app in the last 24 hours. that's pretty active user content. >> are you one of them? >> i did use it this morning. >> busted! paul, appreciate it. "fast money" begins right now. "fast money" starts right now. live from the nasdaq site. tonight on fast, netflix just got lower, missed some subscr e subscriber numbers, and the stock is now higher. why? roger mcnamee said there's a storm brewing for two mega cap net stocks. and later, the billion-dollar drug bust. eli lilly tanking today after the new ar arthritis drug. the dow surging more than 180

points. the s&p having the best day since march. this after treasury secretary steven mnuchin talked about tax reform. here's that developing story. >> melissa, treasury secretary steven mnuchin started to cool as part of the administration's plan for tax reform. he said that there are other ways to raise the $1 trillion in revenue that the adjustment board would have provided. he was careful to say he's not been taken off the table. the retailers got a bump off his comments. the xrt started climbing about 3:00 p.m. when mnuchin's comments went live. mnuchin has waffled on the request ein the past, always saying there is some concerns and that they're studying it. he's even raised the issue of how the curbs rency would adjusn

this plan. at the very least, we have not yet seen the phenomenal plan that the president promised back in february. and democrats in the senate are lining up to oppose. >> so if there is no tax cut this year, is the hope of a tax reform enough to keep this rally going? guy, what do you say? >> yes, i think so. because i think people are saying, you know what, they push it back a little bit, but they're on track to get it done. steve mnuchin seems to have his feet under him, and gary cohen seems though have a stronger presence in the blouse. the way the market trades, though, i didn't see 180 dow points despite all the talk of mnuchin and despite that nothing happened over the weekend. i don't know where this rally came from. i'll say this, the transports reversed today, closed higher, and probably will go higher still after some of the earnings we saw in the airlines. >> to underscore some of the

communities mnuchin was saying. basically saying don't worry about deficits, they could do tax cuts with deficits. and if you get the growth, that's what matters. that's the easy option that had been bantied about-the weekend. >> this country can run into deficits and be just fine. we're not a country that needs to export our way out of something, we're a country that actually produces something here. i totally agree with that. if you want to look at walmart and say, this is great news, go out and buy walmart. the other big issue for walmart is there are way too many other stores out there like walmart, with the lack of demand or amount of floor space. i do think there's an opportunity for these things to move higher. i do believe no one really believes what they're doing on border adjustment. >> the country could run on a deficit. it's actually the freedom caucus that will not let them run on a deficit. they called it the candy option

of tax reform where you have cuts on corporate and individuals, and repatriation. and hopefully growth will pick it up. when they get back from recess, congress, on the 28th, the hundred death dth day, maybe th market rallied seven handles because of this. people got a little beared up thursday afternoon. down 80 pits from the high on thursday. >> what you said makes it sound like we're resigned to candy at best, right? candy at best is exactly where you think we run a deficit. p. >> i'm telling you that it may not happen, because -- >> you mean that won't happen. >> candy seems pretty good. >> yeah. >> i'm skeptical that it's going to happen. remember, mnuchin, who, you know, i think very highly of mnuchin actually, but the first time he came out, he said we're going to have something by august.

are ebb that? that is so completely off the table right now. i think it's so much harder to get anything done than they anticipated. i don't think health care's over. i'm skeptical they'll get anything done. >> he's talking all this talk -- >> i don't think anything's changed about of he spoke about it today. >> to be clear, walmart was a $71 stock last august. or before we even dreamed or had a nightmare about where we are in washington. bottom line here is, this is a company that has major issues and they can beat on price for so long but they're not really growing the top line. >> i think he's still keeping the adjustment border tax alive to trade it away later. because it's so unpopular. i don't see it passing. keep it alive just to have some leverage. >> you're still talking the talk that may or may not come through. we've been through this rodeo

quite a few times, since january. does it mean the rally we saw 3:00 into the close in financials for one -- >> you know what today is? >> what day is today? >> you tell me. >> the national highest poetry day. >> this is topical. late day surge in banks sends the s&p higher. trump rally intact. i still like gs. just take a look at the chart. it holds 220. >> that was master million. >> i wrote it down because i didn't want to mess it up. >> off the numbers thursday morning, this is encouraging. it's obviously about rates. big technical level, a level that really after that couple-day surge after the election, has held. so, you know, that should be pretty edge couraging.

