tv Fast Money CNBC May 3, 2022 5:00pm-6:00pm EDT
70% is repair and remodel. >> and your last pick, target which is interesting what has taken place with consumer discretionary and the everything that ride as head with the fed i'll have to leave it there. thank you so much. that does it for us. the fed and gunlach tomorrow in the o. t fast is on now. >> the fed is on the clock just 21 hours until chair powell is expected to hike rates and set the stage for a bigger hike at next meeting. the ripple effects for two big money industries, auto and real estate a maker shake up at biogen and it is all because of the struggles alzheimer's drug and bonanza from starbucks to airbnb and more. we'll go inside of the number. welcome to "fast money," i'm melissa lee in the heart of
times square, in the house, tim, karen, steve and guy aamy. we start off with the count dourp. it will hit 21 hours from now, the central bank expected to hike interest rates by 50 basis points, the biggest increase in 22 years broad markets are bracing for the news trading eking out a second day of games but some sectors showing strength banks a stand out, on the promise of higher rates an also energy and transports up nicely. so where else will be seeing potential gains after tomorrow's decision and i wonder, guy, if he play the game tomorrow, if you took a look back -- >> wait a second hold on. start slower >> how do you thinkthe market will respond to something that is so widely expected? >> unless -- it is hard to believe they could be more hawkish than they've been. so by definition it means anything but that is somewhat dovish and a relief rally. i thought we could get down to
4,000 in the s&p and we got to 4050 and bounced i think we'll continue to see the mark bounce. i think we'll stop short of 4,300 and have another sell-off. and i think tim would agree, energy continues to grind higher look at the oih which held 250 again. 275 now. and look at refiners valero makes a new all-time high every day. so regardless of fed outcome decision rhetoric, i think energy is still the place to be. >> i think the fed could absolutely be more hawkish in the past 24 hours we have had two former fed vice chairs coming out and saying that a recession is likely. >> and no big deal. >> and we'll take one journalist out there to ask powell is 75 basis points on the deck and if they say yes, that is a po possibility, that is hawkish. >> the market is following through on expectations of fed intentions they're relying on the market doing what it is doing and
relying on market doing a lot of work for them. and have we priced in peak fed, peak inflation, certainly there have been inflation and hot inflation numbers since their last meeting that would give you the sense that the ammunition of all that we're expecting and heard is what we'll get. but again i look at spot commodity prices and copper i think is starting to price in peak inflation i realize we have sticky labor markets. but this is a case where markets really have done a lot of the feds work for them. >> agree with you. i i think they could be more hawkish than 50 basis points it is ponl they do 75. i dough that is not the most likely but that could happen but i think it is the rhetoric we saw mix data last week on inflation and are we maybe at peak inflation there was some for both sides. now i think that if we are even at peak inflation, we're still, way too high right. so that still gives the fed the reason to have to keep hiking and i think we don't know the balance sheet, how quickly
they'll shrink that. we want to hear about that we don't know how many hikes there will be. i think they'll stay data dependent but i think the hawkish tone will continue so. >> i do think they'll be more hawkish but not with rates. >> okay. >> the dialogue has to do -- i agree with guy, you'll see a relief rally continue but then the balance sheet -- >> but what is the relief. >> just got it out of the way. everyone is talking about it is it 50 or 75 so to karen's point, if it is 75, the market takes a stutter step backwards. >> or maybe not. people think they're done for a while and maybe 25. >> and if it is 50 i think is rallies further but then people move on and start talking about what is going to be the pace of the balance sheet reduction. no one has been talking about this this week >> i think we need to get a sense on where they believe neutral rates are. that to me is the moving target.
where is the idea of neutral is it 2.5. but that is what we need to listen to tomorrow i think 75 would be a shock. i think it would. >> and they have to go way past neutral. so that is an important point. we don't know where neutral is and how far past it. because they have to cause a recession. so when people start talking about a soft landing, that is not what the fed is looking for right now. a soft landing does not stop or slow down the economy right now. a recession slows it down. now that might not be a popular thing to talk about. but that is what they have to head for >> to think that they only have to raise rates two or three percent to get the economy back down from being so hot, that is just seeming like an unrealistic thing. ken rogoff said 4% to 5% is what they need to slow thins down.
