tv Fast Money CNBC February 27, 2017 5:00pm-6:01pm EST
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then when you see here, the 12th record close since 1987. i said it was 13 record closes. no, no. it was 12. we have now tied that. it is a long story. thank you for tuning many. "fast money" starts now. er tonight on "fast," goldman sachs says tesla could tank more than 25% in six months and called the company hype. plus, a stunning bet on apple. and it has even the bears throwing in the towel. and later, our own bitcoin bug.
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we take a peek at the president. it could add even more fuel to the rally. >> the presidenter outlined two big spending opportunities. he is talking about infrastructure and defense spending. he made a speech. he highlighted some of the infrastructure around you guys in new york city. he said when you drive under the tunnels in new york city, it is a little bit scary because you feel like things will fall off the kriel on to your car. >> we have to fix our infrastructure. it is not like we have a choice. we have no choice. and it means jobs which is a good they know. >> other big priority is defense spending. take a look at the numbers of where their budget is headed. this is just a plimt look. they're outlien ning for us.
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they expect to spend $603 billion on defense on. nondefense, 462 billion. that's a cut. their going to zero out all those spending increases. net/net about, the same in terms of the deficit from where it was last year. but no specifics from the white house in terms of what they want to cut. and you know that all those spending programs have champions and advocates on the capitol hill. you can imagine big fight will break out in wash with people trying to protect that spending. >> eamon javers, thank you. a little more clarity on the speech tomorrow night. help or hurt this rally? this could be the most detailed glimpse. we have donald trump's policy proposals. >> my instinct would be it will hurt the rally. that's been my instincts for
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quite a while. people alongside and it the market will react like it did today. we've been talking about defense stocks for quite some time. we said lockheed martin will have some hiccups today. boeing, all time high today. tim has been on this steel they know. u.s. steel, upgraded in the aftermarket for all the reasons we've said for months. doiss he will then market? yeah. do i. do i think she? that's an entirely different conversation. >> it won't go so well, i think. i agree with you. the bottom celiwill be aggressi hard. fiscal policy. you talk about that. people have been expecting this to be pushed back toward 2018, or 2017 at best.
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it will be interesting to see if it gets pushed. they've been ones you've had your spots. these things gap down in 3% and 5% moves. a lot of them look like lowerize. i believe the bigger picture is right on. i think fiscal is not what i expect. >> what is your gut feel, karen? more detail good or bad for stocks? >> i think more detail would be good but i don't think we'll see as much detail as we would like. he's had such successful throwing out superlatives with not a lot of numbers around them. it's possible. not quite that spectacular. they head to the $54 increase in military spending. that's very specific.
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military stocks. the $54 billion and where it comes from, we don't know yet. er i've been buying protection, lose go money every time i do it but i still want to do it. it helps me sleep and stay long. >> while we did see a new high in the stock market today, when you look at the other markets, the dollar and bonds, they didn't really react the way you might think if there's a big infrastructure spend coming. >> connect the dots for us. >> you would think if you're going to have a big infrastructure spending. you'll get more jobs as president trump talked about. here rates. here rates will lead to a hire dollar. you would think those things would react. bonds were basically flat, down a little bit. not anywhere close to what we were expecting. i don't think we'll get it. we need an awful lot more detail.
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the half light of this talk is just diminishing by the day. >> let's say the speech is an hour. i don't know how long it will be. an hour. do you think he can speak for an hour and not give us any he details? >> oh, yeah. he spoke for six months. >> he would be speaking specifically about a very complicated subject. it is something really, really he excellent, quote unquote. >> speaking in platitudes effectively got the man elected. that's great. sense his inauguration, that's all i've really heard. who knew this health care would be so complicated? that's not me saying it. that's the president of the united states. the point is, i'm with karen. vix was up today. in wait go for it, what will happen tomorrow? if that speech is okay, right back to 11 tomorrow. >> anyone who sells the sell the
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market on vague detail. i think more of the same will give people exactly what they want. i go back to a change in administration, a change in focus, a challenge in regulation. cut go the epa is a perfect example of places where i think there's been an enormous amount of spending. i'll not taking a view on this. people can see a new sheriff in town and it is a very different approach. for at least the sectors that you want to see rally, it doesn't matter. behind the scenes, whether it is tax plans being different, i don't care. they'll get a deal done because they have to. they won't get done again. the health care thing. they were supposed to have a different plan. >> he said mid-march.
