backwards. >> why would you buy at the highs, come on? >> why wouldn't you buy at the lows? >> why wouldn't you buy at the lows. >> >> i would buy at the lows. >> but at the lows you were very bearish at the lows. >> in fact, at the lows is i said don't pressure shorts here and put on hedges for my short positions and up at these levels i'm taking the hedges off. admittedly -- >> only a fool is not swayed by the facts, but i'm not calling you a fool. >> these aren't the facts, that's the thing. >> at a certain point. >> i guess so, but at a certain

point. i don't think we're at that point. >> what's the point? >> it has nothing to do with technicals. has everything to do with the fundamentals in the economy. >> it doesn't matter though. >> it does to me. >> it doesn't matter. >> sure they do. >> the market has rallied 200 handles and nothing has gotten better and it's 200 handles. >> it can go down 200 handles then. >> i'm blowing the whistle. based on what the fed said you're bullish or more inclined to buy? >> more inclined to buy yield. >> alcon. >> consumer the staples. >> things people are overvanld you'll go in and buy right now? >> you're more set be stops but markets need to hold here. >> sure. >> so to b.k.'s point you've got to being a noveltyic. if you've got to trade here and go below 2,000 you have to take things more off the table. >> you're more bearish based on what the fed said. >> they came around to my point of view, that the global economy is slowing, that the -- so now you have to look and say, all right, are earnings going to be better in this environment and i

don't think they are going to be. >> i would quickly say the two rate hikes they are talking about for the rest of the year will become one rate hike for the rest of the year, and if it does happen it won't be until december. my point has been they continue, in my opinion, to paint themselves in a corner, they being the fed. all this did today, again, my opinion, was to further paint them into a corner. at a certain point their credibility goes away. they will say two rate hikes and then it's going to be one rate hike in deeks and then they will say the global economy is weak and we can't raise and at some point market says, you know what, maybe things are the way b.k. says. >> i think you feel that the fed's credibility is out of the window at this point. >> 100 point. >> at other points people will come around, to the only our fed but central banks around the world have. >> the core larry is what happens to the regional banks? karen mentioned the xlf and the kre which tracks regional banks. track different stocks and have a bigger lending book, a bigger

lending curve. a name like pnc. sun trust, do you not buy them in this environment? >> difficult environment for the banks, no question, and we talked about this last night. is that environment baked in? karen just talked about it. valuation would suggest that it is baked in. i think though, and we can all agree that banks have gotten cheaper historically than we've seen them now. i think the rate curve works against them and their ability to make money is difficult in this environment right now. >> lower for longer interest rates. what does that mean for the consumer in the retail portion of your portfolio >> i think it's probably fine. i think though it's looking the other way around though. >> okay. >> if the economy does well, even if they have not to raise rates and the economy does well. that's good for the consumer and energy, that's an important factor for the consumer as well. i feel comfortable making a bet on the consumer and feel comfortable with the retail book. >> stocks may be surging on the back of the fed but our next guest is looking at pretty troubling signs in the economy.

rich, what do you see? >> the most troubling sign is that i've been wrong for the last 2% here i.removed a tactically bullish call last night, but, melissa, i don't plan on being wrong for long. in fact, i wouldn't be long either. let me tell you why i think we could see some trouble in here. when you stare at the jump, the first thing that jumps out at you, as we've been in a non-trending market, sideways market in the better part of the last two years, and when we look at this, what jumps out at us, the striking symmetry with the double bottom we saw last august and october. gave us this v-shaped rally which was about 33 days. what are we looking at here? another double bottom. about 29, 30 days into it. broke above 2,900 day here and had another seven trading days after we broke about national, about another 1% to 2%. i think history repeats itself. at best, you're looking at 1% to 2%. now, keep in mind. bottoms occur in v-shaped national because the fear is palpable but hope dies hard and tops take time to form and i think that's what we're going to

be looking at. when we take a step back it allows us to remove emotion from the equation and to b.k.'s point, i think he's right on it. still staring at a six-year bull market with a two-year top and running into resistance that steve alluded to up around 2233. look back to 2008, i know people don't want to hear 2008. i'm not saying we go down here, five-year bull market, three-year top, countertrend move, fails right here into that 50-week moving average, trust me that we failed right there, and ultimately we've moved lower. had a very similar countertrend rally from march to may of '08 and march to may of 2001. years which marked the beginning of bear market reversals, so while the recent rally is very encouraging, we give credit where credit is due. the action in the weaker dollar, the stronger crude, that's all great, but keep in mind we have a market that's being led by the lagards, the former leaders are