>> i think we're 3 and a half, four years behind the curve and so that math works so you think about the ex-fed governors and they can't be more hawkish. richard fisher today, i'm paraphrases but said we're not looking at market. it is an after thought so they're setting everybody up. more hawkish than that or more potentially market destructive than that tomorrow, that would surprise me. >> could i ask you a question. because you are someone who i like to ask and we don't pay attention on the way up to upside volatility, it is no different than the move we're having down. how about a case where a fed that was very focused on asset prices, the wealth effect that comes from the stock market and the housing market, would they be just as interesting in seeing the stock market get destroyed and we've heard -- we've kind of heard that too so don't you think because they recognize the wealth effect and targeted the stock market in the past that they should be just as
tarngted on the downside. >> brian kelly points that out all of the time. this is a different administration when the market was a report card for the administration and when jerome powell, in my opinion, in october of 2018, when he said we're on auto pilot, and we're going to reduce the balance sheet was on right track and got browbeat because it went down 19% from halloween until christmas eve and so they flipped course so this is a different administration that is concerned about inflation, rightly so. >> absolutely. but if you take about the negative feedback loop that could happen if the fed is aggressive, it hits stock prices and corporations start reassessing their budgets, they start doing layoffs and then that hits the consumer and everybody is saying the consumer is so strong. that is what is it going to give us a soft landing. but in actuality, maybe we're waiting for the next shoe to drop in terms of the ripple effect. >> that could be but just to layer on that the possibility that we've pulled
forward a lot. so right now you could sell every used car and new car and -- >> at record prices. >> at some point the inventory is where we've reached e equilibrium and maybe the fed gets lucky in that that helps them in their endeavor. >> and there is no more checks going out or pandemic check as riving in your mailbox that is archaic now. in your bank account so you're not going to have the ability for the consumer to be as strong but they have so much built up over the last couple of whatever that they do have some. >> so let's play this game and i want a specific scenario because everybody thinks that the fed could be more hawkish in the comments that it gives after the actual decision is made. and so let's say they do 50 as widely expected, and then they will more hawkish in their comments and balance sheet runoff comments. what does the market do in response what do you think?
>> sells off precipitously i don't think that is a -- of course anything is -- i don't think that is an outcome but if that were the outcome, more hawkish and continue to sort of soft down the market, the market will finally listen. >> what is interesting here and i'll ask a question again to the group now, the divergence between wall street and main street is about as wide as we've ever seen and this time in favor of main street in other words wall street has been devastated. main street is extremely healthy. is that a good thing for marks right now. i pose it to the group who is up? >> is this a rhetorical. >> i think -- i don't think there as good of a position as you think they are and i do think that when you start hurting the markets and you hurt potential political donors and we're moving up to the midterm elections. people speak with their pocket books or their wallets when it comes to the politics of the trade.
