and it's with delta and the norwegian. >> right, and they have some experience in overseas flying to the caribbean and things like that >> we will, and that pretty much does it. big day tomorrow on capitol hill headed to d.c. indeed, on the plane >> anyway, thank you for joining us, contessa "fast money" starts now. "fast money" starts right now live from the nasdaq marketsite overlooking new york city's times square. i'm melissa lee. your traders are pete najarian, tim seymour, karen finerman and dan nathan it's been a wild ride for this stock and even though it's well below its price, the dean of valuation says it's still not worth the price it's trading at now and plus big banks under pressure this week as the ceo head to the hills tomorrow and the companies gear up for earnings later this week, but the chairwoman says investors are getting it all wrong she'll explain we throw it out tonight with the market sell-off and the dow fell 200 points and the s&p 500

snapping an eight-day winning streak and royal investors that the biggest loser today, small kwaps. the russell 2000, getting hit the hardest, sending the group down more than 10% from its highs. back in august leaving the broader markets into the sell-off are small caps is it still safe to buy stocks? pete, we'll kick it off with you. >> still think it's safe to buy stocks it's one of the messages looking at different things and i'm impressed with what i saw today out of different techs obviously, we see the semis have had pressure and they've had a great run and some bounces here and there. i look at volatility and liquidity and we're seeing volatility has been unbelievable in the first quarter, at the start of april, by the way, volumes have really been very, very light and that's something i'm keeping an eye on and i don't like what i'm seeing in terms of that kind of volume and

the options world down to averaging 17 that's significant and we're losing some of that volume and not sure exactly why and maybe it's because of the performance in the first quarter and i don't think just because we are seeing this particular segment of the markets going down i don't think that necessarily says the rest of the market is going down >> except that they got stuck here and the russell 2000 small cap is down from its highs and down 15% on the year which is in line with the s&p and it's up in line with what the s&p is up off its lows and it's not going anywhere and i think part of the question is what did it mean now that we know that lower rates and the equities look more attractive and how indebted they are and the highest debt to equity, and it could be a problem even though they can finance their debt cheaper and it is reflected of the fact that we might be entering a different economic cycle and lower rates at this stage of the cycle is

not particularly good and small caps will be most effective and at least a more vulnerable position to finance it >> take a look at this before they go on, and the small cap percentage, and the percentage of non-earners within the indices for the russell. that's 35% of the index of non-earners. in other words, if there is a downturn, these guys could be most vuler inable if they don't have debt. >> how are the small caps, by the way? >> the average with capital separation is $2.4 billion on the small cap index russell 2000 and the median is $851 million. >> this is where melissa is running the show the irony here, of course s you guys talk about the debt burden. rates haven't been this low in a year and in fact if you look at essentially where small caps

have been relative the s&p orr less keeping pace and people are most concerned about growth an it's downgraded global growth and we're at 2009 levels and we haven't been this low essentially in ten years and italy went from 1% gdp down to 0.1. if you'll be worried about anything happening i would be most worried about the pigs or the southern european nations which is the epicenter of the banking crisis over the last decade i look at high yield and the u.s. leveraged loan indices and the dollar yen and other measures of risk and credit spreads and i don't see any fatigue here at all and i know it's disturbing because it's the absolute levels of debt and i'm not worried about small caps telling you it's a debt problem. >> a small cap investable, or do you favor large caps over small caps because of what we're seeing >> it's underperformance relative to big caps and if anything, i've historically used

them against emerging markets which are flying high right now and it's trading better than the s&p. >> so, i don't know if you think of it as a monolithic small cap sectors and there's value and there's lack of value and some other ones i think of the small caps as having a much more centric even with emerging markets improving and they're the strongest and the fourth quarter, the iwm hits much harder and i would have thought it would have revamped harder when you see illiquid markets and you have sellers trading terribly and i would have thought a reverse would happen and it would have been stronger. >> would you sell them >> think the relative market is interesting here >> as a catch-up trade >> a concern for the broader market >> that's exactly what carter

