Mean for the stock. But first, while alcoa may be grabbing the headlines right now, one sector will determine the next move for the markets and that is the financials which saw a decent bounce today after a brutal start to the year. What matters most to investors and the big banks, what do you do heading in to the most crucial earnings season yet . Guy. You ask yourself, is the valuation compelling enough to get in ahead of earnings. A lot of people say yes. Same amount of people will say the virn henvironment we find ourselves in, this will take a lot of time to figure out how to make money again and the yield curve continues to work against them. I heard a commercial today with Bernie Sanders talking about how he will break up the big banks. So a lot of rhetoric works against. Is valuation compelling enough to get into the names . I say let them report first, see what happens and then try to buy them on the trough. On the valuation picture, thats a tricky thing. Citi has not traded above book value for five years. So at what point do you say maybe its cheap for a reason . Yes, but citi is so far below book value that even if it doesnt get back to there, there is still a lot of room to go. Ill be looking for we all know that net interest margins somewhere been up ter pressure. I think that will continue to be the case. I want to see what other kinds of revenue they can generate. Also at some point it does make me nervous, the credit quality has been outstanding. Probably the best weve ever seen. And at some point if that starts to turn, then i will begin to get nervous. Because i think the valuation right here is cheap enough, i will hold them. They trade with small pes, they have lumpy earnings and people are expecting nothing great. Were okay with eh. And maybe the bar is so low i think that if there is any sector going into earnings season that has the potential to surprise to the up side, i would say its the financials. P primarily because everybody positions theyre going to be awful. We all know about the flat yiel. Youre starting to see deterioration in the sub plprim auto loan area. That could be the leading edge. So i would stay away from u. S. Banks. I think theyre more like utilities at best them trade one time books and maybe you get your earnings. Thats fantastic. I would still be worried about the european banks. What do you say about the biggest sector . Quality balance sheet, liquid assets. And to bks point, if hes right and they go to just one times book, we should be owning citi, bank of america. A lot of names. Because they are so low relative to where they should be trading if they were one times book. Theyre underbook. The yield curve will be a head independent. I think that continues to be a is they were getting a lift. Oil closed over 40. We had everything moving in the right direction. And the next thing you know, once oil closes, we start to fade. And as we faded, financial faded. Just as quickly if not faster than any other sector. We were talking about this a little before the show. I didnt see anything in particular i would say earnings and concerns. I know alcoa is no longer the kickoff for earnings season, but we still consider to be. But as we get into earnings season, i think that sentiment again just stays very, very low right now because of the concerns of how are these guys going to make money. But look at some of the growth names, too, like facebook. A lot of tech names were down most of the day. So you did see this broad market rally in the morning, but the names that people have been hiding in, that was the thing that highlighted to me that the growth names, people seem to be getting out of tell from the get go. So how does that set us up for financials which is already facing a lot of skeptics . I think people say this will be the trough quarter. Not the kitchen sink, but a trough quarter. I dont know Going Forward how the environment will change that quickly. There is no ipo calendar seemingly. The trading environment is difficult to say the least. Karen talked about the yield curve. That didnt seem to be getting any better. If anything, its getting worse. So i dont think its a one quarter thing. At a certain point people say theyre too cheap. Citi bank at 60 of book is pretty compelling, but the environment is difficult to navigate. And part of that is the regulatory environment. Is wall street being vilified to the degree that there is that kind of overhang on the banks that weve seen this biotech . It feels like that to me. One thing i would look at is the economy has been improving and we talk about the Balance Sheets and a lot of different drivers. But Home Improvement is on the rise. Loan growth could be something that they could lean on. But the liquid assets what do you like in financials . I think it depends on which part of the financial world youre in. Long term, i still love because of what we were talking about valuationwise, bank of america and citi. Best in breed is still jpmorgan. It seems to be Getting Better and better and better and if the dollar continues to be on the weaker side of things, fx is no longer the headwind it was for masters and visa. Which are you short . Well, still the european banks. Deutsche bank, i think that is probably the best short out there. But the dead unicorn trade, first republic, silicon valleys bank, they both service that particular area. And then another area where all the risk is, mutual funds and etf s. So black rock is very explain what dead unicorn means. Mass evaluation because of the potential that they might have. Right. So like thats why i come on the show, i learn. All the unicorns are dying off. So you have to change the posters in your room. Our next guest says buyer beware, this a dangerous time for stocks. What is so treacherous, rich, in the charts . Well, the secret to success in any earnings season, its not just about the earnings themselves but the expectations for those earnings. And it cuts both ways. The good news is the expectations have come down 7. 