let's not forget the s&p on thursday was down 3% from the all-time highs. it's banging around. >> banks reported on a day when people were preparing for a long weekend and we were worried about missiles flying out of north korea. think about it. we gotting with ewanted from banks on thursday in terms of the guys that needed to report and give us condition on the sector. and you got the move today. that is significant. i think after 40 basis point pullback on the ten-year, you went from -- this is where it all comes down to. i think a lot of people don't realize, look at china-the weekend, there's global growth. >> let's go to rich roth. what are you seeing in the s&p start? >> melissa, last week panic seeped into the market. that panic is apparently unwarranted based on our technical work. look at this chart of the s&p 500. this was a pretty good chart. we're talking about 8 of 11

sectors higher on the year, up 5% through just hf and a half months? 3% you up, an all-time high? you broke the low of the 50-day moving average really. but that's an endorsement of how strong this has been. when you zoom out and look longer term, you start to get a sense we could really do some work on the upside. for the first time this year investors are leaning toward the short side. look at this entire rally here. if we brought it back even further, really starts 2012, the market's up 100%. we break out above the multi-year trading range that we're all aware of. i'm not going to tell you you're going to get three years, but you'll get a lot more than three, four months. you can start to see some of the market internals here. one of the great reflg lagss here. look at the consumer dischrisary sector, the third best performing sector right up there

with health care, 7.4% year-to-date here. contrast to the s&p, that shows you just how strong it's been. the consumer's not dead. they're just more discretionary. you see what i did there. probably got a little something extra here. or maybe not. that could be it. there's plenty more reasons to like this market. and maybe consumer discretionary is the last sector that we fet. investors are leaning into a market where the panic was clearly unwarranted. now you're setting up for this market to move higher. >> i think you didn't need another chart. you got your ticket over here, rich. >> wow. boom. >> thank you. >> when you look at that xly you were just talking about, 25% of that is amazon, comcast and home depot. those aren't really discretionary names anymore. they're kind of staples. for me, when you consider that

amazon at almost 15% of that, you're trading amazon on that xly. >> that's not a knock against the market that three of the best companies in the market are the highest. these are the bigger surprises. you've seen in terms of comcast and home depot, housing, one of the about ig surprises this year. and amazon eating everybody else's lunch. >> in terms of your call on xly, does it matter that it's not a broader based rally that you're seeing in xly and that it's really driven by a few names? >> i think the math, you could special play games with the math. there's a lot of breadth here in the discretionary place here.

you'll find that in almost any etf. that's the way the world is. so just to say that we can't pie something or endorse something because the biggest companies with the biggest market caps are doing the best isn't right. >> dan, isn't it good news that these are consumer staples stories? ? i agree with your unwrapping. >> unpacking. >> whatever. bottom line here is, look at tiffany, look at ferrari, real consumer discretionary. you see a lot of this stuff booming. you're seeing strength in the stuff that may be wrapped up as the consumer discretionary. >> p the s&p closes below what level concerns you? >> i think 2300-ish. people like big round numbers. but to your point, as you see from my work, the intermarket approach, it will take more than the s&p 500.

the yen surging. the collapse in yields. the rally in gold. and then you look at the s&p, it doesn't even blink, not even 3%. after 17% rally. it's telling you, you've got yen multi-year highs, the back drop is there. it's not just a level in the s&p 500, but clearly below 2300. you start to think about a deeper correction. >> rich, good to see you. thank you. >> thank you. >> what did you do today, dan? >> that's a really important point and he named panic. to me, that means that it's a very crowded trade. okay? let me tell you something. i've had a spy option, bearish option position on for months. it has a tight band here. i think you get a 2300 print in the next month or so. and then i think you see panic in u.s. equities at some point this spring. >> what would that do for the

