people about whether or not sumner redstone was aware of what was going on. back over to you. >> thanks so much, julia. the latest on that saga, of course. carol, mike, thank you guys for your time. >> go blackhawks and rangers. >> and warriors, an kobe, everybody. that does it for us. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa least. our traders on the desk are pete najarian, tim seymour, dan nathan and guy adami. tonight on "fast" make or break time for stocks. the one area of the market that could send the s&p soaring to new all-time highs. that's the chart you've got to see. plus, is this the first real image of what could be the long-awaited apple car? it is a series of tweets and photos that are burning up the internet. we've got all the details. later, the scathing report on how valeant was built to fair has the streak talking all. was the ceo's wealth just smoke and mirrors. all the major indices closing at

their highest level of the years. with today's gains the dow has wiped out all of are its 2015 losses, amend here's what was really interesting. we're starting to see a rotation out of so-called safety trades, utilities, consumer staples, telecom, money going today into industrials and discretionary, technology. guy adami, a good sign for this rally. >> all started last night. tim will speak to this. the china numbers were good enough. people are looking for the lesser of good, looking for quasi-disastrous and they good to somewhat pretty encouraging, i would say. jpmorgan earnings. this is what's interesting about it, right? profit down 7% year over year but if you look at stock last may jpmorgan was probably about 7% higher than it currently is right now and the is is probably exactly where it was this time last april/may so the math at a certain point does work. i thought it gave people the green light to say you know what, valuations make sense. clearly through the levels that i thought it would stop at the

s&p 2025678 the only bogey out there, if you're bullish, is what could possibly happen in the meeting on sunday. >> opec meeting you're talking about. >> so for financials, let's connect the dots. jpmorgan was good or good enough. sent the bank stocks rallying. banks the biggest sector in the s&p 500. we see that translates into gains on the s&p and see this rotation on top of that. we see money coming out of gold today. we see money going into small caps, into transports. these are all bullish signs, dan. >> all bullish signs. they doubled the performance of the s&p. banks finally participating and more importantly in europe you had the euro bank index up almost 7% so there was a lot of this stuff. gold is off, u.s. teleco off. where jpmorgan was trading a year ago, the 400-day moving average, not something quoted too frequently. >> which means we might be grasping for something but keep going. >> no, but it's like there's a lot of people who want to call victory here now that the s&p is it 2% from the all-time highs

made last year. you know what the 400-day moving average of the s&p 500, 2035, 2% lower than where we are right now hand in that time period we've had two massive selloffs where people, even the staunchest bulls were running for the hills. >> what's the significance of going 400 over 200-day moving average? >> significance over the run we've had over the last seven years with basically zero interest rates here, negative interest rates on $7 trillion on sovereign debt. hold hon. >> are you done? >> i'm not actually. >> keep talking for the rest of the show. >> i could do. >> tim, talk. >> waiting for my shot. >> go, go. >> again, first of all, i don't care myself the staunchest of the bulls is running from the hills is not something i've been doing or a lot of people and think about where the markets have come and where today's trade was, china was weather and banks were better and china was nowhere near as bad as it was painted back in january or even august of last year when people were worried about the currency. as far as the banks are

concerned, i think, again, you can't have it both ways where in an environment if the dollar is weaker, it takes a lot of pressure off of credit. it actually brings a lot of commodity shares back and that in and of itself is good for banks, but if the dollar is stronger and the fed is back in the fold, commodities are probably telling you there's inflation and means that the world is actually a better place and banks should be doing better as well. even though i was not saying go buy banks over the last couple of weeks it's very clear that either way as we said perception in the banking sector was way too low coming into today. that's very good, aunltd being a pro i think it obviously sets up for markets that now look very interesting because in fact you have retraced that entire move downlower and technically you've actually put in a lot of very interesting charts, a lot of key stocks, things like fedex, a lot of emerging markets companies and risk assets have now broken well through the highs of this last range and that sets up technically very bullishly. >> today's action enough to finally believe that this rally that everybody wanted to doubt?

