bit of a breather here, ending the day down 1%, but we're up 9% on the past week, so, we continue to watch this rotation, see how all that shakes out. >> tom lee thinks it could go up 30%, 40% this year. i mean -- and he's not alone. >> yeah. well, that's going to do it for us here at "overtime." >> yeah. "fast money" starts now. live from the nasdaq market site in the heart of new york city's times square, this is "fast money." here's what's on tap tonight. a chip wreck. asml and taiwan semi leading the sector to its worst day in more than four years. is this a sign of continued rotation, or reason for more concerns for the group? we'll debate that. and rocketing roche. shares touching highs not seen in over a year, thanks to positive results for its weight loss pill. the impact it's having on the other big players in the space. plus, copper miners lose their shine. united airlines on the move. and we're counting down to netflix earnings. i'm melissa lee, coming to you live from studio b at the nasdaq. on the desk tonight --

tim seymour, karen finerman, dan nathan, and guy adami. and we start off with the chip stocks getting hammered. the vaneck semiconductor etf plunging 7% today. asml, applied materials, and advanced microdevices down double digits. taiwan semi among the laggards, as well. down 8%. the latest moves coming from both president biden and former president trump indicate that trade tensions with china will, in fact, ramp up going into the elections here. so, this coming from all sides, in terms of political parties, and that is having the impact on the chip sector. trump specifically questioning whether the u.s. would actually defend taiwan in the event of a chinese attack. so, really throwing some concern on this trade. the chip selloff driving the nasdaq to its worst one-day loss since december 2022. the tech heavy index dropping almost 3%. so, does today's action mark the end of the red-hot semi trade, no matter what the outcome of

this election, guy? >> the end. well, last night, cq was here -- you were on a shoot -- >> on assignment. on assignment. >> as you are want to be. it broke during the show. a couple things struck me. the comments about jerome powell and the fed cutting rates this year, but the taiwan comments really to me were market moving and i was surprised the market doesn't move in the aftermath when weer with on the show. with that said, as much as people want to say a trump presidency is bullish for the market, it's bearish for technology and i think you're starting to see it on the edges today. i think the seeds were sewn, again on june 20th, when we saw that reversal, not unlike what we saw in march, and i think it's going to continue. there's a chance that a name like nvidia can trade down between $102 and $105, this is not ridiculous, given the move we saw back in mid-april or so. >> chips at this point are stuck between a rock and hard place in terms of biden saying, our allies should tighten export

controls, what kinds of technology are exported, and trump says about taiwan, they took our chip business. either way, it's not good in terms of the rhetoric. >> yeah, so, you can focus on the fundamentals, you can focus on the visibility that these companies have, if we have tighter trade policy, right? and so, again, nobody knows what's going to happen there, but i'll just say this, if you look at some of the companies that have massively outperformed, i mean, think about an asml. they gave an outlook that wasn't as good as some very optimistic people thought. that coupled with the geopolitical outlook, it makes for a difficult situation. then you think about taiwan semi conductor. so, asml makes the machines that go into a fab that taiwan semi conductor has, and they have 85% of the high end gpus. then you can draw a line to nvidia. and you can start thinking about what all these companies and hyperscaler that are basically building servers to go into data centers that are going to service all these companies.

and to me, i think we're probably ready to have a little bit of slowdown as far as the demand is there, we've had tens of billions of dollars of spend over the last, call it year and a half or so. until these companies start see what the roi might look like, you might see a little bit of a slowdown. i think there's fundamental reasons, i think people were looking for an execute to sell. and then obviously the visibility issue. >> does the whole notion that everybody's going to spend on a.i., that a.i. is the next coming of the internet, does that change based on these headlines, though? >> i don't think so. >> so, why should there be this -- as long as the hyperscalers are going to spend, because they have to, nvidia should still have its business. so, what's the issue? >> the issue would be, i think, if the correlation exactly matched where we were and where we -- i think where we still are, but i think it's quite possible that it was ahead of where we are. i think the train has left the station. the a.i. spend will come, it just -- i don't know exactly when all of it will come.

so, whenever things sort of get overheated like, you know, this sector does, and i'm long, i am, you know, today was just not a great day at all. but you know that this could come, right? this source of reversal, when you have something that goes up like this. so i think, you know, we can point to things, i think the comments about taiwan -- it wouldn't be shocking, three days later, to see a different comment about taiwan, right? that could absolutely happen. but i think, you know, the tinder was kind of there, just ready for the match, and so -- you know, we saw asml, as you said. it was 1,000 euros three days ago. >> yeah. >> or last week. so -- i think this story is still in tact. we are going to start to get earnings, and we'll see. we'll see what microsoft cloud looks like, we'll see what -- by the end of july, we'll see amazon, google, we won't see nvidia, as we talked the other night, until end of august, but i think if we can get back to, what are they actually earning?