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it's not mid-march yet. he's not late. >> think about what you got the w the last administration. we would have taxes go up immediately. >> a huge rally in the market. the market has rallied because we thought we would get this done. my contention is that the market rallied so hard, not just because of trump but also a republican congress and we be able to get everything through. the more tension you see there and the less they get done, which we know how it always worked. then the market has overpriced successful. >> let's keep going on health care. talk about his budget, president trump met with a number of health insurance ceos. after talk about the troubles face go the u.s. health care system. >> i have to tell you. it is an unbelievably complex subject. nobody knew that health care could be so complicated. and statute orly, we have to do health care before we do the tax cut. >> despite all the political
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scrutiny, health care remains the second best sector this year. next guest says there are more gains to come. carter? >> sure. obviously this is a little bit of the dos frgs from last year become go the darrels of this year. i have every sector. we have frye energy on to that and so forth. here we are, health care only to be down. but what is happened is the change this year is not just minor. it looks to be the beginning of something quite important. this is opportunity. you have this huge spread over the past 12 months. here it is over the past two years. right? er health care make go no results and mark market upper
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12.5. you only play a lag arrested. a two panel chart. what we know is it broke above and checked back beautifully and ricochetted off. meaning a reversal in trend. most important, it is also broken above its relative down trend line to the market. so it is going up and normal s&p 500. i think there's more to come. okay. just to put this in longer term context, what has happened is the health care sector, the great winner with biotech leading, has made no progress for the better part of three years. no progress in our market is down. we've thrown back into the relative down trend. you will get two or overshoot to the upside. that projects for here prices
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and outperformance for health care. and then my favorite area, biotech. what i have, biotech, ibb, and on the bottom, relative performance to health care. biotech is outperform go health care. that's an ideal set-up. perfecter bearish to bullish reversal. we like health care and we think it keeps going. >> should we invite the chart master over? >> okay. so ibb is an area of strength within health care. how about the other parts? the insurers and the hospitals? >> that's been the strongest of all. if you look at united health, that mean the strongest stock. if you look at some of the big moves at amgen, biotech, it is
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dynamic. there are parts are low beta. biotech is a real opportunity. >> i'm looking at it. i'm watching it today. it was up for you and some odd%. >> when you bring it to the 52-week high, that's a thing. it is bringing out or continuing to bottom out. it is still very young in the going having had such a performance. >> all right. thank you. >> great tie, too. >> very nice. >> united health care to me, it is the most diversified. you have them all growing in mid teams. it is still reasonably
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attractive and it is at all time highs. you are buying a stock that has had a very big run but it seems to be the class of. >> you are in insurance of. >> i am. it has been way less volatile than other side, biotech. i like it here. the market is good. it is good for them as well. it's good. >> ibb. >> i know he talked about the potential to break down. if you go back to the beginning of 2016 or so, it broke down ibb from 350. i think your risk on the downside. >> coming up, a battle for the ages. bk takes on peter schiff in one of the most important questions of our time. which is the better investment? bitcoin or gold?
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plus, back buffett. some very bull he shall comments about the market and one hot down stock in particular. we'll tell you what he said later this hour. is tesla worth the hype? you kno, 90% of the world's largest supercomputers r on intel? th means you can tak universef data - in your case literally - and turn it into medical discoveries, diagnostic breakthroughs... ..roof that blachole collapse into e singarity. i don't know what that is. but yes innovation runs on supercomters... ...a supercomputers run on iel. you are super art. innovation runs on supercomters... and super busy. ♪ ooh! ufo! fae alarm, eyelash!