>> i think -- i think you would point to what really reacted and what really reacted? look at financials, jpmorgan, jamie dimon, very solid quarter in terms of that and march much better. look at the financials and we talked about that for a long time and look at areas that trade very, very inexpensively. we understand why and they have a challenging environment and the yield curve has not been there for, one rate hike. will we get one or two others the rest of the year? likely especially what we've heard, lower for longer obviously but we'll see some of the hikes, but you look at financials and the reaction today. people have been starving for something in the financials to be positive. they got it. sentiment what is awful. you and i talked about tobias from citi talking about how uflt sentiment was. one of the reasons. great liquidity and jamie sdimon hit on that as well and talked about unbelievable how much liquidity they have at the big bank. >> for the banks this is all good and how about the action we saw today in the industrials and

consumer discretionary? is this good news? >> rotation which is great news. i want to see the rotation. i like what we're seeing out of the tech trade as well. you look at microsoft and cisco. there are names right now with plenty of room to the upside. cisco in my mind literally is one of the stocks that's not that far away from being -- we talked about this. >> you bought this today in. >> i did. i think this has $10 of runway over it and the reason i think that this is somethinging up just like microsoft did, transition in place, moving along well and i think tech is the place to be. >> what's the date today, wednesday? i get confused. monday, juniper pre-announced, stock got whacked and we talked about if on the desk and said, listen. you see a selloff. >> you talked. >> well, we all did, and basically got a little bit, didn't really happen that much and it was an opportunity and yesterday you saw what happened to juniper i thought flushed out and that stock was up nicely today as well. juniper specific. >> that was the final trade. >> the fact that it was barely

down, down just 1%. you didn't even have time to be able to buy it before it started moving up in positive territory. >> jpmorgan, a number of big banks are getting set to report tomorrow so could the rally in financials be the real key to the market's next moves? let's go off the charts with the chief market technician at mkm partners. what are you looking at? >> financials are very important, the second biggest weighting in the market, about 15% so we need to pay attention to what's going on and the reason they are also important, the worst performing sector year-to-date, down 4% and the s&p is actually positive on the year so if you're bullish and think the market will take the next leg higher, the obvious trade would be to see the financials actually rally and that would potentially the s&ps move higher so what we're looking at here is the bkx banking index with a big multi-year top and broke down the beginning of the year and it's now rebounded right back to where it broke down from, and i think what's interesting is relative to the market so there's relative ratio of the bank index to the s&p and

actually bottomed at the exact same level that it did back in 2011. i think that's significant. not necessarily huge bulls on the financials. the overall trend is actually pretty bad but i think there's enough there to get a move back to the declining 200-day moving average which could be enough of a catalyst to get the s&p a little bit higher. interesting, you talked about this rotation we're seeing in the market. as the financials, some of the cyclicals have rallies, the defenses have actually pulled back over the last couple of weeks, and as a result the markets literally have gone sideways for about two weeks and what's really interesting is now the bollinger bands, a measure of relative volatility, at the lowest levels we've seen since back in august before the breakdown. now, it's interesting about the narrowing. it doesn't tell you which way the market is going to go. just tells you that it's not going to stay in this range so it's probably going to move one direction or the other. we mentioned the financials could be the catalyst. we're right at the downtrend line from the 2015 highs and actually closed right above it

today. so while we're not hugely bullish here, if we get a real in the financials, that problem gets you back to those old highs around 21100 and 2130 and that's how we play it here. >> jonathan, thank you. 2100, 2130. guy? >> bollinger bands are hauntingly familiar. people talk about the vix, i'm sure, but acts vix gets closer to 13, that has been a level where the market has sold o.now, in you remember, i think it was april 1st, the vix traded down to 13 or so, and you did see a little bit of a selloff that got vix back to a 17 handle, and it's grinded back down. bollinger bands, virks dal what you want, but it's at levels that indicate that maybe something is about to happen in the short term, at least. >> yeah. i actually don't think a whole heck of a lot will happen. we'll get back to 1950 or 1900, you know, listen, remember how we traded for most of last year and i expect the late spring and early summer to be fairly quiet