>> and tim's question, it would be great to have someone like a tony dwyer answer questions. if only he were here whoa >> it is good to be back >> it is the first time since 2020 you've been if the house. it is great to have you, tony dw dwyer of cana cord do you think the fed will be more hawkish in the tone in the press conference >> it is interesting, as i listen to you and what the market is saying if you look at yesterday, the bond market rates have gone up significantly. but the inflation break evens have been coming down and they peaked in march. so that would tell me that the markets actually thinking the more hawkish the fed is, the more likely it is going to be that they'll be able to control inflation. but on the neutral grade, i think it is important when we look at history, we're such a levered economy. we added almost $10 trillion of debt to the economy. every cycle the fed wants to -- remember jerome powell in 2018
where we're nowhere near neutral and the next move was a cut. and it is the impact that works with a delay the impact of higher rates on an extremely levered economy, just look at according to ivy zelman and associates, she's awesome, not more than 90% of moertgages are currently below the current mortgage rate. which means if you're going to try to get equity out of your house, you're going to have to pay probably 200 basis pointsar little less or more to do that and you're not going to do that. so if the fed is not printing money and if fiscal is not giving it to you and china is in a rapid slowdown and europe is embarking on a recession because of the war, this is about do you have money availability which we've talked about every time i'm on the show. that is dwindling fast i would argue the neutral rate is below where everybody thinks it is because it is every cycle. that is why we go into a recession. it shuts down before they would
realize it. >> are you saying that we are going to go into a recession at some point >> our playbook for this years i'm in guy's field, we're going to get an over side bounce and it is an oversold bounce and what has done the worst could bounce but then it is -- how we go into the end of the year is going to depend on what the fed does. the only bull case that i think you could come up with at this point is if the fed, in the third quarter, sees the economy coming down, like i'll bet the ism is below 50 and you'll start to see the unemployment rate tick up because there is a great indicator on export orders that leads unemployment. so all of -- and that is been getting slower so the point is if you get slow economic data in a levered economy at the end of the third quarter, maybe they bring the market expectations down as they go up. right now the fed is in a box. they have been since the end of
year there are two main lagging indicators, unemployment, and inflation. everything else is starting to roll over and peak like the ism. they're in a box they have to do it but they could later in the year talk rates down. >> so when you're talking about the levered economy, you're talking about the consumer, businesses, what leverage are you talking about? or the government or -- >> just overall debt if you look at over debt, it is about $83 trillion i looked it up on bloomberg before i came on as a percentage of gdp it was not as high as it was in the great financial crisis but it is levered in the amount of debt. so if you want to try -- remember what is very interesting about debt is what does it do it creates higher asset prices because you spend it you go out and buy stuff when you have a zero interest rate, you buy stuff. i did. could i afford that stuff. >> nice tie by the way. >> thank you could you afford that asset in a 50% increase in price and 200
basis points more? this isn't a game. it is about what kind of monthly payment do you have and affordability of everything with inflation has come down. so it is been kind of weird. i haven't been like the biggest bull on wall street for a year and change you call for a trade here and you really have to have that money availability and improving and the only thing that changes that narrative now mel is if the fed talks down the market rates. >> tony, always good to see you. great to see you in person tony dwyer. >> you agree with tony, steve. >> i do. and that is most pessimistic i've heard tony sound in quite sometime and as his point was, he's usually the biggest bull on the street and i'm don't see it coming from him now, he's cautious so that means we'll rip to higher levels i still think we'll see 3800 in the s&p because everybody is focused in on 4,000 that will t will shoot to the down side.
>> lyft shares are plunging. down over 20% after the company delivered disappointing guidance diedra bosa has the story. >> it is all about that disappointing guidance and two words here driver incentive this is one of the most painful earnings calls that i've ever listened to. analyst after analyst keeps asking the company to quantify how much they're going to have to spend on those driver incentives in the quarter and the year ahead they keep avoiding and shares are down by more than a quarter. its market cap getting demolished in the after hours. to that guidance, the street was expecting adjusted ebidta profit of nearly $84 million. the company says that it is going to make between 10 and $20 million in the current quarter. so that is a big step down and like i said, it driver incentives that are weighing and remember, this is the recovery year for ride sharing but revenue coming in lighter than the street expected 1 billion on the high end,
$950 million on the lower end. so all in all, melissa, this is a company that ipo-ed in $76 and now trading $22.65 really in a world of pain and all that has to do with the guidance back to you, mel. >> thank you we should mention uber shares are down almost 12% on the back of this news as well driver insentives, that is never a good thing, tim. >> this is the story around both uber and lyft for the last two years an it is a case where there was significant supply shortages of drivers and there was a real crimp on that as we're coming through covid and this is supposed to be the sweet time and really if you listen to what they told us one quarter ago, they were starting to see some alleviation of the price pressures because they were starting to see more drivers coming back. so the costs on the unemployment side are significant for these guys they're very important reads on the reopening and that part of the business though is a a live and well. >> these are levels that we saw