falling by the wayside in terms of health care and financials remain in the penalty box and small-cap stocks remain in the penalty box. this is not the hallmark. beginning of a structural bull market. once again we move back here, we probably have another couple days, 1% to 2% here, but you want to start to be a seller as the market forms this top and keep in mind we're transitioning from a period of strong seasonality which started in november and runs through may and then we move into a period of weak seasonality from may through november so if you get into april and you're still up around these levels, you're going to be staring at a 13% rally at the tail end of a countertrend move being led by lagards, going into a period of weak seasonality. that's not a strong play from the wrong side. >> rich, here's the problem, how we opened up. at what point. i've been negative and had your same viewpoint and at what point i hear you saying 1% or 2% higher, but at a certain point you have to realize we're looking at in the face of crude that won't crack again, and i think if crude doesn't crack you could be looking at much higher

markets. what do you say and where do you draw the line and what levels in particular that we close above make you change? >> great point. i mean, we have to manage risk here. technical analysis at its heart is not just a crystal ball but also a framework for managing risk. let's use 2070. have to have a hard stop in here. 2070. doesn't mean you'll get wildly bullish and if you're a short seller and that's too wide. where do we close? it's 40 handles on the s&p 500. if you can't handle, no pun intended, 2% and 40 handles on the upside you shouldn't be shorting this market. that shouldn't be the pillar which holds up your bearish case so give yourself to a daily close above 2070. that's your stop, hard and fast and after that we clear the chessboard and reconsider the view but absent that i think we're staring at exactly the same time and the countertrend which failed miserably and in march 2008 and march 2001.

don't chase this real. i don't think it's the winning play. >> rich ross of evercore. >> if you fail to plan you plan to fail. i've said 2025 now. here we are now. give it a couple of days to see if it holds. i thought today's price action in the context of the last couple of weeks 2, hundred-point rally and the context of that i thought the market held up rather well and we'll see that's what makes markets, sister. >> we want to hear what you out there have to say about today's fed announcement and vote in our poll at twitter.com/cnbc. >> coming up next, first the valeant crash and that could spell even bigger problems for the embattled pharma giant and fedex out with a huge beat and the stock is rallying after hours. that call well under way. we'll hear from ceo fred smith on the quarter and when he says about amazon and later could the tailspin from the hardest hit mining an coal companies be

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for wall street whipping boy valeant pharmaceuticals. first it was the stocks and now the market is losing confidence in its stock. take a look at chart, maturity in 2018. is this becoming a credit%? >> 100%. it's been a credibility story and then a credit story. both start with cre. >> and "d. >> and i like at that. >> see how it works. >> listen, i think we've said for a long time. two nights ago you said on valuation can you buy valeant, you can make an argument on valuation but can't buy it because of the headline risk and you saw what happened in the subsequent days. here you go. what about trading the stock? made a 31.20 low and the north two days traded north of 200 million shares and if you're so inclined to trade it for a bounce which we've seen over the last six months in the name, go ahead and knock yourself out, but i'm telling you that the credit says and karen will probably back me up but it has a long way to go on the downside.

>> crazing striking similarity, the street didn't want to abandon the stock for a very long time. people today only downgrading it from a buy to neutral after a 50% decline. this strikes me as another sun edison. >> i guess, it could be. >> i mean in, terms of that spiral that happened, a disbelief on the street and amongst shareholders. >> yeah, i guess that's true. that was one clearly i was burned on so i hate to even think about it. i mean, there are some similarities there. this one, i think it's absolutely ridiculous when the street comes out with things like market perform. this is not a market perform. >> right. >> you really think that's going to perform in line with the market. >> what -- that is the most ridiculous thing when you see things like that. i agree. headline risk all over the place. it could be good, could be bad, who knows. i think it's hard no believe when people got into it and they had an $88 target or whatever. two days ago, that now they have adjust it had and they have fully factored in everything