9 year over year. The bad news is the chart of the s p reflects the fact that the bar has moved lower. Lets look back in time. You see coming out of the august flash crash, we get a 13 pral rally. First quarter, we know how the year started. And then we have the furious rally in into the end of the quarter and it brings us right back to where we fell oof the cliff there. So the expectation for earnings have come down, but prices have moved up. So the bar is actually still very high. Now, one sector where those earnings estimates, expectations, have come down the most, energy. Down 100 from the Fourth Quarter of last year. Now, the chart has made some vivid strides here. But the 200 Day Moving Average which has held back here to 201, and importantly we failed right in there just around this time last year. We failed here again. So once again, big test here for the energy sector. What is driving that . Obviously crude oil and the chart displays a viking simg t symmetry. 200 day, big move off the ebobom the, but we fail. So you have to look for a break above 2900 day in the underlying to drive xle. Now, heres where it gets interesting. You mentioned that financials, the banking stocks hold the key to the earnings season perhaps the direction of the market Going Forward. And that is bad news. We look at the chart of the bkx here. We have a breakdown from a three year comp what happens here, we get the throwback into that prior support which becomes resistance and we fail miserably, down 14 year to date on the bkx and thats a problem. So what is behind the banking stocks . Your yields. This is your 2 level and youve been moving lower. Lower yields are bad for stocks, bad for bank stocks. In an environment like this, you want to be buying bond proxies like utility, telecom, staples, not bond traders like Morgan Stanley and goldman sachs. So what the bottom line . Because weve had a powerful rally without outperformance by the financials, weve had participation but not outperformance. So im wondering what you think is a takeaway from all of this. I think were seeing some clear signs of trend exhaustion. We have markets that have finished on their lows even as crude oil has grown 9 . So once again, 14 move off of the lows, were transitioning into a period of historically weak seasonality. Were facing the potential for brexit. So you have all sorts of fears at the tail end of a very strong advance. Important sectors like the banks lagging. Thats not where you want to be. Rich, thanks so much. How concerning is it that energy seems to be facing the most head winds and that has been the gainer . And so we see it over the last two weeks or so where energy came off the last two days. Oil has been doing very well. But that has been one of the reason why is weve had all these problems particularly the banks. If you start to see oil come off again, that will be an issue for the financials. Youll probably see those go down there. The one thing that i want to add also to what rich was saying, look at some of the International Stocks like the bett dax and nikkei. The s p 500 looks like the last man standing. Do you think that the s p and the oil market has uncoupled from where it was two months ago . Well, it hass euncoupled, bui think it will recouple. It can goes back to the dollar. We have a little bit of reverse on the dollar today. But if we get a strong dollar, no reason why oil shouldnt go below 20. There is a big meeting on sunday, thinks it will be a disaster. It was a few months ago, as well. Kildoff thinks below 20 bucks. Ovx up 3. 5 , that is sort of a decoupling. Other things that give me concern, transports rolling over. Go gold market is stubbornly strong. Gold has been strong and i think when you talk about oil, are we in this new range. Sort of feels like this to me. I dont know if i can say the upper end is 42, but we close over 40 once again and it seems like 37 seems to be a tough area to block and get through. Now, to richs point, the xle is banging up against this level. If oil can actually get through and start trading and closing above 40 for multiple day, we might find ourselves in a new spot and we might see the s p start in anticipation now or do you wait . I think you have to trim into it because the fact the resistance is there. Up next, alcoa falling despite an earnings bead. Could it spell more trouble ahead. The lats lines from the conference call. And the market is predicting new jersey mohuge moves for three dn stocks. Well tell you which one they are. And there is another commodity quietly making new highs. 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And 35 to 37 cents per share. Originally they had guided for 45 cents. Back to you. Thank you so much. And were also watching shares of cisco. Theyre down by about 1. 3 on the back of this news. Yeah, just to elaborate a little more, weaker demand, but they also talked about about timing issues in the u. S. And middle east asia. So i dont know it well see that in subsequent quarters. That could be mitigating a little bit. But a meaningful miss top line and bottom line. Seems to now take the quan dumb leap. Juniper is not that expensive a stock. I think it trades 11. 