at around halloween 2020, and prior to that march 2020 everything cratered. but it is a disaster and you sort of look at this, this time last year and you see a talk that was a $60 handle and path to profitable and now it is on a dime. it trades on 10 million shares a day, tomorrow it will trade north after 65 if it holds 22 that might be a bottom. >> this shows that you demand could be back and consumers want to get out there but your costs are going up in every way particularly in wages, karen >> yeah. i mean, you try to think through where else will we see uber, you will see it here but this is one, tomorrow we talk about the three-day rule more often than we used to it seems. this is one, that is a tough three days coming up. >> when guy talks about the level of support right now going back to september of 2020, if you go back to the pandemic low, you're looking at $16 for this
stock. >> wow >> we're right there all of these charts are always approaching that pandemic low or where is it started pre-pandemic in february. this is a pretty aggressive level to be thinking about it is back to the pandemic low for lyft. >> they do have cash though. >> right which means that they shouldn't be at that low >> they have -- you're right they have plenty of time to fix this >> coming up, more earnings coming your way. shares of amd and starbucks on the move we'll bring you the details next plus elon musk planning to take twitter private but it might not stay that way ryve long. what he is thinking and why. we're back with "fast money" after this
welcome back to "fast money. we've got an earnings alert on starbucks. shares are higher by 5%. we got new details offer the ernst call that sent shares popping. kate rodgers has the details. >> the big news out of starbucks is a $1 billion commitment for the full year 2022 on pay training and storing and including $00 million just announced worth of investment. now an addition to wage hikes to an $15 an hour wage floor and
they're adding increases for those anden toured partners for store and shift managers by august 1st average pay will be nearly $17 an hour. it is doubling the amount of training for shift supervisors and baristas and in those roles. these are key sticking points for those seeking to organize. but here is a important detail the company said according to law, these investments can't be made at unionized stores without good faith bargaining. so they won't go into effect at that 50 plus locations that have organized. howard schultz suspended the buy back and so many were wondering where the money would be allocated, eps was in line with estimates and same-store sales up 7% in line and the americas up 12% and also a beat international fell by 8% worst than expected. and in china, same store sales fell 23%
the company said full year 2022 targets will be discussed further on this call so we'll bring you any other news as we get it back over to you. >> kate, thanks. should this stock be at 5% after hours. >> they knew they had guided to where sales were going to do one thing and this number on a billion, who would have thought that a sleeping town of elmwood buffalo would lead to this whole concern about unions at time of the vote, no one thought this would have an impact howard schultz trying to push back and even try to prevent by offering enough sweeteners here. if you look at the same-store sales up and u.s. fantastic and international, and so a lot of bad news priced if and this is a company that labor costs wornts wouldn't get better but they're in this price. >> but the costs will be ongoing every year after this.
they're still spending on extra training and all of that. >> just come back to starbucks is a great company had a premium multiple for a long time. it no longer does, it is a little bit of a premium. 22 maybe-ish i'm not that excited about to want to pay a premium multiple in this market. >> you don't think that the growth is is there >> i think the china growth is questionablefor a long time that has been a driver here. because we thought that north america was sort of tapped out we've seen some positive from the digital evolution there. but the china thing sort of really weighs on the story, i think. >> how long could we have zero covid policy. >> even before it was zero covid. >> china could have zero covid policy. >> and you don't know what the next lever they're going to pull will be in china and they have been the tail wind for a growth arm of starbucks but schultz coming back should have been the bullish story and the stock wasn't able to hold
that pop when he came back so that to me is a negative forward and i think it is a sign of things to come. >> they came back bearish, though out of the gate he was like, no more buybacks and we have to spend more money on our stores. >> guidance on the conference call let's get to amd sales up 71% despite concerns of a slowdown in pc demand. let's get to kristina partsinevelos for the details. >> what slow down in computer sales and what inflation they just blew it out of the park with revenue hitting $5 billion for the first time ever the company keeps growing with every one of the individual lines of business growing by double-digits during the quarter. the company did increase its full year guidance which is why the share price is climbing over 7% in the after hours. many were worried about the pc slow down but amd isn't feeling the heat just yet. the ceo just said on the call going on right now, the focus
will be on gaming when it comes to pc sales. another bright spot, the high end chip server business showed a beat over intel. the amd stom got hit falling 37% this year alone, worst than the stocks etf and the s&p 500 investors have been off loading chip stocks in the face of inflationary risk and cyclical fears. but keep in mind, amd closed the acquisition in february so it is the first quarter to reflect the xie links, revenues would only increase 55% year-over-year so still over $5 million. lisa su will be on cnbc tomorrow at 9:00 a.m. eastern time. and i just have one other quick mover. this is a semiconductor stock, sky works, they're guidance was low due to supply chain concerns so shares right now falling over 3% back over to you >> thank you talk about a sigh of relief.