that we saw yesterday. >> and you can't plate equity in this. >> play it some other way. >> play it even if you don't want to play it at all. >> no clue in what's happening. 12-hour increments let alone 12-hour increments and can't watch a stock trade down in your face like this. >> 50% and think you have a handle on it. >> one last thing that i want to add though, the debt, while crushing and big is not a very front burner today problem in that they don't have a ton of maturity due in the next 12 months. >> right, right. >> they have had a little bit of room. it's still a massive amount of debt that they need to address and it's not like sunedison, they need to address it next week. >> and needed access to the funding markets unlike this situation, but similar to sunedison there's a real question about management credibility. remember back in december management communicated with the street. when mike pearson came back to valeant, he had those individual conference calls and calls with the analysts on the street, and somehow between that timics

which is a few weeks ago and yesterday, the street still didn't get the story? >> right. so there's a couple issues when we talk about the credibility, management credibility, completely botched this, whether you believe it or not, the stock was down 50% after they open their mouths and they botched whatever message they are trying to get out of there and the second is what is the plan for the company. we've now changed their business plan and will they be able to generate the revenues that they thought they would in the past i'm with steve and karen and i think on this one it's much better to watch the train wreck as an observer rather than be part of the train wreck. >> and when companies like valeant and today in mallinckrodt, they traded down low as much as 11%, 12% and closed the day down of% or so, doesn't that also put more pressure on the group overall? >> when i say to buy it for a trade, i'm saying, listen, we talked about sunedison, look at some of the bounces you saw on sunedison the past couple of

months, pretty unbelievable and here we find ourselves within a whisper of a 52-week low. you'll have a day when the options traders who have negative w.h.i.p., not to get too crazy, on "options action" they can explain it. the higher it goes the more they have to buy and the lower it goes the more they have to sell. they may get caught up in the vortex on the upside. doesn't mean it's fixed but the stock will be more volatile than unusual in this market. >> fedex rallying after hours on the top and bottom line and ceo fred smith making interesting comments about amazon moments ago. we'll bring you the headlines right after this. i'm melissa lee, you're watching "fast money" on cnbc, first in business worldwide. mean time, here's what else is coming up on "fast." >> i didn't do it. >> that's basically what the fed said today so with rate hikes on the sideline, the global head of fixed income at vanguard will tell you what to do with your portfolio now. plus, is this man anti-capitalist?

>> frankly i'm disgusted. >> and so are a lot of free market economists with what the donald had to say last night. and it's got a lot of traders nervous. we'll explain when "fast money" returns.

welcome back to "fast money." we've got an earnings alert on fedex. morgan brennan is back in the newsroom with the latest. hey, morgan. >> reporter: melissa, shares of fedex are soaring after narrowing their full-year guidance and saying it expects positive momentum to continue into fiscal 2016 so on the earnings call which is still under way chairman and ceo fred smith saying there's three things he wants to address based on reports, future margins, industry disruption and capital spending. in terms of the margins, saying the expressed profit improvement program will be exceeded by may 311st and he expects ground margins to grow and he's optimistic about freight improving as well. it's interesting because the truckload segment, fedex's volume business, did see volumes increase in 7% and in terms of disruption smith not monksing amazon's ongoing disruption into transportation and logistics by name but saying this in response to reports. >> reporter: the concerns about

industry disruption continue to be fueled by fantastical and let me emphasize i chose this word carefully articles and reports which are devoid of in-depth knowledge of logistics systems and the markets which fedexer is sglfs so that presumably in response to response to fedex and its current competitors could face a threat from amazon as it grows its own transportation network, we've seen the shares trade lower when we get headlines on amazon and smith outlining spending plans, higher than originally expected and investing in fleet modernization and expansion of automated facilities so if you take a look at shares of fedex they are trading higher in the after hours trading up 5.5%, 6%. back over to you. >> thank you, morgan brennan. it's interesting how fred smith responded to the fantastical reports rather than saying they are fullch boung or they are not going to impact us. >> that's a much better word, fan fast call. >> chose it very careful.