said to us last night and he thinks it is the catch-up trade where you think where is the russell 2000 that's 17% of the wage is financial and that's one of the reasons why it's so hard and they've done what no other regional banks did and they continue to underperform the xls chart looks a lot like the russell 2000 chart and it has been stuck in the range and i think it's very reflective of just kind of growth outlook and that's what i see and i see the same thing as the ten-year treasury yield back at 2.5%. it has the potential to add risk assets and i'm not sure it's bullish for economics. >> did you be on the trade >> right, because you don't like financials >> what happened in q1, the correlation -- would you rather -- [ laughter ] >> i won't submit this kind of

question >> the rest of us -- that's a really easy answer would you rather financials. >> much rather. >> i'm not going to give it up valuation on the relative basis, there's just absolutely no comparison, in my opinion. not to jump in front of the financials that she'll be talking about, but i do think we'll see some lones, and i do think we'll seetrading revenue so they weren't there in previous quarter and i would think that ought to translate fairly well to the financials, plus they're specific. i think they're all a little bit different and i think it's great for morgan stanley and i think it's great for goldman sachs and i think it's great for bank of america, but some of the other names maybe not so much. it just depends on what we're defining as financials when we say the whole financial world. >> in terms of technology today.

yesterday we had tech closing at an all-time high and we had apple trying for the longest winning streak since 2010 and that was one of the factors leading us. >> semis were weaker today, and i thought it was a pretty yeomanlike effort and in apple's case, i think apple is more indicative of the market that people have companies that, frankly, i don't think apple is overowned here i think apple is underowned and he can mrau apple within 2%. >> it's expected to have and 40% off their lows. >> and this company, we started the year with the earnings preannouncement and the stock went down 7%, 8% in the clip and it's obviously been up 40%

here's the thing and they're expecting to have their third annual iphone unit decline they're not going to tell us what the units are they'll have the first earnings and sales decline in a number of years. you tell me what the world, what the globe looks like and what the trade situation looks like for a company like apple they started this 2019 off telling us that china was a problem. we've not heard anything to believe since january 2nd, and they mispriced the phones. so that hurt their -- after that, right and they corrected that since then and that's really when you started to see it was that apple at this point the stock now is almost back to a trillion dollars in market cap. >> do you think there's been an analyst drumbeat since they had services >> apple tv has no services and it's all about the screens >> look, because i think people have been defensive and looking for places to hide and they're interested in changing amazon and the ultra cyclicals and

apple is very defensible here. >> i don't think they're going there for the defensive stock and i think people have finally thought about the idea. >> with services and wearables and all of the other things apple is and they'll not be as transparent would like, but as they come back from that, take a look at where the margin growth will come from >> those other areas you know what? maybe they were peacock sales, but if they were grown in other areas that could propel the stock. >> our next guest says the pain will be temporary, let's bring in joe ziedel. >> j.z earnings will be the temporary hall and we're about to enter this tug-of-war where so far the markets have been followed by

liquidity and the fed turning very dovish and china's central bank, et cetera and on the other side of that this is the wall that we'll run into, we're suffering slow earnings growth right now and it's about to become apparent, in 2002 to 5% eps growth, and so i think that will create this puz ilwar, but the silver lining here is i don't think there is the end of the bull market and this is more of a mid to late cycle pause and we're looking at an environment of single digit or less earnings growth >> your year-end target, by the way, is 2875

a modest increase from here. in terms of -- in addition to earnings when you look at central bank easing around the world, do you feel we're at a point now where the markets have fully priced in this from the fed? i'm thinking specifically of the chinese still laws that was released over the weekend and there was reaction from the lead market and have we become used to this? >> the s&p up 15% year to date and it was based on the notion that we would swing from tightening to even conditions. i think another positive factor which we shouldn't overlook is that all that liquidity easing is going to start translating to the real economy so we are starting to see data improve not only out of china. we're starting to see privy data here in the u.s. and even more broadly like emerging markets just beyond china and the emerging markets and it's a

leading indicator and now higher than developed markets there is an economic story that we shouldn't overlook and this short term tug-of-war is on the economic side versus what we're seeing in the profit cycle which we are due to slow down, given the fact that 2017 saw 10% ets growth and now the comps are incredibly difficult >> if you're talking low single-digit growth and that is revenue growth of 1% or 2% and don't you think investors have learned for the march quarter and it's more they'll be looking at the guidance and what are you seeing and if they're optimistic about that or are you saying you think there will be a pause in the guidance >> i think we could because let's say, first quarter earnings right now projected to be down 4% year over year. it doesn't mean that earnings will be down 4% because

