that's what co and carter did on gilead. carter thought biotech stocks had more room to break out. ♪ want a new drug >> so the play for a biotech bounce, mike looked towards gilead. 100 stocks would cost more than 10 grabbed. to pay less mike bought the june stock spread at 1.21. he needs it to rise by more than the strike price above 2.21 but spend 2g.21 just to bet on gilead? >> this is just a blueprint. look? you like it? >> yes, but we can do it for less. so to cut his costs mike then sold the july $1.20 strike call for 80 cents and created his call spread. he did something even better. he made making money even easier and here's how. the $2.21 he spent on the lower strike call and 89 cents he spent by selling the higher strike call he cut it down to $1.32. now instead of needing gilead to trade above 11721 by july expiration, mike sees profits if the stock rises above $115 by more than the cost of the trade or above $116.32 by july expiration. >> alive! alive! >> don't get too excited because there is a tradeoff. by sel

so for the biotech bounce, mike looked to gilead. but with 1-00 shares could cost more than ten grand so mike instead bought the july 115 strike call for $2.20. now to make money mike needs gilead to rise above the strike price. he needs that to rise to above 117.21 by july expiration. >> this is a blueprint. now look, you like it? >> yes, but we can do it for less. so to cut his cost, mike sold the july 120 strike call for 89 cents and created his call spread. but he did something even better -- he made making money even easier and here's how. between the $2.21 he spent on the lower strike call and the 89 cents he collected by celling the higher strike call mike cut the total cost of his trade down to just $1.32. now instead of needing gilead to trade above by july expiration, mike sees profits if the stock rises above $115 by more than the cost of the trade. or above $116.32 by july expiration. >> it's alive! alive! >> don't get too excited. there is a tradeoff. by selling the higher strike call mike has capped his profits to the d

how about gilead? did nothing for months as people looked at whether they would squeak the margins because it was charging the too much for the hepatitis c cure? i emphasize cure. do you notice in the last month and a half gilead went from 100 to 119 in part because the hep-c is too god food for companies not to offer and it is stock piling for a transformative acquisition or should i say another one? in reel al ti the reason why they are in a position for a big deal, why it has the cash is it was willing to fork up $11 billion for a money losing company called pharmaset which the scientists gauged had a winner in the help tights c platform. gilead paid 89% premium for pharmaset. they knew there was no thinking about playing a role in it. gilead will only take a 9% hit to its own stock on the news. another thinger very few big pharmaceuticals would be willing to do. normally willing to do because soon to be lost revenues from another was willing to pay $2 is billion for pharma cyclics knocking the stoc

for me on this run up i'm going to sell it. >> i think gilead is cheap.g at 90 and everybody said it was left for dead. we're at all-time high 121. gilead goes higher from here. >> time for pops and drops. the big movers on the day. a pop for general motors up 1%. >> 1% and find ourself 305.5, 36. there are better places to be. if you want beta here bwa sold off. that stock has more upside. >> after earnings disappointment earlier, a pop for fedex up 1%. >> this is a name often talked about on this desk for the last couple weeks, slash months. it bottomed in march and rallied 13% and pulled off. the interesting fact is it made a series of slightly higher lows. if you play use the 175 stop to the downside. >> a drop for rite aid down 4%. >> this was an earnings mess and guidance cut. the important thing is it stayed above $8 which is support. i don't think you will make a fortune but not going to get hurt. don't panic. >> higher up 2%. >> yeah they did need help but the stock might need help and upgrade a big part of the move. hospitality stocks doing well

you think apple and gilead, maybe they're aberrations. so what's the largest domestic bank valued at? wells fargo sells at 13 times earnings. how about the largest international bank? that's jp morgan. ten times earnings. how about the biggest and best brokers? goldman sachs. ten times earnings. if stocks are so dramatically overvalued, how do you get those price multiples? after all the market share gains and all the opportunity versus what they had just seven years ago, how can these stocks be valued so low? and we're supposed to be worried? or consider that we've been spending a lot of time on the airlines. last week we spoke to gary kelly, the terrific ceo of southwest air. wanting to grow capacity by 8% and that's caused tremendous pain in the group, particularly when the ceo of american airlines came on. suddenly southwest at 11 times earnings and american at five times earnings looked expensive. the expands growing the wrong way. but today kelly came out and said he isn't going to increase capacity by 8%. he's capping it at seven.