we're talking about that regarding starbucks and amd, this is a big one. >> they beat on eps by 10% on revenue. operating margins came in at 31.2% up 22% from last year and the street was looking for 26% that is a remarkable number. you could make a case for valuation at these levels, i don't think it should have gotten to 165 but it got there in november. i don't think it should have to 5i89 either. i think the right price is 125 which is about a 50% retracement of the move that i just outl outlined. >> for a company that made an acquisition that has seen the multiple triple. what is the multiple you put on the stock. at 35 times, it's an $180 stock. you're around 22 and 23. but it is well in the price. the question is, is -- is it an improved intel is that something that is
weighing on the competitor force in gpu and to what extent that has weighed on amd pc sales around 40%. diversification better and their enterprise is excellent. >> so it won't -- we're altogether so you know what will happen right now. right? >> what happens? what is going to happen? >> so a name that ghuy likes to talk about, texan. i think that a drought in chips will go to result in a flood of chips. so i think ultimately lower prices it is a glut declining trends lines since november of 2021 qualcomm, in phones, the biggest revenue stream, trying to get into the international of things qualcomm, has outperformed on a relative basis i put money there, not nvidia. >> so you're doing a would you rather. >> i'm doing a self would you rather since tim asked about five questions in the eight block. >> what is going on here. >> i'm taking over
one symbol which one do you like in the chip space >> lays. >> tim, where are you? >> ruffles all day long. >> ridged? >> usually >> we're just getting started here on "fast money. here is what is coming up next >> powell's predicament. the fed under pressure to keep prices under control but with home prices showing no signs of letting up and supply chains still tangled, is he fighting a losing battle plus c suite shake-up. one biotech ceo stepping down as drug challenges continue and the impact on the stock and the space. you're watching "fast money" live from the nasdaqart te mkesi in times square. we're back right after this. and some you grow to rely on. these are the bonds worth investing in. for over 50 years,
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welcome back to "fast money. the fed is set to raise rates as it t tries to break the back of inflation but there is real structural issues that could complicate things. mortgage rates are at the highest level and auto prices are pushed to all-time highs appliances up double-digits so is the fed just an impossible position let's bring in former national economic council chief economist joe borno. a lot of people say that marks are doing a lot of work of the fed. but housing prices will stay elevated because of low inventory and pent up demand for housing, et cetera so does this mean the fed could be forced to put on the brakes harder than we think >> that is what investors right now are saying if the market has 300 basis points of tightening, prices in
from march of 22 to 23, that makes it like the '94 cycle and upwards of $900 billion of balance sheet unwind that is worth another 50, 75 basis points this is a lot of hiking and the economy is rapidly slowing whereas 94, we grew over 4% that year i'm worried about recession. so my sense is the fed will hike tomorrow 50 and they probably go 50 in june and that might be it. mainly because the economy is weak not so much because inflation will come down it will come down but i think the growth story will eventually win out. >> joe, it is tim, welcome to the show talk to us about labor inflation and the stickiness of that and maybe goods and commodities have seen their peak. but labor feels like a tail wind >> labor market appears very tight by the unemployment rate own 3.6. but the labor force
participation rate is still below the previous peak, employment population same thing there. if the trend in trump jobs continued, we're about 6.2, to 6.3 below where we should be it is more broken than tight having said that you're getting good nominal wage growth but after wage adjustment it is negative the food surge which will continue because we're not getting fertilizer and you're seeing corn and wheat prices surge that will persist from the spring and into the summer and same thing with gasoline the two sectors account for 22% of household purchasing. and therefore the prices will suck liquidity out of the system and depress spending and even though the job market may look good for now, in real terms we really got some significant dampening. i don't see that changing any time soon. >> so before we were talking about slowing growth and which i agree with you and mentioned peak inflation
but what if it is persistent and pesky then you're talking about a stagflationary environment and hearing more now what happens under that scenario >> yeah, i mean, guy, the thing is i'm watching that in credit markets. we've seen the single b and triple c, we're seeing spreads start to widen they are not as wide as they were earlier in the year but they are starting to widen if we get that stagflationary environment with rates moving up, it would hurt equities and that we could be down 25% to 30% in equities and history is clear that when markets decline, that actually is deflationary so i don't -- i hope we don't have a stagflationary situation but if we do it is bad for financial assets. >> joe good to see you thank you. karen, i know you watch hyg. they hit levels not seen for more than two years this week.
