The dow and s p closing at new highs for 2016 and what stood out was an outperformance in tech and financials. Salesforce, action vision, metlife, bancorp, they lead us higher. What say you . I will say this. Earnings expectations have been beaten down so much in tech and i say to you if theres any shed of light whatsoever those that have, you know, that are beating have been rewarded by it as far as guidance is concerned. Look to guidance. If guidance is better. Companies are getting rewarded for that and youll see that in the performance of names and i look at the semis and they have been beaten down so much. Mike ron is a name trading up after hours, a stock thats washed out and i say its probably taking a look at on the buy side. Bar is low for financials. Terrible on financials, and i think at this point its worth at least taking notes so ive said a handful of times even in the last few weeks im not a buyer for financials because i think they are cheap and not because they are going out of business but because their earnings multiples may be probably farrelltive to where the near term earnings power s. Having said all of that, the bond market backed up on yield today because we were in overbought condition on the tenyear. Thats a big to do about what financials did today. Do i think financials have some room to run . Yes. Would i be comfortable owning best of breed banks here . Absolutely, but to say the banks will revalue in the short run i think is a very difficult call to. Say that they are a great investment for a longer term investors absolutely. The context is maybe investors are wondering about the valuations for the Top Performing sectors, telecoms, utilities and Consumer Staples and are going to the sectors that may have not seen as much appreciation. Financials, when you say the bar is low, ive been hit by the bar many times hitting the financials but i do think the bar is low. The stocks i own, citibank, jpmorgan, bank of americas, earlier this year they were hit on the financial turmoil and then hit on oil and then Deutsche Bank and also on their trading desk. Really being hurt. I think that the market improvement should help the trading desk part of it. Seen the oil dissipate a little bit. The bar is too late. Have to wait what jpmorgan says but i like them here. I dont know if they move up in the short term, but im fine just holding them here. Not for me, no. I mean, listen. Look at it, yes, the bar is low so could you get a pop in them. Okay, fine, but the operating environment is awful for these guys. Seen it time and time again. Capital market business not coming back to the levels that we used to think it was. Look what happened at block rock. Laying off 400 people. Not at healthy sign of a healthy industry. A backup in yields today. That will help out the financials a little bit but not enough for me to get involved in. In fact, id be selling them. Let me ask you a question on that and i think you make a good point. Trading vehicles. From a longterm perspective i dont know if i jump in here and make a determination and i look and say they got beaten up so much for their energy exposure. And look what happened to oil today. Did they rebound . No. I think not. So you look at it and say they got beat up for it. They havent seen the spike up from the standpoint. Up 10 off the lows of off of jamies bottom there. Had a pretty good rally. From the oil exposure to the investor days, absolutely ridiculous. Again, so people are pricing them, especially the european banks as if their capital adequacy was not there and they had to do capital raises n. Deutsche banks case brian may prove right on a capital race. I dont know. With Deutsche Banks Balance Sheet its very complicated. I dont think they are going to and i think they will be bailed out at every single turn but the question is the credit contagion something that banks are bearing or is it an earnings impact and i think david is saying they still havent gotten back that credit bid and i think that in the short term they are oversold and, yes, with the fed out of play, look whats going on with high yield, and look at the hyg and the junk and the jnk and Credit Conditions, no question they are tightening. The atlanta fed said the fed has moved 300 on an implied basis. A onetwo punch. Not just the Credit Conditions but its also wheres the yield curve going . Didnt janet yellen saying its staying flat. Thats part of the narrative. But they will well capitalized, so much more so in the past. You look at it and say dividends. There could be dividend hikes with some of these banks. Returning cash to shareholders that. Changes it a little bit so i look at it and say for a trade, definitely buy them. Buy them as a utility. Or would you rather buy utilities . Id rather buy utilities because the operating environment is more stable. I dont think the operating environment for u. S. Banks i never said u. S. Banks are going out of business. They have well capitalized. If theres a global credit contagion they will get hurt, of course, but they should trade at roughly one times books and others trade like that, just like the utility does. The dividends are not high enough for me to say its a substitute for utilities so i dont see any reason why i need to be in banks right now. Its not a great environment for them. Oil staging a major reversal as new data showed inventories stayed at the highest level as hedge funds are the most bullish on crude. Well robert ray robert. Great to have you with us. Thank you. Hedge funds are getting more bullish according to the latest cftc data. Are you . Well, were not. Thats actually part of what has us concerned so obviously the price of oil has had a fairly significant move up here over the course of the last six or eight weeks, and i think in the near