. >> show my gilead shares, please? they appear to be perhaps breaking out.end of ours on twitter pointing it out. stef, what do you think of health care? >> one of the groups that's not exactly cheap. but i like it because there's innovation, there's m&a. there's returning cash to shareholders a in buy-backs and dividends. but i think that they're a lot of different various subsectors, like biotech, hmos, that are trading a little bit on the whole m&a thing. think that that's exciting. they're trying to find shareholder value. so we're overweight the sector and i like it very much. >> i think the folks that have missed this, the problem has been they've always referred to this is a defensive area. this is not a defensive area any more. there's a lot of growth there, you get the yields and a lot of good reasons why, companies with well-managed pipeline,is been through the big pharma names, biotech name, gilead great performance after it bounced off the moving average. right underneath $100 a share. you look at eli lily, late yesterday had the huge surge, it f

. >> and you like gilead why? >> it has done well over the year and has a great demographic. it a bio graphic trading at 10 times forward earnings versus a trading 50 multiple and s&p 500 at 5% higher than that and it is cheap and good growth pros the hepatitis c treatment is the best in the industry. and your third pick i shares home construction the ticker itb. i'm curious you like this on a day when interest rate are moving up and we have mortgage rates moving up that is not great for homes and home builders. tyler, like a previous guest had alluded to, may entice buyers on the side line to miss the opportunity. but that said it is the first time in quite a we're starting to see household formation grow at a pace faster than housing starts so to the extent that ma into the home builders market we think it is under supplied and it could continue to put new homes out into the market place to be bought. >> and you like the three stocks you gave us but over all when market, a lot of value algss are a bit stretch. would you agree with that or not? >> that is not unfair. we thin

it's the second best performer, second only to gilead. a lot of folks taking a look at what's driving it this week and more broadly what's driving up lilly's stock. alzheimer's data that might be anticipated for next week although we don't have a ton of clarity on when that's coming is part of it. but there are a few other theories as to what's driving this. this is a lot of speculation. both jeffries and isi talking about a couple of these things they're hearing. one of those of course is this pipeline presentation's not just in its alzheimer's drug but a few others we'll touch on. another thing is options trading activity which maybe you could talk about in the next half hour, and just some block trades potentially. there's also some plax about possible activist involvement. we haven't heard anything about that but there's been a lot in health care. finally speculation about whether the company could potentially spin off its animal health unit although that's getting shot down as well. that's a big unit for eli lilly and they just beefe

gilead shares also surging 11%. acquire somes to of its assets. day for european stock markets. note, to finish on that the euro stoxx 50, the benchmark index of european blue-chip shares. on this day of this emergency summit in greece where the dutch finance minister there is a chance a deal could be struck this week. we saw the biggest increase for three years. every single stock rose 2% or more. definitely something in the air. i'm not sure i can take it. right, mark. he is excited. the chinese market is going to reopen tomorrow after a three-day holiday. last week the worst selloff since 2008. riveting those has that story from hong kong. david: chinese markets were shot on monday. on monday. 13% drop over five days. the reason i mention that is investors very heavy on the retail side. comments we are likely to see a bounce back. the question is if that would be a technical balance. this is the biggest test so far. u.s., for the the big stories, and of course the markets taking the lead from europe. >> right now we are seeing a broad best rall

mark: it seems that gilead is pricing this this way because they can. is that the case?k, wes price these drugs at the same level as existing standards of care. our drugs are better, and moreover, you take our drugs for a short poem till a time and you can be cured. so you should not -- over a short period of time, and you can be cured. so you will not be in the hospital or needing an expensive surgery down the line. unfortunately because of the not particularly rational way that our health care system works, you do not end up with the cost being spread out in a rational way. you end up with one payer being responsible for the whole load in a short toe of time -- in a short period of time. mentioned -- are there a lot of cases like that? paul: yes, there are an increasing number of cases. they involve not only private insurance but also in some cases being covered by medicaid, the less well off people, which is similarly in some states telling potential beneficiaries you're not sick enough yet, so we will not reimburse you for this drug. which is something the drug compa