>> clearly he thought about it. a great quarter. looking a the operating margins on the express side, they crushed it. operating margins on the ground side, not nearly as good. fedex is not expensive. 12 times forward earnings and if you go back to bay and topped out at 185, you look at the chart, a series of lower highs and lower lows and at this 152 level now we're at the top end of a pretty defined downtrend. needs to close in my important above sort of right here 152 or so over the next couple of days and my sense is we sort of fizzle out right here. >> mr. gloomy and deem, let me ask you this. didn't fedex tell us that things are not as bad as we think or as you say? >> i certainly can't deny they had a fantastic quarter but what we did see was an inventory re-stocking over the last quarter and now when i look at inventories relative the amount of sales in the economy we're at levels that preceded both the 2000 recession and 2008 recession and seems to me if i'm

look forward, unless we're getting a massive amount of retail sales and huge demand out there which the fed told us today we're not going to get, that this inventory re-stocking cycle may be over, so when i look at it probability-wise, do i want to own fedex at 152 with maybe 155 as the upside to t.absolutely not. >> transports are up 7% in the past month. what does this do for transports? >> i want to play would you rather? >> i love the game. >> would you rather -- >> you didn't ask my question. >> ups is up over 5% year to date and fedex is down a couple percent here to date. look at the chart, ups is above all of its moving averages. to guy's point, fedex is trapped below its 200-day moving average and has to close above 133.53 and ups better bang for your buck and would i buy it there. i don't think the global economy is doing that great so i think a lot of the stocks are probably going to turn back and go back down. >> a lot of stocks, meaning a lot of transports. >> i think ups though if you're going to gamble on the market

and gamble on the markets staying high here and running with momentum, go with ups and clearly has the momentum over fedex. >> i like them both, but ups, i wonder if -- i've been surprised by the online shopping and how quickly and how massively it's being adopted and how much this affects them in a positive way. we see with amazon. that -- i don't know if that's taking it away from the global growth embedded in these numbers. >> oh, i see. >> if it's a shift to a different kind of business. >> you're not measuring increased demand and you're just measuring that that's fulfilled in a different way as opposed to guy going into the store which is what he does. >> i'm pretty excited about buying something on line. >> did you get an aol account yet. >> dial it up and put your credit card in the screen. >> he's got mail. still ahead, now that fear hikes are here to stay, what the biggest fund manager tells us about his portfolio and where he's putting miss money to work

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welcome back to "fast money." stocks rallying after the fed left rates unchanged. the dow gained 74 points. energy and materials were the best performing sectors led by a surge in crude oil. here's what's coming up in the second half. show. is intel about to get chip-wrecked? why some traders are betting the stock is on the verge of a major breakdown. plus, the biggest bond manager in the world will be here to tell you what you need to do with your portfolio now that rate hikes are seemingly off the table but, first, we've got breaking news here on bill ackman. seema mody with the story back at headquarters? >> bill ackman is selling 20 million shares of m ho ndelez which reduced the stakes in the company, mondelez to about 5.6%

and that means it is the third largest owner and has a substantial uninvested cash. in the letter they say we reduced our stake because mondelez had become an outside position in addition to its large size and outperformance relative to other holdings. we're looking at the stock, down about 1.25% after hours. melissa? >> all right. thank you very much, seema mody. outside position because of its own outperformance and also this severe underperformance of the other parts of his portfolio. i mean, we were just talking about valeant pharmaceuticals for one, that's one and herbal life is another. >> 43 million share position so basically cut it in half. i mean, it's not coincidental that he was raising $800 million-ish with this which is probably what he lost over a day, day and a half and the valeant thing and right in context. he can say whatever he wants to. me this is raising money to

offset the lousy position which is why by the way people are trying to run him in on things he's short of. for example, no coincidence that herbalife has had a pretty decent couple of days. >> canadian pacific, zoetis and mondelez is up 20% over the past 12 months and up 6% the past month. >> relative to valeant everything is going to be an outperform if you price everything based on valeant. remember eddie l ha mpert bought on sears holding and his whole fund became that. that's what it looks like here. eventually the whole fund will be valeant. >> whatever he's long you've basically got to be on the opposite side. he's going to be up and down and taking risk completely off the table. he's treating every other position in his portfolio as the atm until the slide stops in the rx and i think that's the way you have to treat it. >> he does say in this release.