and away from, what's all the macro, then we'll have a little more clarity. >> i don't think it's about the semi trade being dead, it's about the world that we've had in the last week. so, it goes all the way back to that cpi, which was a week ago. since that point,we've seen extraordinary outperformance by small caps, equal weighed, s&p value. i mean, pick your places that are the real economy. the dow jones was up for the sixth straight day and another straight record on a day -- i mean, it outperformed the s&p substantially. equal weighed outperformed by 2% today. so, those are the things that i would be more focused on. i would be focused on macro and positioning. and obviously, we've had a whole lot of macro. and we've had a whole lot of positioning building up to this point. i don't think the fundamentals really change. i think the fundamentals were always to be challenges in terms of, what do i want to pay for these companies? the fact that the vix is now starting to make a move, we probably thought we were going to walk in on monday and see a vix significantly higher than we did. i think the dynamics dan brings up around asml -- i thought the orders were strong. but this is a name that also

very, very crowded. remember, this is like europe's chip play. if you are investing in europe -- i've got an international etf. we've loved asml, because it's a way to get that kind of exposure. i think this is a case where, hey, look, there's no question, biden or trump is going to say, don't circumvent or restrictions on china and china technology. this goes all the way back to huawei. this is stuff that the market is paying attention to. i felt like today was a healthy day in the markets. it was a day where we've kind of put an exclamation point on a broadening of the market, and there was stuff -- banks enjoyed today. i mean, we're getting good earnings out of certain parts of the sector. >> asml, i didn't realize, is europe's largest tech company. it's that big. but going back to the cpi print, it coincided with the timing of when trump's odds in the betting markets went up. and so -- and i ask this question not because i want to say it's because of president trump that we're having, you know, this rally, but to understand what the foundation of this rally is, because if the

trump trade, so to speak, is driven by political wins, then what we're seeing in terms of the advances we've seen over the past week, could just as easily go the other way. so, what is it? is it because we know the fed is going to cut interest rates by 25 basis points in september? or is it the trump trade? >> yeah, i think, you know the answer to those questions are typically -- you know, some -- >> mixture. >> a mixture of the two. but to answer it, i think specifically, the fed is, to me, still the most important thing. but i think the catalyst for it is now on the back of the odds of a another trump presidency, i think that's sort of taken over for the fed, which it all makes sense. but i'll say this, as well, you know, there are a lot of things happening, you would think that a president, new president trump will be bullish for new york. i talked to liz anne saunders earlier today, actually the biden administration that was best for the energy sector. but in terms of banks, and i think all three of us would

agree, mel, you would, as well, the potential for deregulation and less restrictive policy under a different administration would be extraordinarily healthy, and i think to a large extent, that's what the banks are rallying on. >> yeah, so, going back to the fundamentals in the chip trade, i saw something strange today, guy, and it was an article -- >> that, by the way, stop for a second. you see what he just did there? he tried -- he rushed it a little bit, but he was doing a little godfather 2. michael corleone, sitting out on the terrace, in cuba, and he said, i yosaw something strange today -- >> i thought he was just saying -- >> you don't think he can deliver that -- >> you're right to sense that, but please continue. >> you just did an ocean's 11, you rushed it. really quickly, okay, there was an article in "the information," maybe it wasn't that strange, they had an interview with chevron, last -- >> c in clam. >> the cio, the chief investment officer, they created an enterprise a.i. group, okay?

creating some large language models that will make their employees, make certain processes within their business more productive, make some of the employees more productive. and what he said in the interview was that the jury's still out here. they've gone through some of the applications, they've done a spend, they're training some other stuff on microsoft's co-pilot, but he's not convinced yet. that sort of commentary will take air out of this trade. i think we're going to be anniversarying on two years, this fall, of the release of chatgpt, okay? and i just think if we can't find the use cases in the enterprise, i think you're going to see some of the spend slow down. >> i think there's a lot of people who say they are finding use cases. you hear, like, jamie dimon talk about banks and all of the opportunities that they see. i think that there is that use case. i don't think that the reason is that, i think they were kind of of overdone, and i don't think -- let's wait, let's see