gilead sciences trading at a record.e are seeing so many health care stocks outperform this year with direct tv up about .4%. helping to lift the nasdaq. hasbro trading at a record and papa john's pizza, all of them at records. i want to point out another nasdaq stock that has had an impressive today performance and that is trip advisor. it is gaining once again. marriott will be participating booking trading, so the shares have been gaining on that. scarlet: thank you so much. mark: let's take a look at some of the top stories crossing the bloomberg terminal at this hour. raise is in talks to money at a valuation of $24 billion according to a person familiar with the matter. that would make the home sharing startup one of the most valuable private companies. it's almost four times what it was two years ago. berkshire hathaway is increasing its stake in heinz to about 52.5%. this comes ahead of their merger with kraft foods. buffett was able to add a 5% stake as part of the deal two years ago when berkshire and 3g capita

gilead keeps hitting new highs. let's not forget how good the junior bio techs can be like receptos. ground breaking drug that can treat frefrg multiple sclerosis bowel conditions are and crohn's disease. or bio jumping another for radius health which is catapulting another 5% and they are going to be on the show. these drugs are working. that is why the stocks are moving. because these are successes. and there are far fewer failures in bio tech. the strilss can lev state here. these companies have been totally hostage to a potential european slow down as well as the weak euro. with greece settled we can -- let's say we hope for better than expected guidance even if the actual quarters won't be that good. that's already baked in. look, same goes for the consumer package good stories and power plays hobbled by the strong dollar and the weakness in europe. i can't tell you how much these stories have been distorted by the strong dollar. it's been a nightmare. people are taking time to smell the roses in housing becaus

we like biogen gengen gilead.ny that's basically been lost making millions of dollars for the last few years, they're about to get fda approval of a new breakthrough cystic fibrosis drug and i think that stock moves higher because of this $10 earnings over the next few years. i want to own that stock on this earnings cycle. biogen same thing. possible new alzheimer's drugs coming. we see that stock moving higher. then gilead same thing. huge profits. low pe. we think that stock moves higher because you're going to be building that pipeline. >> the second part of my question is which companies do you think are the best potential m&a candidates either as someone that has taken over or someone who is going to do the taking over? >> yeah. we would point to biomarin which had great news earlier this week confirming our bullish pipeline thesis is an orphan company doing $5.2 million in revenue. we think that stock's perfectly positioned over the next few years. this is all shaping up. you've about biomarin on the show b

i want to make it clear to people that i have not backed away from biojen, from gilead.of these. including the now controversial celge. these are the biotechs of the big pharmas. and biojen has a great drug against alzheimer's that could be breathtaking in its halt of the disease, we all hope. >> caller: i am down 15%. what's up with spirit air in specific and the transports? will they bounce back? >> the airlines are now in the house of pain. why in the house of pain? because gasoline jet fuel is going up. at the same time they are now being more competitive and adding capacity. this is a nightmare for the group. you've got to wait until after they report again and numbers come down before you get any stability. as long as numbers are in flux and going lower, the group will not get its sea legs. this is just how it works. we spoke to doug parker. he said listen we have to play the game of -- [ buzzer ] >> of competition too. and then we had gary keller from southwest. again, it looks like the group's in flux. you don't buy it when it's in flux. rick in illinois. >> call

big cap, when talking bio-teches, those big cap names, look where gilead is right now, just pushing thatig number. nice pharmas as well continuing to the upside. >>> can a stock that's gone up go up another 18%. knocking about netflix. laura martin raised her price tag today $680 a share. laura welcome. why is now the time? >> netflix has been down three days in a row. it's down $7 today. but we had pressure because of the alibaba ann announcement because they were going to try to get there in china. we don't think it affected either the u.s. or european business. we didn't have china in our numbers because it's such a difficult market to enter. >> laura, would you say that most people do have china in their numbers because they weren't gotten that far yet? they've only got 21 million sub, so far, internationally, there's plenty of room whether in western europe or all overt globe. but is china factored in in very many of the folks out there following netflix, or no? >> i would say no. i think this action by alibaba sort to protect a core business, core geography in china. there's lots o

tractor supply, gilead sciences and directv. shares of news corp also pushing higher. company will begin paying a semiannual cash dividend for the first time since separating from twenty-first-century-fox in 2013. job cuts were also announced for "the wall street journal" and "dow jones newswires." david? david: tragedy in south carolina, the massacre in the church leaves nine dead. 21-year-old alleged shooter is in custody. we're live from charleston right after the break. melissa: president obama's trade bill still hangs in the balance despite clearing one hurdle from the house. coming up where it goes from here around what it means for your money. ♪ if you're an adult with type 2 diabetes and your a1c is not at goal with certain diabetes pills or daily insulin, your doctor may be talking about adding medication to help lower your a1c. ask your doctor if adding once-a-week tanzeum is right for you. once-a-week tanzeum is an injectable prescription medicine that may improve blood sugar in adults with type 2 diabetes, along with diet and exercise. once-a-week tanzeum w