vix? >> i don't care about the vix. what i care about, had esaid panicked. we haven't seen it in u.s. equities all year. at some point in the not so distant future it's going to be disorderly and that's when we'll really be using the "p" word. >> are you playing for 2300? that's far from a scary level. >> yeah, i think you're seeing it 2300, 2200. >> chill, man, just chill. >> you're telling me it's going to pull back 2% and that's going to be a big deal. >> i'm not saying that. i'm reiterating what rich ross just said, that's a level a lot of technicians start to get worried. i think it's a crowded trade. >> i think you felt the smarts there. >> guys, break it up. >> i think the dax is there. deutsche bank. i think you need germany to get

back on the wagon for the s&p to continue to go higher. >> i bought xlf back today. it had a lot of bank exposure. i was not short the banks last month. i didn't want to sell any to pay taxes. bought it back today. got lucky in the timing, pre-mnuchin. coming up, netflix and united out with earnings in the after-hours session. the stock is back moving higher by about a percent. we've got answers. roger mcnamee said there is a perfect storm brewing for two widely held tech names. he'll tell us what they are and why he's so nervous. the smart money posting best year since 2013. what are they buying? we've got some clues. much more "fast money" right after this.

. earnings alert on united. susan lee is in the newsroom with more. >> yeah, despite the controversy last week over the forcible removal of a passenger onboard an overbooked united flight, the airline is now guiding for a strong quarter ahead. forecasting the fis net revenue growth into the year. better than any other airline.

and the shares are up in after-hours. united's ceo also addressing last week's passenger incident in the earnings release. munoz saying it is obvious from recent experiences that we need to do a much better job serving our customers. the incident that took place has been a humbling experience, and i take full responsibility. this will prove to be a watershed moment for the company. there was concern that maybe united's lucrative transpacific roots might be impacted after calls to boycott the airline in china in response to the viral video. right now it looks like business as usual. as for the first quarter, the quarter that was, the beat actually marks the fifth straight united has come out ahead. they've only missed twice in the past 13 quarters. the stock today halted a three-day slide. up some 25% over the past year outperforming the rest of the airline sector. >> sue, the conference call is tomorrow, right?

>> that is correct. we already have a me a kol pa as you heard from munoz. >> that should be interesting to listen to. will you on that call, karen? >> i think he's doing a great job post the first two days trying to do the best he can with the pr disaster. i think he's doing a good job with that. i would be as conservative as i could coming -- going into this call, actually. i'm wondering if things are actually better than that. or maybe they weren't conservative. i don't know. i would have been very conservative because i don't think the fallout is yet felt. maybe it won't be very much at all. as a stockholder, i think it won't be a ton. but i'd still try to be conservative. >> it's an opportunity. the moral outrage is on some level appropriate for a guy that didn't deserve that. i think people mischaracterized

the whole thing. the impact on the business will be almost nil. their investor day three or four days ago they basically reaffirmed. airlines last week as a group did very poorly. sentiment in the sector for airlines is terrible going into the earnings season. so far, if anything, this tells you that this might be a low point. i really do. at least for this cycle. united is a very good story. >> all kinds of games, the mini one. >> how many times will oscar munoz say i'm sorry on the conference call tomorrow morning. every time he says it, does the stock go higher? >> i put it at 4 1/2. you like that? >> why the half? >> what's a half? >> he's off the hook. if it's 4 you lose, if it's 5, you win. if it's 4 and comes at 4, it's a tie. that's not fun. >> you're almost indignant about it. >> no, i'm not. you're coming at me.

8 1/2 times forward earnings. they guided higher for passenger revenue available seats. it's a cheap stock. if you want to play the airlines, i still say priceline is the best way to do it. >> i would say that the last time he says he's sorry is when they do a deal to close this situation up once and for all. a settlement. they have it sealed. stop talking about it. it's in the rear-view mirror and that's it. all of these arguments are the ones you want to rest on. >> let's take a look at shares of netflix. the stock hitting an all-time high. it might have something to do with adam sandler. we'll explain what that's about. i'm melissa lee, you're watching "fast money" on cnbc. tech guru roger mcnamee said

a perfect storm is brewing for two widely held tech stocks. plus, talk about a drug bust. >> let's get down to business and we'll get the hell out of dodge. >> not that kind of drug bust. talking about eli lilly shares which are tanking following the tanking of the fda arthritis drug. this is the new new york. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at esd.ny.gov

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and each job created by the energy industry supports two others in the community. altogether, the industry supports over 9 million jobs nationwide. these are jobs that natural gas is helping make happen, all while reducing america's emissions. energy lives here. . wow. >> i saw them at the garden thursday night. >> he's back.