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♪ have a tion about your brokerage fees. fees what did you he in mind? i n't know. $6.95 per trade? uhhh- d i was wondergif your brokere fers somsort of guaraee? guartee? where can get our fees and commissions back if wre not happy. ask your broker if me at sthey're offerig? what's? $6.95 line equity trades and a satiaction gntee if you don't le their answer, asagain atchwab.
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welcome back. check out shares of tesla sliding more than 4% after goldman sachs downgraded saying shares could fall another 25% in the next six months. t shareholders suffered a major drop in the stock. a friend goldman sachs says is likely to repeat. you see the bands there. pretty reliable. >> he probably remembers the song by public enemy. don't believe the hype. when i think of tesla, they have major risks. financial risks, integration risks. the things about the attacks on the epa. getting at why a lot of people
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are buying the cars. so a choim had 76,000 in total deliveries now next year will be xlaming they'll do significantly more than in the model three. not in the model three. but we're get go development on deliveries in some of the different models. so what is this company, i know, at this point everybody is price in the perfection. >> i agree with the risks. the other risk is momentum risk in the stock. it is a significant fact or. i happened to look back. i think we have a chart. gm versus tesla. for the past year, a dollar in each he is worth within, i think, about 1%. a fascinate go chart. it's interesting that it fees like tesla has had this crazy wild ride. in fact gm for me is a much less
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risky way to go. i like that they're even open to sell the assets. far less risks. >> the thing that's different from the model three, it was designed to be manufactured. it is different from the case of the s which the x. with the assembly line in mind they designed it so they'll be fewer theoretically, eor hang-ups. >> it is very hard. it topped out in 2014. 2015. and effectively, at a point last year. they downgraded the stock to
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sell. they were effectively at a sell. so let's just remember where goldman has been all along. not to disparage goldman sachs. they needed $1.7 billion. i don't know what the number is. it is probably close. and i think they'll go to the equity market. >> i think you buy on any time of capital raise. that's the time to buy. i don't know had a will come but you wait for it. >> so it is trading against that level. and then it goes back up. a week to a month. but it performs pretty well. the stock held exactly where it needed to hold. the bad news is it stopped where the bears needed. >> let's switch gears here. a market flash. the shares are trading much lower. about 10% lower. meg? >> we have a lot of news to
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unpack. the shares trade go down. saying 2017 earnings come in below expectations. they're looking at $6.30 to $6.65. that's versus $7.ten. the cfo is leaving the join another pharmaceutical company. they're starting a search for a permanent cfo. they've named an acting cfo. another piece of news. the company saying it will delay file of its ten k as it works some thins out. it is delaying the 10 k filing. on february 22nd, the independent auditor notified the company that it is looking at the practices. it is not expected to result in a material impact on net cash flows but there can be no
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shurnls they won't need to restate their financial statements there. they expect to file by march 16. now down about 10%. a lot more here. we'll bring you anything else. >> i understand there's no estimate the. they don't know about it. it is a drug that was acquired when they acquired alon. so how far could that go back? >> you're testing me. >> a few years ago. i would guess 2012. >> a lot of it reads horribly. late filing? cfo leading? terrible. a lot of that sounds terrible. however, more nuance. the cfo is going to amgen.
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that kind of addresses that issue. the late filing isn't great. restating the revenue, that's a little dicier. i will should be down. it doesn't make never think, this is the chance. >> this is become go, they've been getting down grade months and months. it is undergoing the launches. on top of that, you have this other stuff going on. i hear you. i'm saying, i think they can go a lot lower. >> this is a complete change in the sweep. the ceo left for valiant. then cfo left. >> you asked, i don't know when it was either.