and if you're staring at the vix tries to get the entry point on the short trade it's probably wrong in my opinion. >> breaking news on the zika virus. cnbc's sue herera is in the newsroom. >> reporter: the centers for disease control, the cdc what, we suspected is absolutely true. they say that the zika virus is the cause of severe birth defects microcephaly in particular and other brain abnormalities in babies. this comes as a result of several articles that were analyzed by the cdc, not just one specific piece of evidence and tom freeden, the head of the cdc says it's, quote, now clear that the cdc has concluded that the zika virus does cause microcephaly. there is not any doubt that zika causing microself-ly. never before in history has a bite from a mosquito been seen as a cause of birth defects according to dr. frieden so what

everybody suspected has been confirmed that microcephaly is caused from the mosquito bite. >> sue, thank you. up next, is this the first real image of the long-awaited apple car? it is a photo that's absolutely burning up the internet and it could have hugismcations for apple share 40e8ders. we've got the details and facebook you be veiling a slew of new products in order to capitalize on virtual reality so why did the stock sit out the real and the author of an exclusive report that said valeant was supposed to fail from the start. was it all smoke and mirrors? more "fast money" right after this.

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apple car. tim, what do you think? >> i hope it looks cooler than in a. >> what's wrong with that? >> really disappointing. not a car that i'm saving. dan would probably drive that, but, look, i have no idea. i think the bud we've had around this, a guys are a couple more into this and could this sneak out and the speculation is as good as mine? what does this mean for the stock? in fact, a lot of people have expressed i want the apple spending time on the industrial side of the auto industry is a scary thing overall for the business model and obviously for margins so right here and now i'm not going to comment on something i know nothing about other than to say that this is not a reason to go out and buy apple. >> i wasn't quick enough. but was there a steering wheel inside that car? >> as opposed to. >> if there were not, it could be a driverless car. >> it's fantastic. >> dan? >> i agree with tim. here's a company with 40%

margins here, and if you're going to get into the auto space. listen, plenty of opportunity as far as the technology is concerned when you look at the new model three and you look at what's on the dash, it's technology and apple has an amazing opportunity i think in that car and whatever they come out will look like anything motor trend is tweeting right now. i think that's a bunch of nonsense but i would be concerned if that is a big piece of news at some point in the next year or so because it does mean a repositioning of this company in a direction away from personal care. >> seems like there would be a big difference between owning the dashboard and actually coming out with a car and being on the hook for assembling a car. i mean, we see what's going on with tesla. they have got a great vehicle. >> they can't deliver them. >> and difficult to execute and apple is not a car company. >> i've never been on board with the idea they would build their own car. >> software and technology. >> and place it into somebody whether it's bmw or tesla. it would make a lot of sense to me that that could really propel

them and add to everything else that they are dork the ecosystem. getting into the home and getting to absolutely every part of our lives, and that's part of what's really building apple right now. as people concern themselves with the phone, it's the ecosystem that's the growth driver for apple. >> agree with everything everybody just said. how long is this show? nine and a half years, give or take-ish. >> so long. when have we ever mentioned most trend over that time. >> >> every week. >> never is the answer. >> except when you're talking about your iroc z with the louvers. >> my point is this. they made themselves relevant for a day. ever think of that? >> it's just a ruse. >> i like that. >> let's talk about trading the stock. >> yeah, let's do that. >> if you look at the chart on apple, very interesting. today traded up through the 200-day, peaked above their back at november 3rd, but if you look at the stock it hasn't traded through the 200-day to the upsid since august of 2013 with the exception of this event in november, so either the stock really has room to now pull back after a fantastic run, or,

again, apple after a lot of consolidation, a lot of expectation and really understanding that the march quarter is going to be down year over year on shipments, maybe sentiment has caught up with the reality of the stock price. >> i don't disagree with that, and i know a lot of guys have gotten into a thing where you can buy it for the second half for the new phone or whatever. >> yeah. >> this may be a very telling thing. there's been some early reports that the iphone 7 may have the same form factor as the of and if that's the case, innovation on the smartphone is dead for a while. we know it's dead as far as tablets are concerned. >> but does innovation matter that much? >> it does matter because this is a product drive company? >> you don't agree. >> i don't agree and the reason i say that is the 7 will be different in some fashion. we'll see something different. >> the growth overseas is still at a ridiculous level. i know tim is the em guy so he knows better than me. india is an absolutely unbelievable opportunity and not just for the phone.