what meta has to say, because we did see them both do a lot of spend and also improve their business a lot. right? >> because of it. >> because of it, yeah. that was really important. i'd like to see the continuation of that, and that would allow people to say, all right, well, we're with you on the spend. >> all right. for more on today's market action and where we could be headed next, let's bring in liz anne saunders. >> nice to see you guys. >> where are we in this rotation? is this for real? >> um -- i think to some degree, it's for real. assuming the expectations around the shift in fed policy at the september meeting come to fruition. i think the extreme outperformance that we've seen by smaller cap stocks, by the russell 2,000, is not likely to persist at the same space. i see it more as, we're likely to get bouts of this type of action where you get some profit taking up the cap spectrum, and there is money looking for opportunities down the cap spectrum. but i wouldn't expect it to

persist. >> is it not wise at this point -- a 10% run or so in small caps, i mean, we have to also think that the small cap index is not made up of the most vibrant companies, some of them are fallen angels that have declined in value they've gotten into the small cap index. how should we approach thinking about small caps at this point? >> well, don't approach it monolithically, i think that's a danger. small caps is a big category. russell 2,000 has 1,800 and change stocks, and if you go to just pre the cpi report, which was the point that small caps inflected relative to large caps, just as a for instance, if you simply broke the index into two categories, or two cohorts, profitable russell 2,000 stocks and nonprofitable stocks, there was an 18 percentage point spread between those, with the profitable stocks handily outperforming that index itself, and the nonprofitable stocks not

only underperforming, but in negative territory. so, that dividing line, you could do the same things with zombies versus nonzombies with high interest coverage versus low. and i think on a looking forward basis, maybe in part, because of this rally that we've seen, i think you want to lean into the quality side of what's working, but maybe fade the lower quality side of what's working within those smaller cap indexes. >> hey, liz ann, it's tim. it sounds to me that you continue to lean into equal weighed. and again, an index, if you look at that, that's done half of what the s&p has, but the fact is, we're in the middle of bank earnings. it's been a very strong rerating period for banks. there's an argument they could continue to rerate. energy, health care. you're starting to see laggards across the energy space. j&j had good numbers out today. you think about asset allocation every day. can people follow this? >> yes, but i think even within

something like equal weight, it's not all created equal in terms of the stocks. i think this is an environment where you can't make monolithic decisions. whether it's at the style box level, whether it's at the cap level, even at the sector level. i think factor-based analysis and screening continues to be appropriate, because both -- where leadership has resided and where it hasn't at the factor level has been much more consistent relative to leadership trends at the secular level or at the index level. so, even within equal weight, i think you want to have that factor-oriented approach, and stay up in kquality. and that may seem like the ultimate duh statement, but of course, there are times where it makes sense to go down the quality spectrum. that's where leverage to an upturn in the economy is, or a major move on the part of the fed to go from tightening to easing policy. i'm just not sure we're at that point in the cycle.

so, that's why i say, i think you want to fade the lower quality, lean into the higher quality, and that's within small caps, even within the context of equal weight. >> liz ann, it's karen, thanks so much for being on today. i love the -- it's not a monolith. i sort of live by that. so, when you talk about the russell, i understand you don't want to make this sort of capital allocation to the monolith, but when you think about the quality there, are there particular industries that you favor now over others? >> i wouldn't say it's at the industry level. i'd say, again, it's at the factor level. so, even though we're looking at a fed that possibly is going to start easing policy in september, they're probably not inclined to do it aggressively. so, to sum degree, even in an easing cycle, we're in a higher for longer backdrop, and that is still, i think, suggestive of focusing on factors like high interest coverage. i mentioned the profitability spread within small caps. the nonzombie-type companies,

strong return on equity, ample free cash flow, you know, those profitability metrics. i think that is the way to approach the market in this environment, and it -- that can be applied across sectors, across industries. within leadership sectors are great stocks and there are crappy stocks. and i think in this environment of lower correlations, and wider dispersion, having gotten the return of the risk-free rate, ostensibly connecting fundamentals to stock prices again, leveling the player field to some degree between active and passive, i think this is an environment where you continue to want to be more factor-focused than sector or industry-focused. >> liz ann, great to see you. hope to see you again, too. >> thank you. >> good points. >> yeah, great points. listen, if one was worried about the crowding into these megacaps, right, and we can all agree, big secular shift that's