historically in the first quarter companies beat by 4% say companies beat the way they normally do and maybe they come down flat like around zero if the dollar holds where it is right now and the second-quarter earnings will be facing a very strong dollar and that's a headwind for profit which means second-quarter earnings can be difficult, as well and third and fourth quarter earnings ought to start showing improvement and that's why i see it as more of a pause and what happens is you have a profit cycle that works in one speed and an economic cycle that works with another and sometimes they line up and you get a profit recession at the same time of another recession, but they don't always and we're in the situations where profits will be working at a different speed than the economy and then in the third and fourth quarter this year or 2020, we get a profits recovery, meanwhile the economy remains steady and things improve. that's why i would take the volatility and use the opportunity to be bullish. >> last question why should investors stay and invest in the markets right now

given your price target? >> because i think 12 months from now equity prices will be higher than they are today there are two things that drive valuation. earnings and interest rates. and the interest rate picture got a lot better for companies when the ten year went from 3.25% to 3.5% and that benefits valuations. >> all right joe, great to see you. joe zidle of blackstone. >> my view for some time now is that the s&p in particular is trading between the 2600 and the 2930 or whatever range and i think the likelihood of it breaking out after we've just run 23% three months ago is very unlikely and i want to make one point that mike wilson is making for a long time, companies are more likely to manage this earnings recession by buying back more stock and that's when you see this earnings cycle possibly starting to feed into the economic cycle which could lead to a period of malaise

especially as the market is rangebound and we have a sense of shock if 2018 and we had the january and february down 12% and we had it down 27% >> i don't think there's anybody here on the desk that thinks that the expectations for second-quarter guidance for the end of the year will be positive therefore, and to me, right now the trade is higher and ultimately, joe brings up a good point in terms of the dollar and year over year the dollar is up 8% and this market is going to stay here and if anything, the risk is to the upside. >> coming up, check out shares of levi's. the company reporting its earnings report since going public a few weeks ago report and we'll give you the details and speaking of ipos and the dean of valuation is here to tell us what the biggest tech unicorns are worth and mike rutherford said i'm sorry to the world and it's been a rocky road for the media giant.

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u.s. deal missing the mark today as credit suisse downgraded it from neutral to underperform and the competition increasing and a sheet tsunami ahead. those were the words of the bank the stock tanking 10% having its worst day since the beginning of august shares are down a whopping 50% from their high so how much worse could it get for u.s. steel. we saw all of the steel stocks across the board, nucor and steel dynamics all down because there would be a rampant production for these hot rolled, coiled sheets. >> rampant production and if you look at hrc prices, they were near all-time highs and the fortunes for the entire industry have changed by the way, coincidence this is when is started happening march of last year and these companies were in a very different place and 46 bucks on u.s. steel look, i give credit suisse credit for getting out on an aggressive call and at $13 a

share j.p. morgan, and despite the argument, that the reality is the capacity utilization in the sector is pretty darn healthy. prices are pretty darn healthy, but the argument here is that there will be a flood of steel coming on to the market and that's fair and certainly we can see prices overshoot i like the stock i'm long the stock probably 25% higher and i think it's interesting to own it here >> so you're not concerned about the capacity utilization >> to me, for a cyclical and capacity utilization you have to price it to your variable cost >> if these guys earn a billion and a half on ebitda, credit suisse says they'll earn a billion and there's biz parity out there on valuation and this is a stock they think somewhere around three and a half times is now attractive. >> even if you think there will be a glut or supply coming on to the market what happens when the tariffs are lifted, say the day comes. what happens to these stocks

>> look, to me, tariffs are not a good thing it's been a death knell for steel companies and we have to get rid of them. >> it's -- yes look, i believe a normalized steel market which is one where korea could be dumping steel and china could be dumping steel and it's something that u.s. steel was dealing with at 45 bucks a share. >> you know, what i don't like is the situation where we're sitting here and talking about the idea that potentially this could happen because what we're seeing in front of us is exactly what's happening we're talking about a potential glut, right? so i would rather stay away from that right now i think there are other places in the metals space they like better right now tim i know has been around copper forever freeport today had huge call buying going on there, and i jumped in there toward the end of the day and i would rather be in those names than the steel names right now, mel, whether it's tariffs or the glut that we're seeing coming on the market. >> for more on u.s. steel and the other analyst calls of the