. welcome back to "fast money." stocks surging today, having their best day since march 1st. the dow up more than 180 points.

roger mcnamee said there's a storm brewing for two mega cap tech stocks. he'll tell us the names that got him so nervous. call it the billion-dollar drug bust. if history is any indication, now could be the time to buy. we will explain. we start off with an earnings alert on netflix which just hit an all-time high in the after-hours session. >> that's right. netflix reported revenue in line of expectations and earnings that beat by 3 cents per share. the second quarter earnings outlook also came in lower than expected. now, netflix shares swung lower, and then swung higher. but on average, netflix swings almost 12% up or down after earnings. the movement today seems moderated by netflix's projections of more subscriber

additions in the second quarter than expected. netflix saying it will hit 100 million members this weekend. and is on track to add roughly as many subscribers in the first half of this year as it did in the first half of last year. while ceo reed hastings didn't provide any additional color on the company's contest cost, it will spend $6 billion on contest this year. he said in a letter to shareholders that the netflix will spend $1 billion on marketing this year to drive member acquisition. hastings also weighed in on the new streaming services, saying the company doesn't think they will impact netflix as netflix sees itself as a complementary service. and the right to stream thursday night games is not a strategy that netflix will copy. netflix is all in on adam sandler. sandler making several movies

for netflix. the letter to shareholders, netflix members have watched more than 500 million hours of sandler's movies since the release of the ridiculous six. net flicks's earnings call will be streamed on youtube at 6:00 p.m. eastern. >> did you say $1 billion in marketing? >> that's a lot for a customer in terms of acquisition cost. >> the difference now is, they're not just advertising the fact that they have the streaming service, but they're promoting their original content. billboards are seen around los angeles trying to compete with the big studios. the original content that they're marketing. >> thank you very much, julia boorstin. i was going to say keep us posted, but there is no conference call. thanks, julia. the other number was half a billion hours plus of adam sandler. i would think that would be

sandler fatigue at some point. >> two important takeaways. one talking about the original content, because they missed the ad in q1, because of the house of cards in q2. what else is important is they talked for years, they've been funding this international expansion with the u.s. subgrowth. in the existing quarter, they're forecasting 600,000 net ads here in the u.s. 1.4 in q1. it will be about international going forward. what are the margins they will achieve internationally, that's the growth story. >> i think it's germany and france, and then latin america. i think this company has to start showing they're not going to burn $2 billion in 2017 like that which is out there. but to say that this company isn't getting the benefit of the doubt on the content side, it's certainly not a place i felt they could compete, and clearly

they are. but i think you get to a place here where amazon will spend $4.5 billion themselves. who has a bigger war chest. it's very difficult to value and it doesn't have the same re attention rate as the u.s. >> it's like a tesla or amazon or -- >> an amazing product. people love the product. the valuation is something much harder to get around. the amazon threat is very big. >> yeah. >> and apple's coming. >> apple's coming. and there are lots of packages out there. >> agreed, agreed, agreed, right? this was not a great quarter. they missed domestically, and they missed internationally. so if you had an opportunity to sell the stock, this was it. yet we find ourselves making an all-time high. they got it high for the second quarter. by the way, jack and jill, with adam sandler, might be one of the --

>> i thought you were doing another high school -- >> oh, no. that might be the worst movie -- what makes it worse. >> what? >> al pacino, the godfather al pacino of 1 and 2 fame, we don't talk about 3, is in that movie. dan doesn't want to hear it anymore -- >> i actually want to give him props here. >> the guy has not wavered on the net flicks story. i think last summer, i remember hearing you say this is a strategic asset that is likely to get bought by the time it's all said and done. that's a really interesting concept when you think about last week the rumor is apple for disney and something like that. does it end with the block buster/tech media deal? >> $65 billion of enterprise value. that would be an $80 billion deal-ish. >> p what are you buying it for?