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this is just me wondering. what does it mean for valiant? does joe papa get brought in? >> you just the don't walk away and have no rackifications. >> one stock has been on a tear but trauders see big trouble. you're watching "fast money." cnbc, first in business worldwide. >> we are not in a bubble territory or anything of the sort. >> warren buffett make go his most bullish comments yet. and we'll tell you which stocks he's buying now. plus, the battle for your money. they're duke go it out. debating the better bet for your buck. whether it's connecting one of the world's most innovative campuses.
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welcome back to "fast money." the dow continuing its historic winning streak ending the day just slightly higher. he something that has not happened since 1987. still ahead, which is the better bang for your buck? bitcoin or gold. you can decide the winner. plus the one name traders are betting will have a huge week. we'll tell what you the name is and the direct they see it going. first we start with warren
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buffett. >> we brought a lot more apple after the year end. >> the holdings that you had. >> $59 million. >> we have not bought apple in the last, sense the earnings report came out. one of the fellows in the office has about 23 million. >> it now makes berkshire one of the top five share holdings. and it is the third biggest holding. should investors be follow his move? it is worth pointing out that he made the position from the beginning to the end of january and the stock has run up simpson. so now it is a bigger position.
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>> and it depends on your time frame. if you need it in the next few years, then no. but if it is 15, 20 years. they're going to buy back stock. all the things that he likes in an investment. over a 10 to 20-year period, it pays off. i would not be buying apple. this year you want to buy the dips. >> you sold a while ago. >> i did and i regret it. i think there's a florida under the stock until they release the new phone. i will get closer and closer. i'll wait to see how it goes. >> ultimately, buffett's plan and mandate is overtime to deliver significant growth. what is overtime? we don't know. in the case of apple, this is six welcomal. if you look at the time of year, this is not the time to buy apple.
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the trader's perspective, i don't think you need to jump in here even though i go the longer term call on this company is fine. >> that's a good point. you see the calendar second quarter. it is the weakest quarter for apple. >> this is the stock at the all time high. it is a stock that historically has given you many opportunities to buy dims in the magnitude of 15 the 25%. if you don't care, it is a trillion-dollar market cap. that's great. i think this is as good a level as any. people were call for palm pilot stuff. it was a year ago. the company could be dead. this is a very different tale being told. he is still betting on stocks saying by some measures they are
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still cheap. stocks are on the cheap side compared to historic valuations. but the risk always is that interest rates go up a lot and that brings stocks down. if it stays at 230, would you regret not having bought stocks now. >> and the billionairer echoing that same bullisher stock, sayigals to see you. >> do you think he is right along stock short bonds at this point? >> i think you want to be low on stocks here. i think what buffett said, it is a fair the possibly to raise. i think you want to extend the conversation. we want to measuring stocks.
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i think stocks are not cheap on. a relative valuation, we have something less concept you'll to say how should we buy equity versus bonds? and over the last years, it is attractive relative to bonds. so relative, it is attractive. but from an absolute value, it is not. >> how much can the ten-year yielding up without stocks too expensive? peel are saying 3% by the end of the year. if it was where it is now, does that become expensive? >> i think if we have interest rates continuing to rise, that might pressure it. you have to ask, why are interest rates rising? if it is because economic growth is happening, that could give another cause for the bulls to push it higher. >> very quietly, the yield curve
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is flattening out again. can the fed raise their way into flattening it even further? if so, does that derail that market? >> i think it can be with inflation. you know they'll react and drive short end of the curve. it should also adjust here. ultimately, they will say they want had had compensation. this will take hold. to your the point, bond yield seniis flat to date. particularly certain sectors like financials. >> it sounds like you're more focused abroad. what is the biggest catalyst to global markets here? >> it is an interesting question. if you look at the em to date. bits 10%. europe and japan are trailing u.s. markets and we're not
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getting that expectations there. i think that loses the gorgs what is happening with emerging market growth and developer market growth. we actually think doing our analysis, that transitory effect, it could and should fade ask could go back to the 2000 periods. strong dm, strong em. >> all right. thank you. >> i think you need to see the buyers come into bonds. if you see a weaker dollar, you'll probably see stronger bonds and you might even see a pullback in the stock market. the short term, that's the trade to look for. if you tell me that yields will be 2.5% over the next couple years, yeah. you want to buy stocks at these
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levels. >> i think he touched on, inflation is the key. if we see inflation, that's good. and i think i want to be long stocks in that scenario. and i think will happen. i think the fed will raise and i think we will see inflation. >> it is near s&p of i think you have seen a major home run adjustme, a major adjustment. i think you can play this trade. 30, 38, where it pulled back to. i want to see that. >> we have a heavyweight xlod advertise showdown. in one corne what itechnology gave us the power to turn this emy into an ally? microsoft and its partners are using smart traps to capture mosquitoes and s suenctheir dna to fight disease.