term, right, you know, what concerns susthat we think a lot of that has really been driven by the dollar, the idea that a dollar has gone down sort of over the time frame the last six to eight weeks and at the end of the day what youve done suave created a massive short squeeze in the oil market where the net length of the contracts outstanding in the future contracts have gone way up, right, to sort of a record level of almost 365,000 contracts but the real reason for that is because of 200,000 contracts covered on the short side as opposed to actually real length added on the long side so that leaves news a position where we have, melissa, as you indicated, you know, a very Long Exposure across generically the hedge fund community, right, and the second part of that of what becomes interesting is while the front end of the curve has rallied a lot the back end of the curve hasnt moved a lot. Sorry, keep going. So i think that the net effect of that is that i think as the First Quarter numbers come out and we start to hear from the producing community in the april and may time frame were going to find out that theres been, you know, sort of almost a shocking but a massive amount of hedging in the 2016 and 17 calendar strips. Right. A lot of the producing community is using this rally, right, as a way to effectively lock in prices and also begin completing a bunch of drilled and incompleted wells. Isnt that ultimately bullish for oil if a lot of these, especially the ones, the Balance Sheets most impaired are heading off any free cash flow. Production from nonopec, hearing it from the dadsiacs and hearing it from other places around the world. U. S. Production is down around 4 year over year. Youre getting to a place here and i know you care a lot about macro and the move in the dollar from july of 2014 to where its gone you have to have a view on the dollar in order to have a negative view on oil. To some degree, yes. Were concerned on the margin the dollar has maybe gone a little too far too fast as well so that would be one comment, right. Second comment would be that, you know, part of our view here is shortterm, right, has to be distinguished short term versus long term so while i hear and understand the idea that other parts of the world they are starting to see production and volume declines as well, right, what really ultimately drives crude price is the level of inventory so theres a strong degree of correlation historically between periods of time when inventories are drawn and oil prices go up and conversely, right, when Oil Inventories are building and oil prices tend to go down. The disconcerting part of that is, right, you know, in the very near term, the last sort of six weeks, weve put another 30 Million Barrels of crude oil in inventory so were not seeing the structural fundamental dynamics that ultimately drive prices substantially higher, right, so we think this has been more technical than fundamental right now. As we get longer out there in 2017 and 18 we have frankly a more constructive view of the environment and the world. Were just cautious in the relatively near term sort of measured in days, weeks, maybe a few months, right, as opposed to the longer term structural thesis. Bottom line it for us, rob, in terms. Next phew weeks, months, short term. Where does oil head . Well, i mean, our view would be lower as you go sort of through april and may, you know. We need to take the idea of 25 rates of return at 40 oil in this subset of 4,000 or 5,000 on completed wells off the table so the net effect of the rise in oil prices is that it is now very economic, right, for a lot of these producers, guys like eog and guys like anadarko that have literally thousands of drilled incompleted wells in a they can translate into relatively immediate production to start bring all those barrels to the market, and so the bold case ultimately rests on the idea that the u. S. Supply curve does roll over meaningfully and really thats shale, right, between now and year end, and at 40 oil were just concerned, dollar issues aside, et cetera, that the drill incompleted inventories are basically going to continue to carry the supply curve longer than people expect. Rob raped of rr advisors on the fast line tonight. Oil a good short he says for the next couple of months. Thats the point i was making last night. I think you can be short oil here. I think, you know, not only is it you look at the inventory levels but also seasonally youre at a point where this is a weak period for oil, and if you look at the action in the oil market over the last couple of days. Yesterday we had oil down 2 , 3 , right, but even though the dollar was weaker yesterday, so to me that says that theres a nonfinancial seller in there meaning hedgers, producers hedging. Same thing happened today again so it looks to me like producers are probably coming in, hedging these levels. Youre going to see production flat line if not go higher. Thats totally fair. That that should cap things and if you hear about some of the supply cuts that could happen. What happens if theres a cut . I realize probabilities are low and go buy a bridge if you think thats going to happen, at least the prevailing view and ill sell you one, but i guess the way i look at oil right now, back to what rob was saying. Rob knows this better than any of us and as we get out to 2017 if youre an investor right now investing in oxy, chevron, exxon and companies with great Balance Sheets that can be tactical now that will be here tomorrow and actually will be a lot better when it all gets better, why arent you making those trades now . Companies ant cash flow positive until oil is at 45 a bill so you look and say whats the upside in that, in my opinion . I wouldnt buy the equity here at all. Be careful being short. The