going on in the last year and a half or so, if that's coming a little bit unwound here, some of the air is coming out of that, and you've seen this crowding now into the small cap index, the russell 2,000 basically has the market cap of nvidia, right? so, this thing has gone up 10% in a straight line over the last week. it was unchanged a week and a half ago on the year, right? look at the kre, the small bank etf. that's up 20% in about two weeks or so. so, if those trades come unwound, if, like, for instance, they start cutting, because the economy starts slowing, don't you think regional banks are going to have a hard time? don't you think the russell 2,000, which was punished in a higher for longer environment, because their access to capital was harder? the cost of, you know, capital was higher, you know, the whole thing? it just doesn't seem like chasing it here makes a lot of sense. so, money goes back into tech, which will at some point -- i think these things could have a hard time. >> i read liz ann's stuff, and we've talked about this, be careful what you wish for in the form of rate cuts, because it may not be for the reasons you

want, and it actually may be because fed's trying to put out some fire. i've said for a long time, if they can just continue around this, slow and steady wins the race, that's probably the best case scenario. the fed rate cut might be a negative for the market. >> and i think the market also displayed some growth fears today. if you look across the resources space, if you look at also the places, we know japan's got their own issues and what they need to do with the yen, but there's no disputing there's an element of the yen trade, which is a carry trade. so, you're starting to see some unwind there. you're starting to see some pain in places like copper that i think is dr. copper, also has had a lot of speculation around it. but that was also part of today. today expressed some fear of growth, and i think, you know, that's something to watch out for. coming up, action in united airlines and discover financial. plus, the copper and a number of commodity trades lower today. is this red hot trade now done? we'll break it down.

this is "fast money" with melissa lee right here on cnbc.

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welcome back to "fast money." we've got some afterhours earnings action. we start off with united airlines. that stock turning positive in the last few minutes after posting an earnings beat and a revenue miss. contessa brewer has the very latest. >> hi there, melissa. yeah, united's guidance for the third quarter disappointing. the street expected $3.44 in earnings per share for the third quarter, and instead united guided from $2.75 to $3.25 at the high end. the company says it is confident it will hit its full-year guidance of $9 to $11 per share. the airline says august really is an inflection point, that the industry is seeing capacity growth decline by three points. it says it is going to see an acceleration of three factors that could give it an advantage. first, premium revenue grew 8.5% over last year's second quarter. the second, basic economy revenue grew, are you ready for this? 38% year over year. third, market share among -- and this is united's term for it,

domestic road warriors, increased during the quarter. i don't know if it makes business travelers feel better to be called domestic road warriors, but anyanyhow. united says it whether reduce capacity by 3%. melissa? >> contessa, thank you. tim? >> well, this is a bit of a relief on capacity, and this is what we thought about for the entire airlines. to some extent, united priced in a better guide here. those numbers were fine. if you look across, they definitely beat across the board, they reaffirmed 9 to 11 bucks a share. i think the guide was a little lower on the midpoint of eps, but this capacity, this efficiency dynamic is very important. remember, airlines have had a very big pull-back after a very big run. so, not a huge surprise. united bounced right off that 200-day. i think you have given a lot back. delta in a difficult tape has

traded reasonably well after a 20% pullback. i think you can file this good news and believe what they're telling you. >> smack in the middle of the range. $33.54 for the last 2 1/2, 3 years, number one. but tim just said, if you are giving guidance $9 to $11, you are not giving any guidance at all. you could drive a boeing plane through that -- that's a personal pet peeve. so, if that's how wide your guidance is you should say, you know what, we don't have any clarity, either. this is what we see for the next quarter. we don't have a clue on full year. with that said, i mean, i think delta, as tim has said, is still best in breed. and i think there might be some mojo in jetblue off this sort of rounding bottom. all right, discover higher after its earnings report. steve kovach has the numbers. hey, steve. >> hey, mel. shares of discover are up about 4% afterhours, after beats on the top and bottom lines. earnings per share coming in at $6.06. nearly double the $3.07 analysts were expecting. revenue was $4.5 billion versus

the $4.17 billion estimate. and the company reporting total loans ended the second quarter at $127.6 billion. that's up 8% year over year. and just this morning, carlisle agreed to acquire a more than $10 billion private student loan portfolio from discover, which the company describes as a critical initiative. the conference call doesn't kick off until tomorrow at 8:00 a.m. eastern, where investors will be listening for any commentary on the state of the american consumer. again, shares moving higher on these results, mel. >> all right, steve, thank you. steve kovach. karen, what did you make of this report? >> so, a little bit noisy. that's why you had that huge earnings number, which they were -- they were undoing the reserve release against those student loans. so, taking that out, it was really about net interest margin, and net interest income, both which were a beat. it was chargeoffs, which were slightly lower, so, those are two really good things, particularly for a company that is sort of right in the crosshairs of the consumer we're