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things off for 2017. it fees like deja vu all over again. they saw the same thing happening at the start of 2016. least for gold prices. so at this same point last year, it was 15%. meanwhile, gold mining stocks were up by about 35%. now, fast forward to this year and you have gold prices up around 9% for the year. and up by close to double that amount. to be father, the world looks a lot different than last year when fears with the global economy ruled the roost. interest rate uncertainties were there as well but they're kind of there as well. as for the bitcoin, it is hard to put it in the same trading universe. but it is a lot more volatile and doesn't trade as freely. still, prices up around 23% this
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year. even better than gold. some say it is because of trading the market. others are looking forward the long term future. the technology that enables the transfer between parties. now, gold and bitcoin have buyers for different sets of reasons but bothi have gone up long way. with returns like this, it will be big. now it is time for a showdown. fast moen is proud to present our own brian kelly. the question at hand. what is the better bet going forward? gold or bitcoin? >> for me it is bitcoin and i'll tell you why. it is not just digital gold.
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fin tech is being boilt top of. similar to the internet, growing just as fast, if not faster. it is the internet of money and i'm not the only one on it. serve on it. federal reserve just released a payment on it. bank of england. 14 of the top 30 banks have active projects going on. goldman sachs, new york stock exchange, all involved in projects as we speak, building on top of this technology. let's try to put a value on it. even though there are so many people believe on it. let's say it is digital gold. for some reason it happens to get 1% of the market st. mary gold gets. bitcoin would be trading at $1,200 right now. if it got 5% of the market share. it would be at $22,000. >> peter, you're up.
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>> it is that denial tal gold, i agree. it is digital fools gold. the whole point was to recommendly indicate the properties made gold uniquely suited to be money and act as an alternative. but it is not really viable as money. it is a potential medium of exchange but not a store of value. meanwhile, nobody really uses it. people own it because they think it will be more valuable in the future but it noose intrinsic value. >> 150,000 merchants accept bitcoin. 300,000 transition as day. >> no merchants accept it. s there are no merchant that's price their merchandise in bitcoin.
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it is impossible. >> they do price it that way. it is being used in trade fence. >> i didn't interrupt you. >> you're missing the whole story here. you're missing it. people are using it to transfer money out of china. no merchants. you find me a merchant that is pricing merchandise in bitcoin. has the bitcoin. this is half a bitcoin. >> it is very usele. it is less valuable than gold. >> it is not less volatile. >> gold had a long history of intrinsic value before it was money. peep desired it for its properties ask it was very scarce so it had a lot of value
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because its unique properties were hard to come by. nobody knew what bitcoin was five or ten years ago. it has no value except you can uts it to exchange with someone else. it has the exact same value. >> it's usefulness. utility. gold is just a shiny rock. it has no special values. >> you're a member of a cult. >> stop. stop. there's nothing you can do with your bitcoin. >> what are you talking about? here. >> what are you talking with? >> we are out of time. there is no limit. there is no limit. there is no limit to the number of digital currencies that can be created. there are hundreds of others. just because bitcoin is the most
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popular. why doesn't everybody use my space? somebody came up with facebook. you have no idea. >> okay. okay. >> you can say the same they know about the internet. >> we have to end this year. >> you all heard the argument. let's see who you think won this debate. bitcoin or gold? >> i'm going to say gold. i think we have apples and oranges. not because i don't agree with what he's saying. i think it is an interesting time to own gold. don't get overly emotional about gold and don't have too much gold in your portfolio. >> i'm going with bk and bitcoin. you get two things. the gold kind of argument and as well you get the whole fin tech element of it. and i don't guy argument that it is not usable. very few gold transitions actually happen in physical goad
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transitions. yet it is freely traded. >> but you can do it now with gold money. that's happening. >> you can do it with bitcoin. anyway. >> i'm going with bk. >> somebody is hacking the voting. he is right about bk dot, dot, dot. i think if he is correct, i think he is correct in the short term gold will outperform. if memory serves. not that i was there but i think there were seven debates between then whatever lincoln and mr. douglas. so this is first of seven over a few months. >> so it looks like 2-1 gold. >> thank you.