commodities have a little more room to run to the upside only because positioning so negative. People are afraid and fearful. They got their heads blown off on the short side. Companies are very, very levered Balance Sheets, right, so the ones that right. Take the middle ground and buy ones with much more cash. Eog, anadarko what, rob talked about. When i look at the oil chart i look back at a much larger time frame, yeah, its been a huge move in the last six weeks, eight weeks, but my god what an enormous move its been in, you know, in the year and a half before that, so youll be able to pick the bottom. I dont know. I i would much rather be long than short. Okay. Up next, one of the Largest Industrial Companies in the world is sounding the alarm on the global economy. The name and what it could mean for the broader markets. Markets may be in rally mode and one thing could soon send stocks tumbling and later emerging markets seeing their best month in five years, but is it too far to fast. The warning signs that could soon have investors running for the exits. Much more fast money right after this. Became a stay over. And a parade rained on the sales teams parade. And they still made the meeting, without actually going to the meeting. 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With the savings that i am getting from the solar panels, its going to help me to have a Better Future for my children. To learn how you can save energy and money with solar, go to pge. Com solar. Together, were building a better california. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Apple kicking off top trades tonight continuing to rally after officially exiting barnlt. This morning the stock was marked to outperform. Much different than last night when Chris Verrone called apple dead money. As we can see in the longer term chart. 2,900day market is still downward sloping which is still a downtrended a we had ear looking to back away the strength here. All right. Lets play a little you make the call. Who is right, tim . I think cowan is and not just because david is sitting next to me. I believe march quarter iphone shipment expectations are down very low. They could surprise. I think the company ultimately on valuation and in terms of the peripheral product base is just fine. I dont need a huge march company. Yield and generation. And you may be owning it for the calendar fourth quarter. Right. Which well get results for in a year, right. I mean, they cowan made the case and simplified the note tremendously and also make the case that for the id phone 7 its going to benefit because the iphone 6 and 6 plus users they reach the point where they have to upgrade and they have hit that part of the cycle. That goes back to why did you buy apple . Im not all that excited. They are really not innovating, changing the phones here or there so i dont think youre going to get a massive run. What i said about a week ago you get a weekly close about 106 which gets me interested technically and what do we do now . Ill watch it a bit and if we get a pullback and it looks like its going into an upgrade cycle and i get a little excited about it, then maybe, maybe i might want to buy it. Youre opening to being bullish. Im billish so i would agree with cowan. The valuation is hardly stretched so im comfortable waiting here, you know. The metrics are very attractive. Im a believer in the iphone 7 and the upgrade cycle v. To wait a few months just for actual the introduction let alone the sales. Basically you three last night were listening to Chris Verrone and thinking we didnt beat him up ney enough. Exactly. Whats he talking about . I went back and looked at july 2015, and a note was put and downgraded the stock at 130 bucks a share and the title of the note was every rose has had a thorn. I remember that one. Great, great poison song. Bret michaels. Look at it now. The premise is really based put a bandana on him. Presentation of that fastener had a more broadbased ray than the street is anticipating that will create and drive the upgrade cycle. Put 135 target on it and which could prove to be conservative and ultimately this is really an opportunity to get a stock here. Its a shift in the narrative, if you will. If our checks are correct and they ultimately are much earlier in a mass adoption of that technology, you can have an upgrade cycle that can be meaningful. Chris verrone sitting at home. Listen. Market share in indiana. If that comes anywhere close to what it is in china, 15 to 20 , 15 million iphone units. 49inch phone and why they did it. Did it for the u. S. And really for china and em. India 2 . Coming up, emerging markets are ripping high and one strategist says dont trust the rally. Hell tell us what has him so fearful and why investors maybe running for the exits. Im melissa lee, youre watching cnbc, first in business worldwide. Meantime, here what else is coming up on fast. Troubling signs ahead. Just when i thought i was out they pull me back in. We know, we know, corleone, and well tell you why even though stocks may be soaring theres one thing that could soon spoil the rally. Plus go ahead. Make my day. Well, harry, thats exactly what tesla is hoping to do when its cheaper model 3 is unveiled tomorrow, but will it be enough to supercharge the stock . Much more fast money right after this. Welcome back to fast money. Take a look at chairs of medivation soaring after reports of a possible takeout. Cnbcs biotech reporter meg tirrell joins us. Whats up . Reporter medication is up after hours. I can confirm the company is working with advisors, but they what im told is they definitively do not want to sell themselves so thats the goal of hiring the advisers for the outcome. You never can tell what somebody might offer in people are interested in buy