first of all, i don't know why he puts these releases out actually. >> i mean, why does he need to keep the street up on moment-by-moment trading, and i don't know, but, okay, so he did. so, you know, he says now we have uninvested cash. i wouldn't have been surprised if he was in a margin position and to meet that margin needed to liquidate something. that would explain it. this note seems to try to say that that's not the case, i think. i don't know, the stock is flat on the year. it's awfully odd that today was the day to sell it. >> today was the day after a 50% decline of valeant. >> it's odd. >> it makes you wonder. >> i don't know. shares of co-producer peabody tanking today after the company said it may have to file for bankruptcy. cnbc's morgan brennan is at headquarters. >> reporter: peabody energy getting ballotered today falling 45% in regular trading after the top u.s. coal miner said it may have to file for chapter 11 after delaying a $71 million interest payment on senior

notes, exercising a 0-day grace period and express quote and ability to remain a growing concern. forsythe energy is saying it too can file for bankruptcy if an out-of-court lending structure can't be reached. no surprise to the street that these companies are in trouble but it does speak to the accelerated collapse of the american coal industry. since 2014 five other companies have gone bankrupt including patriot cole and james river cole. this has been a perfect storm for the commodity. weave got a stronger dollar and weaker deand in china which have hurt cole exports and stateside environmental regulations, coupled with cheap natural gas have cut demand for power generation, and just to see what i mean by, that just this morning the eia project that had this year nat gas will top coal on an annual basis for u.s. generation. this will be the first time we've ever seen this happen. it's a broad secular decline.

it's not going away and that's really the reason every coal stock has shrunk to microcap status. melissa. >> could bankruptcies actually be a positive develop? michael contoplous is head of investment strategy at bank of america merrill lynch. micha michael, is this the flush that we need to see? >> you know, i think in the coal space there's obviously huge challenges. you know, half. coal reserves in the world will not even be tapped just because of the environmental changes, the move to natural gas and clean fuel alternatives so on the cold side there's structural headwinds and particularly with the high-yield issues and overall to the entire industry and what i think is interesting is can we take the coal industry and apply that to what we've learned in the oil industry and that's going to be an interesting story over the next

5, 10, 15 years as maybe saudi sits back and saying we don't want to be in the same position where we have half our reserves stuck in the ground. we need to pump to get them out in order to monetize them. i don't think it's a story for this year or next, but as we think further down into the future there's a lot to be learned from what we saw in coal and apply that to maybe other sources of energy. >> that's where think the saudis are thinking, that they are sitting on all the reserves and have to get it out on the ground and otherwise they will be on tap like coal. otherwise they will continue to pump and there will be a glut in supply and that will further pressure companies here, at least probably stateside, the shale producers into bankruptcy. >> listen, there's a huge problem with respect to the shale producers, particularly in the high-yield field. we're seeing a tremendous pickup in defaults? ? >> at least a third of all ccc high-energy companies to default. >> a third. >> of all ccrs. 10% or more of all commodity names in the high-yield space will default in 2016 and i think that can get accelerated quite

frankly. what i will say about saudi i think this is a longer term strategy but i think you're absolutely right. they won't let prices get up to 90 or 100 again. i think you're absolutely right on that. >> let me ask you something. if you see these defaults, and does that hurt or help the supply demand dynamic if you have balance sheets approved through the bankruptcy process and still have assets that can produce oil. is that net-net a negative or positive? how do you think that plays how the in the. >> short-term negative and a longer term positive. i don't think the shale industry is going to go away. what's going to happen is you're going to have stronger players, probably more integrated players like an exxon, for example, step in and absorb those assets and the shale play is not going away. it's just that the high-yield play may look different. >> what happens overall to the high yield? >> a great real since february 11 and recession fears were overdone in the first six weeks of the year. as bearish as we are i didn't think we were in a recession

either. we did have a bit of a bear market rally. i would fade the rally and we'll retest lows from what we saw back in february. we have a problem which is there's a lot of cash coming to the market giving 7 trillion negative rates globally but at the end of the day fundamentals remain poor and yellen today talked about global concerns and tightning of financial conditions, being a big headwind to investment policy and ultimately investors, will wake up and look at poor fundamentals and retail sales, non-ism, look at poor fundamentals on the earnings side and fade the rally. >> thanks, b.k. >> absolutely. >> because that means -- >> a high yield high. >> so the extrapolation is negative stocks. >> exactly. very similar to mean and it goes back to the saudi issue as well, they are going to pump as much out there, and the underlying fundamentals of all of this. the one thing is i don't think the market is expecting those kind of default rates at this