>> there is two parts. there is the rate part and the credit part. so credit is something really to watch. we haven't really seen any kind of credit disruption really. but that is the thing that really shakes the market where the vix could go just berserk. i'm short the lqd and hyg as a good market hedge. >> i think the fed is -- guy said it before, they were so far behind now and now they're putting the foot on the pedal so aggressively that you can't help but hurt the economy and that is what they're trying to do. so we've heard from tony, we've heard from joe and when you start to look at this, people are starting to get really cautious, really fearful about this and joe is throwing out numbers being down, 20%, 25% that is nothing to sneeze at there. so, i would say that the fed is so far behind right now, they're going to have a mistake here and they're not going to be able to get footing back on target
again. which means recession, slowing economy and everyone looking down the wrong side of the tracks and the train hits you in the back of the head. >> he's the most bearish on the desk steve grasso. >> that sounded bearish. i look at the housing market and the price appreciation over last two years and i see a bubble that may not have the same underpinnings from the financial crisis, but there is no question that there is speculation in the housing market there is no question that there is speculation in commercial real estate. an this is kind of stuff that i don't think we've seen the impact you can't have that kind of a move in -- in rates with levered entities without there being some problems. we've said it on this desk now for three months we're waiting for the bodies to float to the surface because you can't avoid this there will be whales coming up. >> and let's say for the housing market, at what mortgage rate will you slow down that market when there is already pent up demand and lowe inventory.
there are other issues than just the broader economy that are specific to this industry. so is 6% the magic number where you slow the market down. >> mortgage apps and refi have come down. you look at pending home sales, they were terrible numbers. >> enough, though? that is what you have to wonder. is this enough >> the other side of the equation whiches affordability it is the wrong end. i think we're there right before your very eyes but it takes time to filter through the system. >> coming up, a big shuffle for biotech. what the change in the c suite means for bio again. and net gas surging to the highest level since 2008 and that had the option tshi gushing. details when "fast money" returns. . event planning with our best plan ever. (manny) yeah, that's what i do. (vo) with 5g ultra wideband in many more cities, you get up to 10 times the speed at no extra cost. verizon is going ultra, so your business can get more.
welcome back to "fast money. let's take another look at shares of lyft plunging more than 25% after issuing dispointing guidance and announcing driver incentives uber tomorrow also down in sympathy down about 10% andsticking with earnings, we have a news alert off the starbucks call let's get straight to kate >> hey, again, starbucks will
suspend guidance for q3 and q4 on call. howard schultz saying given the materiality and orn going uncertainty around china and the significant investments we're planning the only responsible course of action is to suspend guidance for q3 and q4 as with we move through q3 and approach investor day we'll have much greater visibility on q4 and holiday and fiscal 2023 and be in a position to share details around our post covid china plan with you. so suspending guidance for the back half of the year. much higher on the news they're making significant investments in both partners an stores. >> thank you very much. and the stock in response to that is up 5%. tim, what do you make of that? >> we've known about china again, china was down 23%. >> suspending guidance. >> you won't hear anything bad. >> we were talking about how long could you have zero covid yes, they're china, they could be zero covid forever. but i believe in a world where
we're making progress here and i just think why try to throw darts here i think the more important parts of the numbers are the labor costs, but how about loyalty that was up 17%. there is now 26 million people on an app and i think that is part of the tstarbucks multiple >> when i heard suspended guidance, i thought the stock must be done and it is not >> think companies should never give guidance so i get why he wants to do it good for him take the hit and it wasn't even a hit. so that is good. i just feel like it makes companies short sighted and worry about things that are happening in three months, he's got a much longer vision than that so i think it is good. i think every company should do it. >> meantime, a big shake-up in biotech. biogen ceo is stepping down after the new alzheimer's drug let's get to meg tirrell with all of the details. >> well michelle, the ceo of