the phone is a beginning of it. a 22% market share in the smartphone world in india right now. wait until that goes to 10%. all those others, the 8% that is comes in there. they are going to be part of the ecosystem which drives the money. >> the people who sell phones, smartphones in india right now, the other 98% market share, do you know what their margins are on the phones that they sell there? they are probably literally single digits so this is a company, apple, a 45% gross margin on their smartphone. maybe india is not going to be the market because there's nobody to buy an $800 phone. >> why? >> look at what's going on in china. >> they will be buying the car and coming off a very low base. think about it. they had single digit market share there, and you know how much an iphone costs in china? costs 13%, 14% of the annual household. >> the largest market share. >> it's outpacing all the chinese brands and outpacing now and overcome samsung's lead. cell phone penetration is 14%. >> okay.

>> so much -- >> have a runway for a few years and then you'll have massive emerging. >> a couple of trades. >> i've got plenty of room to run. >> the stock went down 45% from its highs about a year ago, you know what i mean, so there are pitfalls here. >> you think the market doesn't understand that the u.s. market has changed and is somewhat saturated and actually if anything around here apple will not have the kind of growth on the 7 that they had in the 6. that's in the price. ultimately-hour in a place where people are looking around the world saying we've seen them adapt in china and know what per capita income is and know they can't afford it and somehow they are buying if. >> interesting to see what the motor trend story is tomorrow, by the way. >> i'm going to be tuned in. >> what story? >> "car & driver, request the "guy. >> go the field & stream." >> mark sukeberg putting the future of facebook on display taking the wraps off the virtual reality products. i'm melissa lee. you're watching cnbc, first in

business worldwide. here what else is coming up on fast. >> be very, very quiet. i'm hunting rabbit. >> yeah. we hear you, elmer, and while stocks may be nearing all-time highs, we're going value hunting for some of the cheapest buys in the best performing sectors. plus. >> at my signal, unleash hell. >> and someone is doing just that. the author of the scathing report that claims valeant was built to explode. it's got all of wall street talking, and we'll sit down with the man behind it. much more "fast money" right after this. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t.

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welcome back to "fast money." seagate reporting q3 preliminary numbers and expects to report revenue of approximately $2.6 billion and non-gap growth margins of approximately 23% for the third quarter of 2016, primarily driven by reduced demand for hdd enterprise products. comments from the ceo and the press release were not too reassuring. steve luxe saying we're disappointed we did not anticipate the weaker demand in the march quarter. there are many complex issues impacting the traditional go-to market channels in our market which are reducing our forecast and visibility. we know that the storage

industry in general has been a challenging time due in part to the demand in pcs. back to you. >> all right. thank you very much. seema mody. hard disc drive. is there a trade? is this worth a look in this commodity space, guy? >> you just said that's the word. it's becoming commoditized. these numbers indicate that, and toys funny, just trying to figure out when he did that. jim chanos in the middle of 2014 came out with a pretty big short call on seagate and western dig. through right in his face. if you look 2015 was a disastrous name for this year and 2016 hasn't gotten much better. valuation is cheap, but when things are modtized valuations are get a lot cheaper. would i still stay away. >> the big question would be is western digital now the next target or not? because they compete so much so you start to wonder, but you lock at valuation, western dij has already taken a hit. hit after hit after hit, so is there more upside if you wanted

to be in the space at all. i think i'd rather be in western dig. >> down 53% over the past 12 months. >> and the valuations get to a place where, parah, not so expensive, but really could get a lot cheaper. i don't see anything about it, first of all, and the actual positive, big deal. >> seagate, the stock down here, an 8% dividend yield. >> 8% dividend yield. >> and cash flow say live and well. here's the other takeaway. you mentioned juniper before. juniper cited enterprise demand. ibm is going to be monday night. >> uh-oh. >> you worried about cisco? >> no, no. >> enterprise demand? >> do i look worried. >> you don't. >> he actually does. >> worried isn't the word. >> yeah. >> panicked maybe. >> just weird. >> i have feelings. >> i'm not making fun of you. you just don't look worried. meantime, let's talk facebook kick off day two of its developers conference where the company showed off everything