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welcome back to "fast money. check out shares of levi strauss higher after its first earnings report since going public march 21st and since the first earnings report we don't have analyst estimates to go off of, but the retailer has provided year on year revenue data which is strong. the stock trading about $5 over $17 a share. the company's conference call is still under way as we speak, but the ceo says the company is entering a new chapter with a business that is stronger, diversified than it's been in decades and they've seen momentum continue to cross across every part of the business karen, should we extrapolate >> hopefully you can the revenue growth is very good and consequently, it was even better and they are around the world. here's the thing that's interesting to me. it's very nerve-racking to have a new company, a company ipo and then you wait for their first earnings and you always think why would they ipo and then come out with bad earnings? they don't always -- they're not always in control of it, you know you don't know how long it will take to get an ipo done and you

can't really time it and sometimes you just end up with a crappy quarter, coincidence with your coming public good for them, it is much better to start off on a positive note. i think it's interesting here. it's an enduring brand i think it's interesting >> can i ask a question? >> it's an apparel company that is trading 22, 23 times earnings they say they've never seen a more diversified business, but at the end it's a jeans company. should we be paying a premium for this company >> it's a jeans company that's experiencing tremendous growth you think it's a brand and it's really not growing, but it is. i don't know >> dan, you wear a lot of jeans. >> this is the consumer -- is that a jean shirt? seriously. is that a jean shirt this is a consumer staple of apparel, if you think about it, okay why do these consumer staple companies trade at a premium why does procter & gamble trade

at 24 times? because it's a tape snell. >> is that a jean shirt? seriously. >> i don't know, some other fiber. for more on levi strauss's first earnings, catch chip berg tomorrow on "squawk alley. in the midst of ipo mania, we thought we'd bring in the dean of valuation aswath demordoran professor, welcome. >> good to have you on campus. >> good to be back >> there is a lot of hand wringing especially going into the uber ipo what is lyft valued at what should it be valued at? >> my estimate and i'm bending every single rule to breaking point is i get to 15 or 16 billion. you've got a business that lost a billion last year and hasn't figured out how to make money yet and the business model is broken across the boat in ride

sharing. getting to 25 billion is way behind stretching as i see the company. >> this is $59 a share which is considerably lower when you do these valuations, should we extrapolate to uber? should i apply the same multiple to uber, but it's a different business you get tired with whoever you get lumped up with this is what will happen when uber gets up to 80 or $125 billion. no matter what the difference is investors will price uber based on what lyft is priced >> is there a typical premium or discount to your valuations versus what a share will price at in other words, is there a bias when the company goes public >> i think the younger and less-established a company is the more the premiums tend to be because people build whatever stories they want into the companies.

>> these are not new kids on the block. >> lyft or levi strauss? >> lyft is new as a business as a business it's new and we really don't understand how the ride sharing business will evolve this is not the old car service business. >> this is not the number of years in business. >> think it's still very young as a business and as i said, none of these companies have figured out how to make money on the business yet. >> levi strauss, what is that worth? >> i have it at about $28 per share. i really like the company. i know it's just an apparel company, but i still like my 501s there's something about my brand name i'll make a bet that levi strauss when lulu lemon and underarmour are forgotten. it's a brand that's been around 150 years and it has that going for it and it has potential especially in asia where they haven't grown as much yet and if they can leverage their brand name, i think they can get the

growth and maintain their margin professor, you're talking about the profitability of the unicorns and we talk on this desk all of the time netflix to me still doesn't make money. >> yes >> how do you reconcile this obviously, netflix is a very successful, proven company. >> i think unicorns, is where from is a light at the end of the tunnel netflix, there is light at the end of the tunnel and if they can figure out a way to get that fast enough that the economies of scale will kick in. when i say that lift is not just making money, but there is no pathway they're now to actually make money the economies of scale are not kicking in because where we allow them to grow so far, they stared up fast and there's no capital investment and everybody is a free agent in this business the drivers are free agents and the customers are free agents and no stickiness in the business and they know it.