i'd be getting out of this one but i tell you, the one you hold is gilead.shed is below $100 last year, took it down into the $90s, $88 or something. it's a 27% winner so far this year. a lot more to the up side from what i hear. >>> "market flash" time. don chu. >> let's talk about big pops. because it is the brazilian steakhouse that ipo'd today. currently $25.79. that's a 28%, let's call it 29% gain over its ipo price of $20 a share. that was boosted from a previous range of $16 to $18 per share. so far about 6.3 million shares have traded. they sold 4.4 million in the offering so the entire offering of stock has turned over at least once so far today. just an update. it is a smaller cap company, probably worth around $600 million or $700 million at this point. but it continues this hot streak for restaurant stocks in ipos this year. >>> josh. you said -- see? >> i know. but -- >> i was going to say -- i literally was going to say, for obvious reasons but i didn't. . >> don't cut into my talking time. >> in the break you said are we going to hit fogo. you

. >> great growth in a gilead, especially acquisitions and trading at a third of that.you're talking about biotech, got to be specific. large cap biotech is cheaper than big cap pharma. okay. but, but a significant portion, more than the majority of small cap biotech are vastly overvalued. you have to be selective. >> but, you know, i think the big risk, and this was the big moneymaker last year was crowded stocks, even if they look great fundamentally, can get hit if you see outflows from active and passive. that's what i worry about with biotech, it is super crowded. >> okay, coming up, oil is moving lower, opec remains high. could this be the time to bet big on crude? ahead of the opec meeting? the best place in the space right now are next. tlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't

i like gilead. >> beakers. >> there's still time to protect yourself even though the vix is still up. i think you buy some spy puts. >> karen. >> painful one could be throwing good money after bad but i bought some more kors. if you're afraid because you don't know the down side you can do an august call spread. those were pretty liquid today. >> guy. >> honestly. welcome back to both and you karen. it's nice to have you guys. same day, bang. >> bang, we're all back. >> kite pharma. that juno news. that hole cartise space, immunotherapy space. kite goes higher. >> i'm melissa lee. thanks for watching. see you tomorrow 5:00 again for more "fast money." meantime, done go anywhere. "mad money" with jim cramer 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 cramer america. my job is not just to entertain, put it into context, to teach you, so call me. or tweet me @jim

you get gilead, you get amgen-u get biogen, regeneron, get all of them and you get inside lailted toin sxent to these binary events and that's what the retail audience should focus on. >> coming up on the program oracle earnings on deck. the tech giant is supposed to report after the bell tomorrow and some traders are betting big that the stock will move higher. why? perhaps they had history on their side. and we'll explain that when we come back. you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. and life gets lived. ♪ hp instant ink can save you up to 50% on ink delivered to your door, so print all you want and never run

this is the opposite of the celgenes and gileads. this is not a one trick pony but pretty close.hat happens. big short interest about 10%. to me it's imperative that effectively holds right here 25 bucks. it's going to be a hyung volume day tomorrow. you're not buying this on valuation. but if you do see a flush tomorrow on a day it trades north of 10 million shares and it holds 25 this might be worth a look. >> let's bring in cnbc's meg tirrell for more on avalanche. dom was saying there's a conference call going on right now. have you been listening in? have you heard anything of note? >> yes, mandy, what i'm hearing right now, avalanche, what it's designed to do it's a gene therapy. what they're trying to provide here for macular degeneration which now is treated with maybe monthly or biweekly injections into the eye, now, they're trying to make that less frequent. and actually potentially only treat once with their gene therapy treatment. and then actually solve the problem. what we're seeing and hearing is people have to get follow-up ones. the company has not been pushing i

and gilead is very innovative.'ve seen quite a bit of hesitation. you've seen the interest rates selling off. 10-year has moved higher but there is concern they're going to raise rates by september. how does this impact the overall market and do you worry about what happens when they do? >> they won't raise rates this year. that's not me that's the vice chairman of the fed in israel speaking. he thinks the global economy is too weak. we don't have the wage growth. the report was good but downward payroll. people get two temp jobs, they get counted twice. the household survey had issues last year. i mean there's so many issues. they're not going to raise rates. then they hit the election year. no one wants to raise rates next year. >> you're talking about another two years before we actually see the fed stepping in which is crazy when you look at how far the economy has come. >> officially when i give a talk, i say they're not raising rates in my lifetime. then they want to know how long i'm going to live. but on a

