Strong move in energy and material names. So joe, we have asked a question sort of every day since this literally began, whether you can believe in it or not. You say youre coming off the best week of the year. Youve got transports having a good week last week. That was a pretty encouraging sign. Is it enough . Well, we talked last night when the s p was around 1915 to 1920 about the possibility to get to 1945, 1950 and then well take it from there. What gets you there. What i suggested, you need to see the return of a lot of the momentum names and leaders from 2015 take the baton from the lagards. And you have seen that. You have seen the fang stocks coming back, facebook, amazon trading very how about one weak performance on your note. Facebook up 4. 5 . Amazon 9 . Netflix, 4 . Alphabet, formerly google, 3 . Youre looking for something to extend the rally for you. Thats what youre getting now. Thats why were rallying towards those levels. Is it longlasting, remains to be seen. That was the necessary component of extending the rally. Pete, the same question. Is it enough . And if i back it up by saying, well, okay, its great. Energy doing well. I think its less about the fang stocks. More about financials are the worst performing sector of the month. That should be concerning. So the fly in the ointment of this rally. Ill give the positive. The fact that the volatility index dropped 20 in the last week. When you look at the Oil Volatility index, another 20 . That was 81. And here we are in the low 60s. You look at the ovx. Volatility has come out. Oil moved from 26 over to 30 a barrel. We continue to be strapped to where is oil going. Its been energy and materials that have been leading this rally to the up side with a few others actually participating. But its not the financials, scott, to your point. Were seeing a little bit of participation today. Up a little over 1 . We would like to see a lot more of this to be a broad market. Can you believe in this more or think it can go anywhere the beliefability without the financials playing ball. The believability of this move for me is the fact that one thing ive been talking about the volatility index, we talked about back in august, it stayed for about a month and a half. Where is it right now . Its about a month and a half out. On friday, we closed beincognito the 50day moving. Were now in the 19s. I expect to see if we get towards that 200, scott, will we hold on to the 200 day moving averages. We break through that, seems to me like this market wants to really take off from those levels. I mentioned we have bill nichols here, head of u. S. Equities. How do you see it, bill . Welcome. Are we out of the woods or no . Nice to be here. I think were out of the woods a little bit. We havent really gotten back to a 50 retracement yet. I think until we get to that 1965, 1970 level, thats halfway back from this downward move. So, you know, i agree with what everybody else has said. You really need financials to kick in. You havent seen any material upside. Is that why its a punk rally here . You dont have any participation from financials, which everybody seems to think needs to get jumpstarted, should get jumpstarted. I hear people pick on the desk they like those stocks. Whats the story . I think the financials are the last to come out. What the good indicators we have seen, everybody is talking recession, we session, recession. When discretionaries bounce back, once you see that with some more strength, the financials come back. Remember, the financials ran last year because of the interest rates. Right now theyre down because you get negative interest rates. That will come back, and i think when you see that, thats going to be when were out of this bottoming phase. Part of the issue, bill, whats the catalyst to keep moving there, if you take Sector Performance out of it . Not going off an economic cliff, is it necessarily good enough . Is it . Well, you probably need the tenyear neelds to get back up 190, closer to 2. That will help, as well. Youve seen real defensive plays, utilities, telecoms have been the leaders. Which you like. Seeing money coming out of that and rotate into the financials. Right now youre bouncing off the lows. You need another 5, 10, 15 rally from here. Good point. So josh, what gets us that . What gets us that another 10 to 15 so that we can actually maybe believe in it more than some do . Makes sense weve gapped up right into resistans and kind of stopped today. 1950 is really that line that everyone has been talking about. And it also not not only was it the breakdown in january, but coincides with the 50day moving average. Clear that level, the next real landmark would be 2020, which would be pretty respectable, considering where we came from. And the thing i think is the most important to watch, market internals. Thats where the good news is coming from. When you consider that, less than 10 s p 500 stocks are now ten double digits this year. Again, a huge improvement. Another thing worth looking at, credit spreads. Youve seen a narrowing in very important areas like financials. Big ones and little ones. And thats got to continue, as well. I dont know about the banks playing catchup just yet. They are selling at a 24 discount to the s p. Extraordinary. I think thats with good reason. We have essentially turned them into utilities where they used to be growth companies. And that was by design. And then the second thing is how do they make money when more than a third of the worlds debt is now in a country where theyre discussing negative interest rates, if not implementing them. To joshs point, you do have pretty broadbased move, at least over a weeks period of time, which is not going to, you know, hang it on the wall and say lets worship that. But transports up 5 . Youve got biotechs, airlines, chips, discretionary. All with nice moves across the board. What do you make of that . I think youve seen a nice bounceback. The markets come back, 7, 8, 9 . The s p 500. The subgroups have these big moves. Were clearly massively oversold. The