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>> it was an excellent debate. i thought both candidates made some salient points. >> coming up, shares of workday. the ceo speaking to jim cramer moments ago. plus one of the last year's biggest stocks could be in trouble. here'seen a breach. we need your passwd so we can lock down the system. my password? yes, sir, we need your password. the password that i use? yes, sir, yo password. there's been another breach! sir! right. okay. i-h-a... ...t-e-m-y-j-o-b-1 wanna get away? w you can with souwest fares as low as 59 dollars one-way. yes to l fares with nothing to hide. that's tnsfarency. sfx: clap, clap, ding
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we have a question about your brokerage fees. fees? wh did you have in mind? i don't know. $6.95 per trade? uhhh- and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions ba if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $6.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.
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shares of workday down. jim cramer just sat down with the ceo on his thoughts on the quarter, particularly about oracle's net sweep of. >> we saw a lot of turmoil and i think it is only at the beginning. my guest is most of management team will be gone no 12 to 18 months. so most those companies chose not to do business with oracle. i think they might come back to market ask create an opportunity. >> it is very hard to get your arms around this one. if you like this space, it is not a perfect match.
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i think you would rather be with sales force. good comb. too rich for me. >> what would be your cloud play? >> i think it depends which part of cloud you're talking about. i think to me, microsoft gives me a little of everything i want to do and to me it has the cash cow business. sales force is growing way faster. if you're going for a high valuation, that's the one. >> catch that on "mad money" tonight with the one and only jim cramer. the stock sum 8% year to date. one options trader is pointing to a drop. hey, mike. >> we saw about two times normal options activity on the put side this morning and where that was coming from was a big buy of
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about 800 of the march weekly 39.5 strike puts. they expire this come friday. taking a look at the wistock. we can see it is off the high that's after it had a great year last year. up about 40%. this is a question about whether or not they reversed the trend. electronics in particular, the only one remaining have really struggled with declining sales. but they've leveled off here. the question now that a lot of people are asking. can they pull it off? can they keep this level or even get a boost? 13 times earnings. the stock is not that expensive but that's the question everybody is asking. >> what do you feel with best buy? >> it is okay. that's not a crazy expensive valuation but i womd if it is a little bit chiled.
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no position there. >> going into it. you had a bit of a rally. it is all about how it is trading into the present. i would use this as protection. >> for more, check it out friday at 5:30 eastern time of one trader is at a two-month high. but karen says it is time to sell. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.
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after a nice pullback, mosaic, i would buy it. >> i hate to say this one. foot locker. they did such an outstanding job. they delivered excellence. i think you have to take a little money off the table. >> we have quite a few mac events come up. >> we had a twitter poll. it's still going. >> if you're from illinois, vote often. do you know what i'll saying? is that bad?
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did i offend people? too bad. 92 wants. breaking out. >> see you back here tomorrow at 5:00. meanwhile, "mad money" with jim cramer starts now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "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 and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. on a fairly dull day where the dow ends 16 points higher, 12th straight up
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