>> i don't know, a hundred million -- internationally. >> i don't know. i'm asking. >> we don't care about the content. >> i guess. >> "fast money" roger mcnamee joins us now from stanford. you like netflix, roger. >> i do. >> do you think it gets bought? >> it's hard to tell. the way i would advise investors to think about this is, this management team has understood the streaming market better than anyone else on earth. they have roughly the same number of paid subscribers that the entire music industry has, right? this is a company that really has delivered. yes, there is, i think, scary competition coming from both amazon and apple, and others. but i do in the think is a winner take all situation. we're breaking up the cable bundle very rapidly. and i think amazon is -- and apple, the reason they're so scary is they are not trying to

make money off the subscriptions, they have a different business strategy, and that's what makes them scarry. the good news is content wins. there's a lot more coming. netflix is the one driving that. i personally would not be a buyer at the high because that's not the way i roll. i do think this is a company that in the long run, if you're going to buy something in this space, this is the one everybody's going to want to buy. >> is this the days when cable was starting and there were all these channels, and then there are too many channels and nobody was watching any of the channels? >> i definitely think there will be too many channels. proliferation of execution point is a threat to the valuation in the sector. i do not think it's a threat to consumption. i think at the moment right now, the proliferation of different kinds of specialized really high-quality content is nothing but bullish for the category. i just think it's as an equity investor, you want to trade at

an all-time high. >> all right. we want to play a little game here with you, roger. you're a good sport always. rapid fire round on some of today's news in the tech world. first up, apple self-driving vehicles. is this a great idea or just shear stupidity? >> it's somewhere between a good idea and a great idea. apple has $1 trillion worth of cash. they're coming off the biggest product cycle in history. you have to make big bets. i think self-driving cars are coming. i think it will take longer than people think. i think apple has missed nothing. i don't know where they are in the process. but i don't think they've missed anything important. i don't know how you follow the iphone, but automotive is clearly a category they're excited about. if they're excited, i want to see them play the handout. >> word association, first word

comes to mind when i say tesla. >> great brand. that's two words. but the key thing to understand about tesla is, today they are the new bmw. that's a hell of an ak lishment for any company. i do think that the stock valuation is nuts as a car company. i don't totally get what the upside is long term for batteries. i do believe tesla created a brand in cars that will survive the onslaught of low price competition from chevrolet and others. exactly how you value the stock from here is anybody's guess. it's not one i would want to own here. but not because i don't admire it. >> snap? >> i'm sorry? >> snap? >> run. >> run? >> i think their situation is brutal here. >> wow. that pretty much -- >> no, let me give you a few more words so you understand where i'm coming from. they have a great product. it's a really cool situation.

the problem here is the valuation assumes that they are the next facebook. to me, i don't see how i get from this ad product to the next facebook. to me it's worse less than what it trades for today. >> roger, always great to have you. thanks so much. >> thank you, melissa. take care. >> roger mcnamee. dan, you were just saying you would do the exact opposite of what roger was saying. >> i would never want to go the exact opposite of mcnamee. you ma i see what the copycat action by facebook means to their guidance. if you see that stock below the 17 ds price, take a shot at it. i'm waiting until we see it down there. i don't want to buy it at 2 2 i don't want to buy it at 2 2 - 20 or 22. let it get sloppy. >> i'm curious why people take this ipo price and say -- we're talking about valuation. >> i just think that you may have an opportunity when sentiment gets really, really

poor to take a shot at it. >> you would like it more than facebook? i don't get it that when you're buying a very similar thing at a way higher price than facebook. >> if you think snap is done with the two months after the ipo, no way. let me tell you something, roger, i saw him in -- dallas playing california last month, they're fast. >> f-a-w. rejecting the new billion dollar arthritis drug. we'll have a special report. plus, financials in focus this week bank of america, goldman sachs, and we'll tell you how big when "fast money" returns.