point in time, particularly after the rally we've had in high yield. i think that would be a surprise to the market. >> i don't disagree with anything you or the high-yield heat says, but i think the market has performed and unless oil -- i think oil is the canary in the coal mine. unless it cracks below 32, i think the market is still on rally. >> you bring up an interesting point about the canary in the coal mine and read a piece earlier today that said that the banks are the canary in the coal mine. it's very difficult for the market to perform when bank stocks are down and bank stocks have not performed well in 2016. >> i'm liking this guy more. >> the market has been rallying right now and the market still looks like it could pop even higher and the banks are probably not mar tis baiting. i think that you are right. >> yeah, yeah. >> right in perception six months ago and now the market with energy and materials and all these names that are died to china and global growth have managed to be the beta play lifting the overall market. >> 85% correlation with non-commodity high yield is the

oil move. >> all right. michael, thank you. coming up, the fed cutting the expected number of rate hikes down to two so if you have a bond mutual fund what does that mean for your money? we'll tell you what you can do to stay ahead of the fed right after this blake.

compared with the projections made in december, the median path is about one-half percentage point lower this year and next. the median longer run normal federal funds rate has been revised down as well. in other words, most committee participants now expect that achieving economic outcomes similar to those anticipated in december will likely require a somewhat lower path for policy interest rates than foreseen at that time. >> that was fed chair janet yellen telling investors today to expect fewer rate hikes this year. so, if you hold a bond mutual fund in your portfolio which means you probably do and some part of your retirement portfolio, what do you do right now? well, we've got the world's biggest bond manager to answer

that. greg davis is head of vanguard and has $950 billion in assets under management. greg, it's always great to see you. >> great to be with you. >> how does what janet yellen said change your view, if at all, of bonds? >> it really hasn't changed our view at all. we've been pretty consistent this year thinking the fed was going to hike two to three times this year. we were a bit surprised they are still anchored to doing four rate hikes next year. we think it's a bit aggressive but good to see that their longer-term dots and their forecast was coming down a bit and the longer-term dot came down from 3.25% from 3.5% >> we hit a high on the ten-year 1.99 a-plus, practically 2%. your forecast, still standing by 2% to 2.5%? >> that's still what we believe throughout the rest of the year we'll be in the 2% to 2.5% range. very difficult to break out of that range on the upside at least, just given what's happening when you look at the global bond markets. you see german bunds trading at 311 basis points and germany at

a negative nine basis points so there's a lot of support provided to the u.s. treasury market so it will be you have to to break out of that range to the upside. >> brian kelly. i'm curious. over the last eight years we've seen the federal reserve revise down virtually every single one of their forecasts, including when they are going to hike rates, including what they think the path is going to be. why should we believe now that there's going to be two hikes this year and four next year, and wouldn't that just be screamingly bullish for bonds if there's not going to be? >> well, i would say that, you know, some of the economic data that we've been seeing recently is starting to show signs that the economy is continuing to gain traction. if you look at what came out in the last month or so, you know, you saw that tick down to 9.7%. it's still elevated relative to where we were before the financial crisis. however, it's definitely showing signs that the labor market can continue to improve. we've seen job growth continuing to rise and that's also a good side healing in the marketplace, you know, which i think will

give the fed the ability to raise rates this year, somewhere in the two to three times type of range? >> greg, taking a look at where vanguard sees the values, does that seem a little surprising, that you'd have to weave through, you know, oil price stability and commodity stability and also dollar stability. what do you like about emerging markets right now? >> well, i think in general, there's still a fair bit of value when you look at market spread, very similar to what we've seen in the investment grade market as well so, you know, when we think about emerging markets, as long as you have a fed that's anchored to being more dovish, that's going to tend to be more supportive to emerging markets and allowing that sector of the market to do relatively well, so, again, we think there's value there, and as long as the fed is somewhat dovish we think it can outperform the broader market. >> greg, great to speak with you. thank you. >> great to speak with you as well. >> greg davis of vanguard. emerging markets. seems like that makes sense. >> ah, i guess so. >> i don't know why i turn to

you. >> we just talked to the high-yield hotty who told us that perhaps oil could be going down. that's going to hurt emerging markets. look what's going on in brazil. just an area -- i don't want to take that extra risk and reach for that yield when there's big risks out there. >> i feel like it denigrates michael contoplous by calling him high-yield hotty. we don't do that to a female. >> he's signing head shots in the lobby right now. >> he said he liked it. >> that's an excellent point. >> that's true. we wouldn't say that about a female because that would be sexist. >> if he was here hanging out, we'll apologize. i'll apologize on our behalf. >> he's over there high-fiving the other guys. still ahead, for the past two days something strange is happening win tell. we'll tell you what it is and why it is raising some eyebrows in the options pits. much more "fast money" ahead.