question is, where do you go from here . Do you see that, you know, sort of petering out, sideways action or do you see a Short Covering rally to get back to 2000 that will really scare the shorts. Right now, i think the short thesis is still intact. People are comfortable selling rallies. At what point does that stop . Thats a good question. That has been the trend. You get a few days or a couple days if you can make it that far, and people sell right into it. Now, they largely havent done that this particular case yet. Maybe it has to do with where oil is going. I dont know. Jackie deangelis at the nymex joining the conversation here. And jackie, steve weise hit me with an email that said a lot of the action youre seeing today, if not the majority is this roll forward of a contract to april. Accounting for maybe 75 if not more of a move. Thats what im hearing, as well. Dont move this energy rally. So march wti is going to go off the board. Were getting Short Covering ahead of that. This is typically a pattern that we see time and time again. A lot of traders. A little bit of a head fake. You also have Oil Prices Moving in tandem feeding off the action youre seeing in equities today, as well. And we did have that iea report saying that shale production is going to decrease. Thats not really something that, you know, anything new, lets just say, that we havent heard from the iea before. Yes, were expecting Shell Production to go down. We havent seen it. And no other news should be sending us technical levels. I will say this. The fact that april is now at the 33 zone, were breaking out of that high end of the most recent range here, and traders are saying this could be sort of that bottoming process. There definitely are those out there that want to see this is it for oil prices after we touched 26 and change for the second time. So its going to be a little push and pull. But today, not really the day to look at oil and say, this is happening on fundamentals or there is a major shift, scott. Thanks. There was a suggestion by some at least last week that you were starting to see a decoupling between stocks and oil. And whether that can continue, is extremely important. I dont know. I think as it relates to oil and oil futures, lets not complicate it. I think we were all reminded last week by opec and nonopec producers, what is really the benefit of being short oil at 27, 28. Youre playing for possibly another 5 to 7 on the down side. So i think that type of approach to the market is being removed. Thats legending stability to oil prices itself and reminding folks thats probably not the greatest risk reward trade. Bill, are we still going to be tied to the price of crude . It will be at the top of peoples minds. What are the fundamentals for the fixed income part of the crude market and what stress is there with whether its 30, 32 or 35 barrel oil, youll see stresses on some of these highly leveraged names. So, you know, the question is, if we get from 35 to 40, then well see. Sure. With low 30s, i dont think it matters. The bigger question that we still havent answered and ben bernanke weighed in on this at brookings. The big question, what does big oil tell us. Is it a supply issue or demand issue . I know there are very strong opinions on both sides of that. I dont think its been resolved yet. And thats why youre seeing this high correlation between u. S. Stocks and the price of oil. Because these are questions about the viability of what weve done so far in terms of stimulus. Whether or not it will continue. Or we have no control anyway, because of deflationary issues in europe and asia. Are you out buying stocks in your portfolio . I am. And i just came back from a consumer Conference Last Week. And it was the most highly attended conference in four years. What thats telling you, people are so scared, and theyre rushing to the Procter Gambles and General Mills of the world. Im taking the other side. I think youre not going defensive. No. I think when youre trading at 20 times earnings as a sector, i think there are opportunities. I dont think the market is done with the selloff completely. Theyre going to be opportunities. Because if this r word does not happen, there are so many stocks and sectors that will do well, including the banks, including the autos, including the airlines. But oil has told you, maybe were going to recession and now you see a bounceback. If the supply issue is corrected and command dmand starts improving, you will see give an idea of what youve been buying. I like the warners, delphis. I like the united. Youve used this occasion to buy more . Buy more. New positions in things . Im buying more on regional banks. I do think they have been completely oversold. And they are not exposed to international. They dont have any youve got to be selective. Not the ones in the midwest with oil and gas. But the ones that have been sold off and down 25 to 30 . Pete . Well, i agree. I think ive actually added to a couple regional banks and added airlines. So i added a airline recently. I think well talk later on. I think when there are opportunities out there, scott take a look in the Energy Complex itself. What really performed last week. How about the fact that pipelines are up 16 as a group last week. I mean, within various parts of this marketplace, there are bigger winners, even than some of the other winners when you look at where the xle was, the oih. You look at some areas that are even outperforming those. Last word. I would be very careful, though, about misinterpreting Short Covering bounces in areas like pipeline so buffett comes in, he gets involved, and kinder. And then all of a sudden youve got people that are way too short the rest of the group. You get this huge spike higher. I dont know if there is any longevity to that rally. The same with banks. Are they actually going to make a lot of money this year . If the fed is on hold with rates . For the next quarter, two quarters, three quarters . Probably not. So i would get very, very careful about Short Covering rallies and extrapolating what they actually mean. Real quick. Its february, a strong buyback month. The problem for financials, are they ready for the stress test. Theyre not out there buying back stock. Jamie bought stock. Sure did. And a bunch of others jump in, as well. Great to see you. Nice to be here. Bill nichols. One analyst says its time to sell trip adviser and expedia, despite their upbeat results last week. Hes going to explain why its time to check out now. And speaking of travel, Airlines Stocks have quietly taken off over the past week. And Pete Najarian is hopping on board. The names hes buying, next. Plus, why hedge fund pain could be your gain. Mike santolli explains that just ahead. Take a look at the s p sectors right now. Youre watching cnbc, first in business worldwide. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Its intelligent drive is msystems. Ng. Paradigmshifting. Its technologyfilled cabin. Jawdropping. Its performance. Breathtaking. Its selfparking. And selfbraking. Showstopping. The allnew glc. Mercedesbenz resets the bar for the luxury suv. Starting at 38,950. Man 1 he just got fired. Man 2 why . Man 1 network breach. Man 2 since when do they fire ceos for computer problems . Man 1 they got in through a vendor. Man 1 do you know how many vendors have access to our systems . Man 2 no. Man 1 hundreds, if you dont count the freelancers. Man 2 should i be worried . Man 1 you are the ceo. Its not just security. Its defense. Bae systems. Securing an early checkout. Expedia and trip adviser to sell today. The firm saying it needed theyre seeing increased competition in that space. The analysts behind the move joins us now for our call of the day. Scott, welcome back. Hey, scott, how are you . Good, thanks. This sounds like a mostly macro call that youre making, rather than stockspecific. Is that right . Its a mixture of both, actually. Okay. Moderating macro and then also some companyspecific initiatives at both expedia and trip adviser that would make them more exposed than price lion but also more exposed than other companies we cover, as well, if the macro were to turn. What impact has consolidation in the industry itself had on your call here . So in the u. S. Market, which is where, again, the focus on expedia and trip adviser ex paider, 65 of its revenue from the u. S. And trip gets 56 . There have been initiatives that have dated back as long as 15 years of suppliers deriving traffic direct to their sites. Theres a more Aggressive Campaign thats been initiated in the past week by hilton that offers discounts for going direct, as well as free wifi and other reasons to go direct versus going through the otas. But the bigger deal we think beyond that, which has been ongoing for some time, consolidation in the Hotel Industry. You have seen it in the airline industry, the governments proved it. You have seen it in the otas. Youre beginning to see rumbling in the Hotel Industry with marriotts proposed acquisition of starwood. With the hilton initiatives in a combine Marriott Starwood under those two corporate umbrellas, you have 30 of the u. S. Market. So thinking ahead a little bit in terms of that deal closing and marriott following suit, you have some more Aggressive Campaigns of driving traffic direct to sites. That could allow the hoteliers to try to manage down their distribution costs as they have been trying to do for the past 15 years. Youre saying because you have fewer brands, you have the possibility of those brands by passing third parties. Fragmentation of inventory as it relates to internet distribution provides significant value. As inventory consolidates, that reduces value. Ill give a data point that supports that. The average Hotel Commission in percentage terms relative to the average Airline Commission in percentage terms is about eight times. And thats because theres more fragmentation of Hotel Inventory than the airline industry. Josh brown. Hey, scott. How long before amazon comes in to travel, which has long been discussed and rumored and just completely blows this business out of the box, and makes it so maybe theres only room for one or two standalones instead of five or six . Hi, josh. Amazon has been in and out over the years. Years ago, they had a deal where expedia was essentially the travel portal within amazon and then they did it again more organically recently but seemed to pull back. I dont know amazons initiatives, but google is one of the biggest drivers of traffic to the site. And have been working aggressively themselves to drive more tools that get them closer to the transaction. So if i were looking at a giant in the internet thats really focused on this category, it would probably be more google than amazon. Scott, no move on price line, right . Youve had that as a hold . We had downgraded it earlier before the changing macro views hit and have we have held it in the highest regard within the travel industry of those three companies, which are what we cover, which is the online segment. And continue to do so. But continue to rate it a hold. I thought their quarter was outstanding and definitely fits the characteristics of what we look for. In businesses, we just have a hold rating at the time. I gotcha. Thanks for calling in, scott. Thank you. Scott over at steeple. Guys . You know, looking at the note and just thinking about the dynamics, price line, i think somewhere around a 60 to 65 billion market cap. You have to wonder, do you at some point expedia and trip adviser better off combining those into one for survival against price line. The other thing you have to be careful about, and i agree with the downgrade, corporate customers will now get better purchasing if theyre going straight to marriott and storewood as opposed to going through websites. I think you can see potentially more margin pressure. Pete, you have some unusual activity in a travelrelated name. Right. Well, we talk about the airlines all of the time and last week just the outperformance we saw in the Airlines Versus the s p 500. Basically a double and you look across and s