they're throwing everything at the wall and hoping something tech, but that's the basic problem i have with all all of the leveraging >> even guy adami didn't keep his job there. >> so how did you get there? did you have somewhere in your dcf model to break even? >> in a sense i mystically believed something somewhere along the way because what they succeed succeeded at is changing the way we take uber and lyft. i never take a cab in that part of the game they succeeded. what they haven't figured out is how to make me stay with them. i'm completely disloyal here and if there was a third service i would go to the third service. there's nothing in this model that keeps me stuck with a particular user and the same thing with drivers they can't keep them at dift drivers because uber gets them away this model needs some stickiness and something to keep customers and drivers attached to a

service. somewhere along the way the business model has to be worked out and otherwise we'll end up with companies that can't make money and that's why the 15 billion is a stretch because if they don't figure it out we'll be in trouble. >> from a qualitative standpoint if you compare lyft to uber who just paid $3 billion for a company that does ride share in the middle east where there's going to be very different economic, right? probably worse margins than we have here, there, they have uber eats and all of this other stuff and are they throwing it at a ton of different walls rather where there's one and is there more with uber >> i take lyft over uber because uber want it is to be all things to all people and you'd think they learned from their mistakes and back down to china and back down to southeast asia i think it's only a matter of time before they're back out of india because they're losing enough money to save themselves cash so i think being less ambitious

in this business until you figure out a business model that works is better and lyft from that perspective has been less ambitious and it's u.s. based and it's car service. >> we didn't ask pinterest and have you done a valuation on pinterest? it's on the road now i would say the same thing about pinterest that i said about snap keep it small and don't go after the big market because you don't want to go up against facebook and google head to head. you want to create a niche and you want to be in that niche which means you have to be less ambitious rather than more ambitious and the mistake snap made is they thought they could be the next facebook and they thought they could be bigger than they could be, and i think the signals you're getting from pinterest is it's less ambitious and it's not trying to be all things to all people. >> professor, thank you. >> professor aswath spodomadora.

>> they had the same risk just like instagram came right at snap with the ipo and the last point he made is really interesting. this last round of ipos and these unicorns they don't have the cult of the founder. the lyft guys were understated and ben silverman at pinterest was understated. >> the rock star ceo there was an evan spiegel premium in snap, you don't have that in these names right now. >> coming up, the deliveries and orders of its 737 jets plummet in the first quarter one of the traders said this is just the tip of the iceberg and a big week from the banks and the ceos and they get grilled on the hill and the group is up for earnings and karen says there is meing out ossothabthe stocks that wall street is getting all wrong. she will explain when "fast money" returns

breaking news out of washington treasury secretary steven mnuchin just left the hearing on the hill in the international financial policy elan moi is there tracking the treasury secretary >> melissa, he has been on the hill all day long. he ended that marathon day of testimony with a heated exchange with house financial services committee chairwoman maxine waters this exchange was not about trump's tax cuts or trump's tax returns or about tax cuts or even about trade, it was about what time he was supposed to leave. >> what i've told you is i thought it was respectful that you'd let me leave at 5:15

>> you are free to leave any time you want. you may go any time you want. >> please dismiss everybody, i believe you're supposed to take the gravel and bang it >> please do not instruct me as to how i am to conduct this committee. >> well, mnuchin said he was late for a bilateral meeting with rain and would be embarrassing to america. he got sort of hot and flustered and red during that exchange that you saw just there, but i think the takeaway here is just how gruelling it can be in the hot seat for whoever is testifying before the committee and also it shows just how strong of a hand chairwoman waters has as she runs her committee and that's going to be really important for tomorrow's hearing with those big bank ceos they can take a lesson from what happened today. >> perfect segue thank you, elan. it could be a make or break rank