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welcome back to "fast money." last thursday our own meg turrell gave us the deal of the billion-dollar krug ready to hit the market this year. it hit, but not as shareholders may have liked. both tanking on news that the fda rejected a potential

blockbuster drug. meg is back with what is next. >> we need therapy for our stock therapy. expected to be introduced this year that could produce more than $1 billion in sales by 2021. over to the right, that's lilly and insights for a rheumatoid arthritis drug, bringing in $3.3 billion in 2021. that's probably not going to happen. on friday the fda unexpectedly rejected that drug, issuing what's known as a complete response letter that said we're not going to approve it right now. the fda doesn't publish these letters, think say the fda is asking more information about dosing and safety. are they going to have to run another clinical trial or use existing data and resubmit. it pushes it out a year or maybe two years as they collect the data and resubmit the information.

there could be some positive impacts for companies like pfizer, which makes a competing pill for rheumatoid arthritis. this is a very crowded class. there are drugs from j & j and bristol-myers. folks trying to speculate what it means across the class. insight mentioned has been a talked-about takeover target. it has a cancer drug in the pipeline people are watching very closely. that will have important data at this cancer research conference coming up in june. eli lilly will have data also at that conference. and in support today, saying, it does have setbacks. but if you look over the past year, they had the negative based three trial of alzheimer's. you can see the stock took a big dip on that, has recovered. today falling again on this fda

news. some people say they have great newly approved drugs and there are reasons to be in it here. >> is this drug, is it that it's just a question of delay or is there a chance of it not getting approved? >> i haven't talked to anyone today who ultimately doesn't think it will get approved. but everybody was shocked it wasn't approved on friday. because it is approved in europe. some said europe can be a little stricker than the united states in terms of approval. so people do think it will get approved. >> let's put up that chart once again. the dip it took on the alzheimer drug trial when it failed. and look at the recovery it made. does that tell you that maybe the pull poik today -- >> not enough. in the beginning of 2016, if i'm not mistaken, look at eli lilly from the beginning of december. it traded to 86.

a lot of which was hoping that this drug would be approved. not all of it. eli lilly trades around 32 times trailing. it's an expensive stock in the first place, without the eps growth to justify it. yes, it sold off today. i think they can trade at $75. still ahead, the smart money has behaved like smart money this year. there were a handful of stocks that paved the way. plus, financials surging ahead of big earnings from pampg of america, goldman stanley. it might be time to get back in. we'll explain. you're watching "fast money" on cn cnbc. cnbc.

we've got a news alert. federal reserve vice chair stanley fisher speaking at columbia university. steve liesman has more. >> yeah, fed vice chair stan fisher saying he doesn't see a taper tantrum like we saw a few years ago when the fed announced the balance sheet reduction. he said so far there's only been a muted response to discussion

of the balance sheet in the market, he draws some strength from that. in case you weren't paying attention, he said the fed is near the beginning of the process to shrink the balance sheet. melissa, i don't know if you want to ask the guys if they're going to hold their breath and stomp their feet and throw their broccoli on the floor that the fed, whether or not it announces its balance sheet. >> that's a good question. >> what steve brings up is a great point. the mere mention of the fed balance sheet was enough to send markets very down into the close. ultimately more fed, less balance sheet. this is effectively a tightening that the market is not priced in. yes, i do think it's an uncomfortable topic for the markets. >> you said the fed could change the pace of the fed rate hike because of the tightening that -- >> that's the speculation. they haven't said that yet.

it's good to see that tim is such a grown-up. >> i'm not so sure about that, steve, but thank you. >> in most matters anyway on television. the thing is that so far the expectation, this began goldman sachs' idea, and others have gone on to the idea that when the fed begins to tighten the balance sheet, even announces the plan, they'll stop hiking rates. you get a june-september rate hike, then they pause and talk about the balance sheet. this is interesting. this comes as janet yellen will be leaving. so she would leave that blueprint for her successor if she does go. >> yeah. steve, thank you. >> pleasure. >> steve liesman. guy adami, so she leaves just when it gets -- might be a little tricky for the if ed. >> as chairman bernanke -- >> is that a potential -- >> no, i don't think the head makes a difference. it's the entity. it's the entity. respectfully, they thread the

needle so far extraordinarily well. this is where it gets tough. >> he mentioned the taper tantrum, that was may of 2013. the s&p 500 actually sold off, what, 5%, 6%, 7%. i think the markets can handle it. >> i do, too. and how aggressively, how quickly they do it. i think they threw it out there a little more aggressively than they thought. i think the market absorbs it pretty easily. >> the best start to the year since 2013, is the smart money smart again? hi, leslie. >> hey, melissa. yes, things may be looking up for the hedge fund world. the industry gained 3.18% during the first quarter. that's according to the hedge fund benchmark. that makes for the best start since 2013. the gauge increased 11.6% for