from chatbots to virtual reality. >> reporter: we're here at the conference and in focus artificial reality and virtual reality and the facebook ceo took the stage here to showcase how these are not far-flung technologies but actually core to facebook's growth. >> another experiment we've been trying is the virtual selfie cam. >> all right. >>. >> reporter: today's keynote, the first real demo of social vr showing him and a friend who is back at facebook headquarters hanging out in a virtual space teleporting to london and taking a photo with a virtual selfie stick and then sharing it on facebook. as you heard the crowd went wild. he also explained when facebook is investing so much in artificial intelligence revealing there's 6 million predictions per second across

facebook's ai blast form for the likes of prioritizing what you see in your news feed and to give people more access to the news feed facebook unveiled two new efforts. taragraph for urban areas, cheaper than fiber and orries is an experimental way to make radio spectrum more efficient. that will help out rural areas. may be surprising that facebook is working on all of these really high-tech solutions, but, in fact, it's actually doubling down in the space. just today facebook announced it's hiring regina dugan over from google. before that she worked at darpa and here at facebook she will head up a new r & d group focusing specifically on hardware. melissa? >> joortsin, thank you. a lot of fascinating developments. the stock sat out this rally today. seems like there's i don't want to say skepticism but the stock is up 31%, more than that for the past 12 months so it's been a real winner here. what do you think, tim?

>> look at what's going hon in the entire space. facebook is probably less attractive of a valuation if i'm comparing it vis-a-vis google or some of the other f.a.in. g. stocks if that's what we're talking about, nothing about not participating in a snap back rally. facebook trades appropriately. not a cheap stock, but i think it's been shown that actually it's high skwault and high growth and poem are actually keeping it in the game. >> have an idea of what the future revenue streams may be, maybe even more so with apple. >> messenger is huge, what'sapp? >> the other day we did facebook video. >> we had 900,000 views on that, and did a can probably speak to that. >> probably. >> well, it's a huge area of growth for them. >> let's hope. >> i don't think facebook is that ridiculously expenseive. >> it is on a gap basis, trades like 55 times. listen, it is -- it's crazy expensive and trades at 15 times sales, one of the biggest companies in the world. yes, it's growing amazingly.

showed us amazing products and things like that. would i take the conversation of tim if you're going to give me the floor for the rest of the show. >> we'll take it whether i'm going to give it to you or not. >> make sure you get to the 400-day because that's going to be important. >> i don't think anybody should be too surprised that mark zucberg just laid out ten years of a lot of amazing products and stuff like that. >> what you should be surprised at. what is google doing in messengering apps and video? they have youtube but do they have platform for live streaming and stuff like that. google really on the product front, where are they and what are they doing? financial engineering, brought in a cfo from wall street. i think google has to get going on the product front. >> the bottom line goingp on the sidelines when it comes to products and facebook is teams pensive even though it has exciting products. >> those are my guidelines. >> what product does google need? have a search business and cash flow business.

that's what people wanted to see. >> pete, come in. >> forget the valuation for a moment on facebook. i real ease it's high but its growth rate is absolutely staggering when you look at what they have been able to do in all various areas and when you look at the acquisitions they have made you can understand why he's got this ten-year horizon. wait until vr hits. i think we all understand how virtual reality works with oculus. 2 billion is what they paid. wait until you see returns on that payment. there's so many platforms that they are building. it will be absolutely incredible. guy can visit italy sitting in his own living room. >> going to be incredible. >> or can have a bottle of wine when he gets home. >> it's the ecosystem. coming up, with the s&p hovering 2% from all-time highs, where can you find the best value? cheap stocks and hot sectors that can make you big money and tech billionaire shaun parker is putting hundreds of millions to

work for his next parker. we'll get the details from the napster founder himself right after this break. ? you is

welcome back to "fast money." big rally on the street today. all three of the major indices jumping 1% and closing at the highs of the year. the dow is up just about 190 points, officially erasing all of its losses for 2015. the s&p 500 closing at its highest level since december 4th with financials and tech the two best performing sectors today. here's what's coming up in the second half of "fast money." a shocking article on valeant's outgoing ceo michael pearson has everyone on wall street talking. is he the only one to blame for the company's implosion? we've got the details. plus, small caps and big problems. the russell 2000 was up more than 2% today but one trader is making a $13 million bet against the rally. we'll explain why later this hour. first, we start off with the markets because if you're searching for value out there, you might want to look no further than utilities, consumer staples and even tech. they are among the best performing sectors in the last