welcome back to "fast money." we've got some breaking news here on bill ackman. seema moldy has more at headquarters. seema. >> we're following the bill ackman story of selling 20 million shares in mondelez based on today's closing price of 41.72. the 20 million shares he sold were worth about $834 million, but keep in mind due to some bad

bets, specifically valeant pharmaceuticals, pershing's square net asset value is down significantly, down 9% over the last week and down 26% year to date. keep in mind these numbers are due to yesterday's close. they do not include the sale of mondelez. again, a significant drop in its net asset value. back to you, melissa. >> seema moldy, thank you very much. down 26% year to date. karen, what does -- that's quite a big hole to try to climb out of. >> it's an enormous hole but you can't look at the hole in isolation but look at the hole on top of last year's hole. >> right. >> so last year's hole was about, i'm sorry if the number is not exact little right so about 20%. so going into this year you had 80 cents on your prior dollar of what we call high water mark, the highest of your value you had ever had, so if on top of this you compound it with this loss, you're looking at what was $1 is now 58.8 cents. >> wow. >> to get back to $1, he needs

to do in excess of 67%. >> wow. >> just to get back. so, you know, it makes -- we've seen ackman on the ropes before. >> not like this before. >> not down this. what i think about is, you know, it's hard enough to be an investor and pick the right things and know how to size them but then to also wonder how do the rest of your positions play into it because people are betting against him or you have a margin call. i don't know if he has a margin call, but it -- i can't help but be skeptical of this mondelez trade having nothing to do with what's happened to the rest of the portfolio purely because today was the day. >> if i'm an investor and i own mondelez and see bill ackman is having difficulty and today might have faced a margin call which is why he might have sold part of his mondelez concern, do i get concerned -- >> if you're long anything he's long you should be selling those

names. >> just because this one guy is having a bad year? >> i think you have to play it. it's a trade. >> yes. >> i think -- >> guy, do you agree? >> it's over. two days ago people were shooting here's valeant's list and as soon as it started falling apart, look, here's what he owns. >> if valeant is over. >> what do you mean? >> over there. >> right, right, right, but in terms of people trying to get ahead of ackman selling out, at this point as long as valeant does go down another 50%, then i think the trade is over. >> let's look at performance from 2014, down 42% from the end of 2014. >> from the end of 2014. >> that's right. >> he's down 42%. >> i don't know what you do if you're an investor and, you know, you're a fiduciary and have an institution. this is where you are right now. i mean, i know we've talked a lot about how do you get the money out there with gates. i think you can't withdraw it

except over a quarterly over two years. this is a very, very big hole. >> the other complication i would think is that he's so involved -- well, he's very concentrated positions and very deep in terms of involvement so, for instance, for valeant pershing has one board member on the board of valeant. does that limit his ability to sell and get out of positions which may look bad and may look like they are getting worse his hands are tied? >> excellent point, harvard hottie, yes. >> so demeaning what you just did. >> coming up next, we've got the final trades. stay tuned. here at the td ameritrade trader group, they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much?

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time for the final trade as guy tries to remember his final trade. >> oln, olin corp, potential m & a in the space that will evaluate. i'm long. >> b.k.? >> for me it's gld. in this environment you buy it and when you're done buying it you buy again. >> karen? >> you know, i like what i own. i want to own it. the market has gone up a lot so buy some s&p puts, volatility index way down, protect your

portfolio. >> guy? >> fun show, fun show. expedia, analysts said enough good things. stocks did not react but will tomorrow to the upside. >> all right. i'm melissa lee. see you back here tomorrow at 5:00 for more "fast money." meantime, "mad money" with jim cramer starts right now. 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 "mad money." welcome to cramerica. other people want to make friends, i'm just trying to make you some money. my job is not just to entertain you, but to educate you, so call me at 1-800-743-cnbc or tweet me @jimcramer. you know what i like about this federal reserve? they seem the to recognize that their job is to take action only when it's really