as they go before the house financial services committee tomorrow of which maxine waters is the chairwoman. before j.p. morgan and wells fargo, j.p. morgan cutting price targets for many of the bank, but karen, all of wall street's worries about the group are misguided. why don't you head over to the plasma and give us your fine print on the financials. >> as we know they're all on the hot seat tomorrow and a lot of times we see industries and ceos specifically on the hot seat and that is the bottom of the stock. think about mark zuckerberg for last year and we'll start to see them and j.p. morgan reports on friday and i focus mostly on j.p. morgan. a few reasons. follow the money and with this, what it means is people aren't understanding about banks is they keep focusing on the net interest margin, how much fresh tlur is from rates being low, but banks actually make half of their money from the net interest margin. the rest is from other revenue which is things like investment banking and markets activity or

asset wealth management or credit cards and there are lots of other places to make money and the street is undervaluing how much of the revenue comes from the other businesses. the next point is that earnings concerns should be priced in j.p. morgan themselves said in their 10k that their first quarter is going to be basically disappointed they talked about the market's revenue being down a lot they talked about the interest being flat they talked about expenses being up so that should already be priced in and the market's revenue has picked up since they filed that 10k which was at the end of february and the last one is cheap valuations and i look at the stocks relative to the market and they always trade cheap relative to the s&p and i also look at them relative to themselves so let's take a look at j.p. morgan, for example. we'll look at here's the p-e and here's the stock topped out right over here, around, just under 120 and the p-e at that time was about 13, 14, but now

the p-e is just under 11 to me, that's way too cheap and that's where i think the value is >> so friday, i think we'll see not terrific earnings, but i also think that the stock should have fully priced that in. this is as cheap as it's been for a while and for me, the last reason that i love j.p. morgan is of course, you know, the best ceo out there. >> dan has a question. >> i preempted my question and i think you're speak toeg an audience of one and you pull up the picture and his name is jamie dimon. >> think he knows what he's going to earn on friday. >> can i ask you a quick question >> sure. >> you could have made this same earnings argument over the last season of three, four, five quarters when would be the catalyst for investors to break wake up finan say these are too cheap. >> i'm a way long-term investor and i just today looked at my

holding period just to see and the oldest stock i own is actually serve year actually seven years over time they build value sometimes it's recognized and sometimes it isn't you'll have a year like 2016 when it was up huge, and i think they build value over time and they buy back stock and pay dividends. i don't know if there will be a reckoning and theic what up one day and see value. i just want to build it over time and hope they've done it. >> thanks, chairwoman. shares of the social giant is up 12% since mark zuckerberg got blasted on the hiel. should you trust the facebook rally? boeing taking the industrials down with it and one of the traders says this is just the beginning of the bigger sell-off he will explain when "fast money" returns

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welcome back to "fast money. it's officially been one year since facebook ceo mark zuckerberg sat on the hot seat to defend the privacy and security woes. for more let's get to julia boorstin in los angeles. julia? >> thanks, melissa after making a number of changes over the past year, mark zuckerberg has a challenging year ahead as he works to avoid landing back on the hot seat on capitol hill and he's facing a particularly precarious juggle the company is under broad regulatory skrut me. it's currently facing charges from the department of housing and urban development. thefederal trade commission is investigating facebook for violating its commitment to

protecting user's policy and expected to levy record fines and facebook is under investigation by the doj, the fbi and the sec. plus there are calls from both sides of the aisle and congress to enact privacy legislation ahead of a california privacy law going into effect next year. now, just today senators mark warner and deb fisher introduced a bill to ban deceptive practices to get facebook and user data. they got an executive to testify on harmful content at a house committee hearing on white nationalism. while zuckerberg deals with the cost and distraction of the scrutiny and he's trying to execute yet another shift to his company's business model zuckerberg announcing earlier last month a new focus secure, private messaging enabling people to easily communicate across facebook's platforms and that includes messenger whatsapp and instagram. there's no business model around messaging just yet, but it is

worth noting, melissa, that today is the seven-year anniversary of facebook buying instagram, its co-founders left facebook last year still, facebook shares are still up about 12% over the past year. melissa, back over to you. >> thank you. >> is all of the bad news for facebook and could there be more downside ahead karen, what do you think >> i don't know. we were talking in the green room before. i think i would like to see regulations and that would make it easier for face book and for google to comply and we'd know how to price facebook because they don't know what the revenue model is going to look like, and i think it would be a positive, and i think that also that facebook being the posterchild for bad behavior is fading a little bit now that is spread over many more poster children so i'm long. i like it here >> i think it's fading as well and it has vsn't stopped and th one negative is the president and the tweets