biogen since january of 2017 is going to stay on as they conduct a search for his successor they were beginning the search today so he'll continue to be a ceo and member of the board as they do that and help with the transition but essentially this is being looked at as a re-set period for biogen after, as you said, it is really struggled with a roller coaster for the alzheimer's drug that got surprise approval in the middle of last year after the advisers with were against the drugs saying there weren't clear data showing that it worked and medicare gave a very narrow coverage opinion saying they would only pay for the drug for people in specific clinical trials that essentially doomed the drug to failure and the company saying today it is writing off $275 million in inventory basically eliminating the commercial infrastructure for the drug what is interesting, rest of the business is shrinking and biogen
is betting in alzheimer's. it has another drug with another read out at the end of the year. so a lot of questions of what is the profile of the ceo going to look like and will they change the company and do m&a and package it up to try to sell the company, all of these outstanding questions and then of course what is the drug do at the end of the year in this clinical trial mel. >> is ad helm a zombie drug, but their eliminating the sales infrastructure that it had planned originally when it looks like it would be a blockbuster so there is a lot less support for this drug. are they writing it off at this point. >> essentially the drug is still available but you could only get it if you enroll in a clinical trial so they said we built up this big infrastructure to sell alzheimer's drugs but we can't sell it and we have this other one that potentially could come along a year from now. but it doesn't make sense to keep this big infrastructure as we wait for that one they are not keeping it in any
means for adu helm itself. >> meg, thank you. $30 million market cap company guy, what happens? >> i think it is slightly, you think about a $450 stock when the good news came out. >> that didn't last long not that biogen is a one-trick pony by new stretch but so much of this was predicated on getting this alzheimer's across the finish line. clearly not happening. i don't know if you've capitulated yet. there might still be another 15%, 20% down side before it finds the bottom. >> you have to protect the 192 low where you look at the stock. i think all bets are off first of all, when you look at biotech, it is been totally obliterated and there is a handful of names that have done well but unless you were covid related for last couple of years, you didn't get any of that bid and we've seen all of that bid in the covid related stocks just leave. moderna is down 42%
year-to-date so this is a group that i think will eventually rally. i think we're close to the bottom but to guy's point, it could be 10 or so dollars away. >> let's move on here. check out nat gas surging to the high elf levels since 2008 as the ukraine conflict continues to disrupt energy. one option trade ser making a bet that the gains are far from over mike khouw is in the house bringing the action. >> back at last. yes. and ar, antero resources, in denver, colorado, we don't talk about it but it was trading at a lot of options more than 7 times the average daily call volume. we saw the purchase of 3300 of the november 40, 55 callspread paid $3.90 because e and p companies are volatile the 40 strike calls over $7. so this is obviously somebody
who has a lot of upside in their sights looking through in november. >> and tim you see upside in general in this space? >> i do. and first of all, as i look at the s&p and energy at 4% when historic is about 8 and we were at 16 in 2008 the last time oil prices were here i think we have to spend there is numbers banded a bit citadel said yesterday we have to spend a trillion and three in the next several years i think it gets back to companies that are run so much better and so this is again -- it is not just a trade it is actually an investment whereas as it was not before. >> when you look at europe and everything going on with russia and ukraine, you start to see the underlying bid but then when you look at the flip side and you look at china's zero covid policy, for crude i think we're going lower. for nat gas i think we're going higher because europe is so dependent on nat gas, singularly, i have to take my time with that a lot of syllables.