the year. now, the industry needed some good news, as you know. investors have been fleeing after years of underperformance, and pressuring the firms to lower their fees. analysts say if the performance continues it could help the pendulum swing back toward the hedge fund. hedge funds node to do a little bit better than they did in the first quarter despite the gains, they still trailed the s&p 500 during both the quarter and the year through march. even the best performing strategies during the quarter. we took a look at some of the popular hedge fund holdings to see what might be the culprit of the top 50 hedge hund holdings. about a quarter are in the red for the year. hedge fund piled into financials, bank of america and citigroup specifically at the end of the year. banks saw a decent bump after president trump was elected, but the stocks have pared back more

recently of the we should get more insight in a month when the quarterly filings are due. >> thank you very much, leslie. karen, what do you draw from this? >> i think the best thing for hedge funds is they need big relative outperformance, and that happens in a very big down market. so they're being skthly positioned, which is why they're probably up three versus the index was high five, six, something like that. a big down market is really what the hedge fund business relatively needs. >> well, think about the ones that you can trade, or black stone and kkr, well off their highs. but both places where the balance sheet is unbelievable. i would almost call it pristine. these guys have an environment where a lot of the exists in the pe space they expect they can get to. the best are still the best. i think the sentiment for hedge funds right now is a low that will probably be the bottom.

>> we'll find out a lot more tomorrow with goldman sachs. and they talked about the xl -- >> i told them, go chart it. they did. >> back to you. >> let's get more on the bank earnings here. guy mentioned goldman sachs. dan is over at the plasma. >> tomorrow morning we've got an active morning. they've moved about 1.5%. wednesday morning we have morgan stanley. mo o moved about 2%. the only real big mover there was wells fargo, the down side about 3.5% or so. it's made back a lot of that obviously just today. the other ones? good enough reports. the stocks held in here. i think it's important to go look at the charts a little bit here. the xlf when tim and i were go charting ourselves here, that was really interesting to me.

we both identified the fact thatting 23 bucks was a pretty important support level. looking at it to one year, though, this was a really important trend line. we both thought 22 was a level that you could balance it, if you look at that a little bit. this is the level that needed to hold. that's good technical support. looking at goldman sacks, that's a good one, people consider that as far as the investment bank standpoint here. this is the same sort of chart. obviously looks pretty similar to the xlf. this is kind of a big level here on the six-month chart. i just want to go over to the one-year. this is one, i know that guy adami has been all over this thing. it sold off about 12% or so from the 52-week high. still up about 24% from the election. this is one that looks really interesting to me if it could hold 220 after earnings tomorrow. >> 220 was the level that guy mentioned.

we are back on friday, 5:30 p.m. eastern time. tim not sorry to be pieing one airline name. he'll tell us what it is when we come right back. ight back. [pony nehing] ight back. what? hey gary. oh what's witthe dog-sized horse? i'm crazy stressed trying to figure out this compx trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? wellyou could get suort from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what out my motivational meerkat? in-apphat on thinkorswim. only at td ameritrade. our customer is aur 21-year-old female. wait. data just changed... now she's into disc sports. ahnohe not. now she's into dnce when?s. ncnow. she's into tai chi. she found disc sporttostre. hold on. let me k you this... what's she gonna like six months from w?

who we have on aeri karate? steve. steve. steve. and alexis. uh, no. ju steve. just steve. just steve. live business, powered by p. when you run live, you run simple.

the power of 100 of the world's top companies. the power of a proven 15-year track record. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it refully. distributed by invesco distributors inc. final trade. tim? >> airlines. buy them here. united, the sentiment is terrible. >> kate williams, happy

birthday. and cover the xlf. >> goldman holds 225. good long entry. >> briceline is my call. best way to play the transports. it will get you done. >> i'm melissa lee. thanks for watching. "mad money" starts now. hey, i'm cramer, welcome to "mad money," welcome to cramerica. my job is not just to train you, but to educate and teach you. tonight i'm letting you in on something real big. the method of my madness. i know this is