that includes adobe, hasbro comcast, the parent of cnbc express scripts and gilead. the biggest impact on the nasdaq 100 is apple. we've been talking about it all day long with the company, reversing its stance after taylor swift's open letter to the company about paying artists, writers and producers for the first three months. facebook trending higher after unveiling a new mobile platform for ads at an advertising conference overseas in france. also biogen hitting nice strides today. i want to end with some of the airlines here at the nasdaq that are making nice moves after the "barron's" piece and talking about lack of competition. american airlines jetblue and spirit. >> thanks. we are heading to the close. less than 50 minutes left in the trading session today. the rally mode we were much higher earlier. dow up 118 right now. s&p up 14, nasdaq in record territory. >> up next the return of merger monday. we'll tell you which companies are looking for a hook-up and which ones are trying to fend them off. >> also ahead, gopro supplier ahmadu brela tanking again aft

. >> you said you liked gilead and ulta. >> i'm proud to be a shareholder.epatitis-c problem. they've done a lot to help america. >> it comes at times with an $80,000 price tag. >> that is what they are protesting. people who had the disease would be, are thrilled to somehow get that $80,000. the other alternative would be death. >> we mentioned greece and potential contagion. what happens with puerto rico and decisions the government may make? >> puerto rico has done what we are gradually doing. not so gradually. really, there are a lot of our states that are almost broke. illinois and probably new york almost. we don't do anything about it until we can't pay our debts. the same governor of puerto rico who said we can't possibly pay our debts just a couple of months ago said how ridiculous people thing we can't pay our debts. >> assured guaranty is one of the companies you've been shorting because of this. >> yes. >> is that still the case? >> yes. >> do you think their exposures are beyond yesterday's 16% hit to those shares? investors are waking up to thi

. >> reports that gilead sa value di, that china has rejected a patent application. >> when you have cure it tends to trump everything. the company that i continue to focus on is allergan. when they bought that double chin kythera, that is just going to be run through the pipeline of dermatologist. elective surgery versus injection. and then an anti-cholesterol pill. there's so much good news in that group. and then janet yellen -- >> i'm sure you've seen some of the stats about how much the sectors are up? >> i'm yelling about yellen. the data is not supporting any sort of rate increase and i believe that that group was incredibly well when you have a phase 3 drug coupled with a slower paced economy. >> when we come back this morning, chris sack a calling out the company for in his words being sloppy and confusing. what will it take to get a greek deal? we'll talk to charles dallara. s&p hasn't gone four days up since january. it will try again today when "squawk on the street" comes right back. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and aler

gilead sciences. losers on the other end of it, we have siriusxm radio. these are just today's looks but these things, down like 100%. just way down in the last 15 years. anyway, checking markets more broadly. great day, up almost 200 points. neil is back with "coast to coast" in a moment. when you're not confident you have complete visibility into your business, it can quickly become the only thing you think about. that's where at&t can help. with innovative solutions that connect machines and people... to keep your internet of things in-sync, in real-time. leaving you free to focus on what matters most. neil: a lot going on in washington today, not the least of which this trade deal they voted on approved today. that doesn't mean anything what happened in the house. what it means it goes back to the senate, they hope to have this wrapped up before the 4th of july holiday. you know washington. things don't move exactly at lightning pace. "the intelligence report" host trish regan is in washington, putting a kick to them here to get stuff done. very big n

the second stock i'd like hat in the health care area -- there are plenty of them -- is gilead.relative performance but also good valuation. that's the kind of thing i look for, positive relative performance and really good valuation. we've got them there. but again, be patient! dig your heels in! in time we're going to get even better buying opportunities in all the stocks that i like. >> all right, guys we will leave it there. thank you very much. >>> well it has been a pretty solid start to the year for the home builders. the home builders index up. many of those home builders are moving higher on the back of a strong confidence report and a deal. let's go to diana olick to run us through the details. >> reporter: home builder sentiment took a surprising jump higher in june. more than twice what the street was expecting on this monthly index from the home builders association. sentiment moved higher by five points to 59. anything above 50 is considered positive. that's the highest since last september, and a year ago sentiment was at 49. that is in negative territory, it's be