5, 12 times forward earnings. But you might want to take a look. And this is a quantum leap now. But i wonder what this if anything means for ibm and their quarter coming up. I want to say in a week and a half or so. Cisco trading 27. 25. It has a 3. 8 dividend yield. You dont like the valuation levels. Everything weve heard going into this, this could be just juniper specific. Maybe its more just directly towards what their end user is. But theyre talking about weaker demand from the enterprise. I think cisco is far more grand and i dont know that i would buy s s buy cisco on any pull back. Lets get to under arrest mower oig falling out of better after sloweding sales. Maintaining their underweight rating on the stock and weighing heavily on jordan spieths meltdown on the 12th hole. Under armour reports next thursday. So if it was just because of jordan sait, you probably buy. But what Morgan Stanley highlighted here was that their womens Apparel Division isnt doing as well as they thought. So theyre saying about 20 of earnings or Earnings Growth will come from the womens apparel. There is a lot of competition out there right now. So to me, i actually do think there is a good call on Morgan Stanleys part and i would take some profits. I think there is too much competition. There is nike, lululemon, every other single designer brand seems to have its own line of athleisure. I think foot locker which was hit hard on this i think is so far overdone. Foot locker sells under armour as well as nike, more nike than anything. But to have it trade net of cash about 11 and change times versus the under armour multiple seems ridiculous and overdone. So when you hear about under armour and womens apparel, it doesnt make you concerned about foot locker . I think the stock expresses excessive concern versus what i think will actually happen. I wear athleta bottoms and tops. What do they call them . Interesting, because they only make womens wear. But wear whatever you want. Its snug. So the problem with selling under armour, now youre getting shortages have been growing i think north of 30 and it trades now i think away 25, 26 types forward earnings. I think you wait, hope Morgan Stanley is right buy it on the dip. Shorts will get squeezed after earnings 37. So the market share thing, i havent heard other folks really talking about this, so its pretty interesting Morgan Stanley talking about loss of market share. The shoe part of the business is phenomenal. Growth of 95 was massive fp only 17 of what they actually come doing in terms of sales. So you just wonder are they going in the right direction and where are they losing. If theyre lose to go anybody, i have to think its lululemon. They have made a massive comeback. Well over 60 plus today and it actually pulled off with this sentiment was bad, but id keep an eye on that one, as well. When you look in the online sales and growth, i think lululemon is a buy on the pull black. Coming up, teslas warning for its model x drivers, could it have implications on the stock. Well hear from fim are a bow in a special report. Youre watching fast money. Money will always be paper, but gold will always be gold. That might be the case, but its another metal that the commodities king says you should be watch position about hell tell you what it is. Plus three down stocks could hold the key to where the market goes next. The names and how you can profit when fast money returns. [beekeeper] from bees to business expenses, im in charge of it all. So ive been snapping photos of my receipts and keeping track of them in quickbooks. Now im on top of my expenses, and my bees. Best 68,000 employees ever. Thats how we own it. I could get used to this. Now you can, with the luxuriously transformed 2016 lexus es and es hybrid. Welcome back. Take a look at alcoa. It is lower in the after hours to the tune of 3. 7 . Susan li has all the details. I think the main takeaway from alcoas earnings was a miss in revenues for the quarter which means that the beat and profit owes more to cost cutting than actual sales. Part of the cost cutting has been layoffs confirming that they did reduce their workforce by 600 in the First Quarter, planning further of 400 and also considering laying off another 1,000. When it comes to global demand, alcoa is revising down the demand broadcast, heavy truck production. The ceo was just on closing bell and lets listen into what he had to say. If you look at this quarter, you really see profits are up in all of the iconic segments. Iconic is the name that weve given to the Value Add Company that we would soon launch. And at the same time, you also see on the commodities side the two segments are holding up in spite of the very strong pressure on the market side with low prices. So the ceo there reaffirming that the split will still happen in the second half of this year. Still not confirming a specific date, though. Alcoa shares have been down so far in the year. Trading closer to the seven year lows. We have lifted off the bottom. And were a it wwaiting the res and Business Wire calling it a power outage at a Third Party Colocation facility for this. And right now saying they cooperate put the results up in time. Back to you. Thats odd, a power outage at a third party the point of having colocations, that is a backup system of some sort. But moving away from that, what does this say in terms of the transports . We saw for the just a rollover in general, but within todays sessi