>> just as long as i could -- >> although i could pen a haiku in the commercial break using singularly. >> mike, welcome back to the house. for more "options action," tune in friday at 5:30. coming up, we're digging into the earnings headlines and what elon musk plans to do with twitter after he takes it private. more "fast money" in two trading isn't just a hobby. it's your future. so you don't lose sight of the big picture, even when you're focused on what's happening right now. and thinkorswim® is right there with you. to help you become a smarter investor. with an innovative trading platform full of customizable tools. dedicated trade desk pros and a passionate trader community sharing strategies right on the platform. because we take trading as seriously as you do. thinkorswim® by td ameritrade
all on the most reliable 5g network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™ we've got an earnings alert on airbnb. shares are jumping 4% after reporting a beat on the top and bottom lines let's get to d bo. >> brian chesky the ceo laid it out at start despite the pandemic, the war in ukraine, macro economic headwinds, q1 was another incredible quarter the metrics back that up nights and experiences topped 100 million for the first time that exceeded pre-pandemic levels free cash flow was more than a billion dollars and the company did report a net loss in the quarter but they do expect to be profitable on a net income basis this year.
now chesky talked about the way that people are increasingly using search on airbnb and helping them better match demand one of the analysts was around a higher marketing and advertising spend in the past quarter and that is really something that the company has prided itself on scaling back over the last few years. he talked about this different approach than their peers, one that he said it direct or unpaid that speaks to the consumer and kind of shifts away from traditional ad campaigns he said that has made airbnb a house hold name and this company continues with a higher valuation. >> thank you guy, this is the a in which trade. >>s the dawn trade and also dan nathan as arp trade. >> it was named after you. >> that hurts. >> i'm stating fact. i'm not doing this out of -- >> because i'm -- listen, it
does hurt. but that is better than the alternative as it turns out. i like it. listen, people were knocking on valuation. but to the point, they're the only game in town and they've managed to diversify themselves and they were close to profitability. 3 cents loss and the street was liking 25 cents. >> they are seeing the same growth in the first quarter as the second quarter. >> i think that is a very defensive stock. if you look at the mega cap tech world that it exists in, whenever it is is a times sales or ten times, the stock is down 20% from the all-time high >> we have an alert on elon musk's twitter deal. the "wall street journal" is reporting that musk is telling potential backersco take twitter public again within a few years. the tesla ceo is looking for investors to take on some of the $21 billion he planned to put in for the deal surprising, karen or not >> no, i mean he wans to get
other equity in there so he doesn't have margin up any more of his tesla stock to let them know, hey, evenly there will be an out and liquidity event. he wants current investors to roll in. i think there could be some big humid -- holders including dorsey >> and this is usually the mo. you take something private and do some efficiency underneath the radar where no one has any clue of what you're doing. and then you spin it back public and hopefully for a premium for everybody. no shocking but i think the spread as karen has said for a while now, between the price and where it is trading now said that there is a lot that could be some bumpy road ahead before the deal closed. >> you think it gets done? >> i do. i think do it will i don't know how but it does get done but the stock that you continue to watch, you saw the sell-off in tesla, it bounced but still off of a ridiculous strong
quarter and the stock hasn't gotten back to those levels, i think tesla is the name to watch on the downside. >> up next, final adtres wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq you'll always remember buying your first car. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price, our strategic investing approach can help you build the future you imagine.
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earnings movers. lyft is the stand out. it is getting des pated, down 27%. starbucks was up despite suspending guidance for the q3 and fourth quarter amd is up 7% and airbnb asserting five and caesars higher by almost 3%. time for the final trade now around the horn. >> and a lot of that is priced in, where there is not a lot of good stuff priced in, i think diamondback, ticker fang it was so poorly run back in the day. things are very different now. >> karen. >> i'm going to stay with the energy space also. oih. i think oil doesn't need to go up, any of those work for the oih. >> steven? >> i'm going biotech ibb. i think we're very close to a dramatic bounce in the etf >> guy in. >> the road to lord stanley cup begins a few blocks away from here in a few hours, melissa
lee. >> i can't wait. >> i know you're locked in. >> 7:00. >> new mont mining has sold off to take another look >> don't 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 is 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 other people make friends i'm just trying to make you some money. my job is not just to entertain but to educate and teach you so call me at 800-743-cnbc or twitter me at jim cramer let's talk about what we've lost the groups that are no longer working. the ones that need to turn around if we're