year and interestingly a number of their stocks are cheap relative to their peers. breaking it all down is a man always performing and never cheap, cnbc he's dom chu. hi, dom. >> i think you're being too kind so i'll view myself as a fine automobile. but all kidding aside, let's take a look at the top performing sectors in the s&p 500 over the last 12 months. as you would expect, dividend-paying stocks really topped the list. let's kicked it off with the utility stocks. they may have had a rough day today, but still up around 10% over the last one-year period. now on a relative basis, there are still stocks that trade at a discount to the overall sector despite the run. take a look at say a duke energy or a con-ed, consolidated edison there. another top performer, what about the consumer staples stocks, packaged food and cleaning supplies and the new sector and even thought the sector is up nearly 7% and some stocks like tyson food and

walmart still trade at a discount as you can see to the overall sector and let's toss in technology just for some giggles here. it's not known for dividends per se, but it has still managed to gain 6% over the last year, and it's the biggest sector of them all so it's important. stocks like big blue, ibm, apple, the biggest one of them out there. they still trade a discount of the overall sector. of course, melissa, there are probably reasons why many of these stocks do trade at discounts. now that's about whether or not the investment thesis overall for traders has changed for the positive as opposed to what it has been for some of these guys. back over to you guys, melissa. >> thank you, dom chu. >> let's talk about these. are they cheap for a reason or are they buys, guy? >> dom does great work. ran out because he probably had a golf ball or something. target is actually cheaper than walmart. >> giddy-up. >> brian cornell is the man. >> look at the move target has had over the last couple of weeks. it had a magnificent move.

what's happening now? it's but thing us within a whisper. shrug off all the credit card and things they got themselves in trouble with a year and a half, two years ago. a name he didn't mention target is the one worth mentioning. >> did mention more than he did. good point by you. >> laughed at ibm and the multiple to a point where, i mean, i don't think being cheap means undervalued. it means that obviously that's cheap for a reason n.apple's case this is an issue with the stock. people feel that the multiples should be higher hand this is probably dan's argument. this is a company that's not giving you the kind of growth and if anything it's a free cash flow machine. apple at that kind of a discount is the most interesting of the names we've mentioned and finally walmart looks expensive here and i think that's been defensive and why it's expenseive. >> stick to valuations. highs in 2016 quickly closing in on all-time highs. are they the best place to put

your money? senior global equities strategist. thanks for joining us. >> sure, melissa. >> you say your year-end target is between 2000 and 2100. just coming up at the top end of your range. more inclined to stick to the range staying stocks will just bang around in here or actually raise the upper end of your target? >> well, while i think that for right now the market is in a little bit of a consolidation phase with a slight upward bias, the top end at 21100 of our target range. that's a conservative number, melissa, so it would not surprise me hat all if we traded -- we traded above that. we've been telling our clients that's a conservative number, and i think that if a few things come together which they are really coming together right now certainly since the february 11th low, you know, that target is going to look conservative. >> okay. so where do you see -- i mean, where should the market be valued at this point? if you say 2100 is conservative and on the s&p 500 we're at 18

or so, where should that be? >> well, i think that you're going to see some more upside. right now if you look -- if you look at the 30-year meeting and operating earnings, you know, you're looking at about a 16.7. you could trade a multiple higher than that a little bit more. you're not going to push this thing. you have to throw the old fed model out the window because, you know, we're not going to see that kind of relationship build, but to be a pe, a handle or even two above the longer term median would not be a surprise at aufrmt all sneed a little bit of confidence to build and from a retail investor's standpoint which, of course, is the bread and butter here of wells fargo advisers, you know, they have been afraid. they haven't been confident. >> right. >> they have been sitting on their hands, but if you see just a little bit of confidence bill. you see a little bit of money come into the market and you'll see a little bit more, a little bit less reluctance to push that