i've owned the stock for over a year and i've sold calls for every single month and you're kind of creating your own dividend stream on top of a company where i look at it and i see instagram and i've read this time and time again, instagram will contribute about 30% to the revenues of this company and people are all still looking at facebook and it's not facebook and it's like apple looking at the phone. these other verticals whether it's whatsapp and mess efrnler and instagram. i think they'll figure out ways and figuring out ways that they can monetize these different verticals that they're in. >> the monetization in instagram in terms of commerce is interesting because that, in effect, diversifies their revenue stream. >> the announcement a week and a half ago was very exciting for people to unlock the value that pete's talking about, and

instagram is an undervalued component and the sum of the parts, you name it facebook has done as good of a job as they can do of getting out there and trying to be accountable and they've thrown themselves at regulators and said give us something and that at some point, to me, i don't think the stock needs to trade at a premium around 185 the stock's rallied 15% off the bottom and a lot of great news has been priced back. >> what i think is about zuckerberg and sheryl sandberg asking for regulation it strengthens their competition and it will stifle innovation and it makes that it that much harder for people to compete with them. i think they're playing a hand that i know how it will go and so to me, i don't think anybody is that quick to put dumb regulations on this industry that will continue to grow one way or another and regulation only strengthens the incumbents. >> coming up, industrials, the worst performing sector today and there's something in the charts that points to an even bigger breakdown we'll explain right after this

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space. dan is at the plaza and says this could be the tip of the iceberg for the industrial space. dan dan, what's the action the eti thf, and there were buyg volatility playing for movement between now and may 3rd expiration there was a buyer of the may 3rd 76-strike straddle buying the call prime combrum and t call premium and you're putting it together between now and may 3rd. that cost $2.40 and the trader is making a bet that the xli will be above 78.40 or below 73.60 on may 3rd expiration and they're 3% in either direction and why would a trader be doing that boeing is volatile and it's the biggest component in the group and still 15% on the year and the xli and the best 15% gains

in the s&p 500, we think about this we know that boeing will give guidance when they report q1 on april 24th and we'll get some other earnings from other large components in the xli over the next few weeks and i want to go to the charts very quickly here. look at this thing it's been rejected a couple of times. it's $76.50 just to get right there and that looks to be short term technical resistance and just taking a look at the five year and it never made a new high here and it's been in the downtrend since the all-time high in january and it had support down at the $70 level and it's important to remember that this etf went from 80 to 60 in the q4 downdraft. material guide down from boeing and we hear it straight from the horse's mouth will affect the xli here and the pushout of any trade deals could be a headwind through this group to me, i don't like the xli here and i think it's done pretty well year to date and i think there are issues here that could

take it down in the near-term? >> pete, what did you make of the action i think the implied volatiles could place stocks like utility and you look at the incredible volatility that's there and this gives you the cha tonce to playt >> check out options action at 5:30 eastern time. up next, final trades opinio why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade. craftsmanship and technology that have made the rx

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time for the final trade pete najarian. >> mel, i have to agree with the professor who was sitting here just a little while ago. levi, too cheap and they have great margins that are going higher and higher. this is the company to own giddy up. >> i think it's very good for home improvement and that's home dee poe a depot and it's been interesting. >> with rates lower. >> karen finerman. >> it's good enough for the plasma and i'm long all of them going into earnings and my favorite, the cream of the crop is j.p. morgan and we'll see you friday morning at 8:30 >> are you going to say something. >> literally, that is the cheapest thing and she's talking to an audience of one.

>> is that a jean shirt? >> it's hemp >> dan >> listen, we have xli, he was talking about the volatility and those options really are cheap i think that's why traders are focused there, but if you want to pick a direction they're even chpethe. noffense to you back here at 5r more "fast." "mad money" starts right 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 my friends, i'm just trying to make you some money. my job is to entertain, educate and teach you. so call me or tweet m me @jimcramer. here we go after a nasty day like today, the dow lost 190 points, the nasdaq climbed 0.56% th