multiple just a little bit higher. >> started to see a glimmer today, scott in, terms of the sector outperformance in today's market. consumer technology and industrials, they all did well, those are the sectors, i should say, you're overweight for the next 9 to 12 months. does this mean the bunker sectors that people are hiding out, utilities, telecom, consumer staples, are those not the place to be right now? do you get mouth? >> those are not the place to be and, you know, our clients, we've been telling them and this is not just from the downturn, telling them this for a couple of years is we do not want them to hide. we want them to be more assertive. we want them to be in sectors that are more sensitive to the ebb and flow of the economy and the sectors that you see that have outperformed since the february 11 lows, they have been all the cyclical sectors, and i think that that's the type of pattern that you could expect going forward over the next few quarters and through the end of the year. we do not absolutely want our

clients hiding in staples, hiding in telecom and hiding in utilities, that's the very opposite of what we want them to do. >> scott, thanks a lot for joining us. >> all right. if he's saying don't hide. what does that mean for the bond trade, guy? >> i think the bond trade is still alive and well. >> so you cannot hide out and still have a bid higher for bonds? >> there's clearly something going -- forget about the s&p for a second. >> okay. >> there's clearly something going on still with the bond market and the gold market. s&p aside, so i think you can be -- clearly you can be in both. that's been the right trade over the last few months. >> industrials, where should we be? >> caterpillar looked very interesting. absolutely lagged the entire industrial trade. i'm not telling you that china got better last night for good. i'm telling you that the data, if anything, has been trading sideways and some of the data is looking better. one thing i don't agree with is telling people to run in and chase some of the industrial names.

the names have done the best since february 11th are the names being priced to put out of business and these stocks run 30%, 40%, 50% and to say things have suddenly changed and you would chase the stocks, we're getting equilibrium back. nice to see financials and health care get back in and that's where you stay. >> i think this will be a slompingt talked about china data overnight and european data saying industrial production at an 18-month growth. we have a world where there is no growth and to me i think that there's going to be pockets of opportunity to catch the trades. i don't think you want to chase the things being priced forever bankruptcy. let's remember people just got a big bankruptcy in peabody energy in the gold space. we're likely to see more of the stresses in the credit market and the question sw whether they all bundle up together like we saw last summer or like we saw in january, february. >> still ahead, deep inside the valeant implosion. did all of its problems start at

the top? an article in "forbes" about outgoing ceo will join us after the break with all the details. why is one trader betting millions that small caps space is about to collapse? we'll explain after this break.

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welcome back to "fast money." many considered valeant ceo michael pearson to be the second coming of warren buffett when the stock climbed to historic levels but everything from a dui to personal investigations led to the downfall. nathan vardy, author of a piece in "forbes" joins us. if you haven't read, it it's fascinating. good to have you with us. >> thanks for having me. >> everything about this guy you call into question, amazing, his wealth, who he was even married to. >> yeah, the tone at the top as the company likes to say wasn't so wonderful, and -- and, you know, when we called around and started asking questions, you know, we learned a little bit more about the guy who is driving this train for this company that's now a train wreck and we thought it would be interesting to know ma little bit more about what was going on in his life while this train

wreck was happening and what was motivating him to drive the train at the speeds he's driving it at, and -- and, you know, it's a train, wreck, it's a stock market train wrefnlgt the stock is down 90%, $80 billion. valuation has been wiped away and a lot of people think it was a public policy train wreck, raising drug prize, moving your headquarters offshore for tax reasons and to canada and cutting research and developments and who was this guy. >> walk us through some of the examples in case people haven't read the article and, again, i urge you to read the article. for instance, he donated money to duke. did he have the money? >> he didn't have the money because one of the big things about valeant that all the hedge funds and investors were excited about, a shareholder compensation friendly plan. part of that was the stock was

locked up and couldn't sell it. he borrowed money against the stock which was not allowed by the company and the board waived its policy to allow him to borrow the money and gave the money in 2014 to duke on behalf of him and his wife were elected as two of the most prominent alums at the school. the problem is they were going through divorce proceedings at the time. they were not a happily married couple and then when the stock started to plummet in 2015 the lender goldman sachs called the loan and sold the shares and that spooked the market further, so the whole thing kind of looks like a mirage now. >> yeah. >> you know, the nice donation and -- and the stock price and so forth. >> would i have shade that's partly to burnish his reputation on the street amongst investors. how much of what you reported, how much is that known to any of the share holders? how much of it was that mike pierson was hiding these things and concealing them and doing a pretty good job of it?

>> i'm not sure these things were well known but behind the scenes these are things that i've learned over the last few weeks people were talking about, you know. they were talking about what was going on with his life, his behavior. things that short sellers would definitely whisper about and then, you know, the question is what did the board know and what was the board's reaction? >> i mean, that would be a critical question because if the board knew about any sort of this reckless behavior, perhaps even concealing of the truth in some parts of this story they are on the hook, right senator what indications are you getting right now about what knew what? >> well, you know, he had -- we know that at least he had one investor that we spoke to and notified about concern and, you know, that board member we were told, you know, told another board member. whether that was shared with the wider board, we don't know, and this was pertaining to concerns about his alcohol consumption. >> right. >> and, you know, those are questions for the board and we

asked them and, you know, thissy said that they didn't want to answer questions related to mike pierson's personal behavior and that's what we know right now. >> we have no time left, nathan. did you get the sense that you're piecing together a picture of a man who is flying too close to the sun? >> yes, and i think he was incentivized by his compensation plan to do that and that's what we really get at story and talking to people in the last few days, people close to the company are conceding the hurdles that were built into this compensation plan were astronomic, you know. 45% annual returns and you get three times the amount of stock, and that really drove them to, you know, be very aggressive on raising prices on drugs, on cutting staff and cutting research and development and, you know, i think that was part of problem here. >> nathan, thanks so much for coming by. appreciate t.nathan vardi, senior editor at "forbes." i mean, this is just -- >> nice icarus reference by you.

>> i try. >> hauntingly familiar to enron and chesapeake and the donation to duke, aubrey mcclendon a huge donation. very interesting similarities. >> and the work that nathan has done is really fascinating except a lot of things we're criticizing are things that investors loved on this company and the reason he's aggressive and cutting costs. it was an acquisition model >> right. >> and who cares if the company is cranking up drug prize, so, i mean, let's -- as investors, you know, are you about investing with nobility or about investing to make money? >> right. >> and i think that's really the question. >> and don't tell me that major investors like a bill ackman did not know about the compensation plan. >> he tout it had. >> he tout it had, exactly. >> still ahead, small-cap stocks surging, but could it actually be a bad sign for the markets? what has traders so worried right after this break. you're watching "fast money," first in business worldwide.

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that's like my grandma the kcooked, my mom cooked. i make a lot of banana bread because the baby likes bananas. (laughs) whatever home means to you, we'll help you find it. zillow.

do you have the courage to stay up all night? because this is our time! the greatest tv week of our lives! ladies and gentlemen, in the business of binge-watching, sleep is for the week! so i want you ready to order takeout, every single night! now are you with me? to awesomeness! to watchathon!! big is back. xfinity watchathon week starts april 18. the greatest collection of shows free with xfinity on demand. are. welcome back to "fast money." traders making big bets against the small caps. dan at the smart board with the action. >> in the iwm, trader rolling up and out a put spread selling 90,000 of the may 106-36 put spreads and buying to open

90,000 of the june 108-98 put spreads paying $1.50. $13 million and breaks even at 106.50 on june expiration and can make up to $75 million if the uwm is down at the lower end on june expiration. i want to make one point when you see that rolling action. it's likely a hedge against a follow of small-cap stock. go to the two-year chart and lock at the downtrend right at the 200-day moving average. maybe they think it's hit resistance. >> for more options action full show friday at 5:30 p.m. eastern here on cnbc. up next final trade. king 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 and 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. td ameritrade.

time for the final trade. around the horn we go. pete najarian? >> happy birthday to my daughter alexis, 22 today. giddy-up, sister. >> mice. >> steve wynn bought another 72,000 shares yesterday in wynn, wynn is going higher. giddy-up. >> tim? >> big-cap china, baba the one to play. >> dan? >> ibm, small caps on the seller here. >> raise your hockey, sister.

>> playoff hockey, ranger, tune in. >> final trade? >> cisco. >> that's it. >> three giddy-ups. >> go rangers. >> i'm melissa lee. thanks so much for watching. see you back here tomorrow at 5:00. meantime, do not go anywhere. 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. 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 isn't just to entertain but to teach and put it in context. call me at 1-800-743-cnbc. or tweet me @jimcramer. for almost a year now we have experienced a ferocious phenomenon, the one i call the rolling bear