concerned about, right? so, that was a bit of a surprise, so -- good for them. then, there is also, will they do the merger? it seems to be progressing. we'll see. interestingly, j.d. vance does seem to be in the lina khan camp, so, i don't know. i mean -- the merger makes sense to me, but who knows? >> there had been that question, because we were talking about how bank of america and citi commenting about the credit card exposure, the customer is okay there. >> both -- bank of america and jpmorgan have the same expectation, 3.4%, here, they are closer to 4.8, 4.9. different customer. >> so, we have answers now about that lower end, lower credit quality, lower household income consumer. >> maybe. >> maybe. okay. >> citi bank cfo last friday was calling into question some of the demand there and some of the stuff, they're seeing -- their retail partners.

wells fargo, obviously, last friday, had a bit of a net interest income problem. the stock was down 6%. the next three trading days, it filled in the entire gap. so, i think there's certain pockets of this trade where investors don't seem to be too worried. maybe that's complacency. again, this is -- if you are releasing reserves right now, you are a bank like that, you are probably not too worried. and we know things can change very quickly. >> capital one, by the way , up. >> yeah, i just -- i would point out that this might be a last hurra for, you know, consumer credit. if you look at the -- i'm not saying it's about to cave. i'm just saying, if you think about, this was a $130 stock before the fed got aggressive in late '21. it's now traded well through 80 bucks and up 30% since mid-june. is this an environment where you're actually rewarding this company from the macro and the credit perspective? obviously, company-specific you are, and situation-specific, you are, but if you think about dfs, they would certainly be a place

you'd be focused if you were worried about consumer credit. there's loot more "fast money" to come. here's what's coming up next. >> the copper trade is getting whiplash from red hot to ice cold. and now some of the space's top mining stocks need to dig themselves out of a hole. what today's pull back means for the future of the resource trade, after this. plus, roche soaring, as the swiss pharma giant looks to make waves in the weight loss trade. the skinny on the latest trial results, and what it means for incumbents like eli lilly and novo nordisk. next. you're watching "fast money," live from the nasdaq market site in times square. much more after this. tamr and they don't "circle back" they're already there. they wear business sneakers and pad their keyboards with something that makes their clickety- clacking... clickety-clackier. but no one loves logistics as much as they do. you need tamra, izzy and emma.

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(intercom) t minus 10... (janet) so much space! that open kitchen! (tanya) ...definitely the one!

(ethan) but how can you sell your house when we're stuck on a space station for months???!!! (brian) opendoor gives you the flexibility to sell and buy on your timeline. (janet) nice! (intercom) flightdeck, see you at the house warming. welcome back to "fast money." copper seeing a rough two months. the industrial metal down more than 15% from its may highs and the recent route being felt particularly in the copper miners today. southern copper and tec r krtec resources down sharply. gold did settle slightly lower. guy, what do you make of this copper decline? >> we talk about it all the type, copper is an economic barometer, without question. i guess it makes sense, though i

wouldn't run too far from that. gold is a completely different dynamic, and i think it's going to continue to work in terms of what's going on. this racheted up rhetoric is very bullish for gold. i think what's happening in japan is very bullish for gold. and central banks continue to buy is bullish for gold, and it's breaking out for the first time, again, in awhile. and gold miners will continue to work. >> should we stay in gold, tim, despite these records? >> i would be -- i would stay in gold and i would stay in more gold and i would stay in more gold. there's nothing about the environment which includes more inflation possibly coming, but very much a case where i think we're going to have lower growth, we're going to have easier fed policy, very, very gold positive. on top of the global centralen banks. look, if everyone around the world is looking at the other person saying, we're not sure whether we're doing business with you, if we trust you, gold's going higher. i think the dynamic with the dollar -- look at that move that the dollar had today, it was a half a point, it's now -- not that far off of where it was, but weaker dollar is going to be

also very big deal for precious metals, industrials, and core commodities. i think you have a great opportunity in miners. coming up, schwab on the slide as it post-earnings woes continue. but first, new trial results out of roche show the cheap's latest treatment could have real promise. what it means for eli lilly and novo nor dollarsing, right after this. missed a moment of "fast?" catch us any time on the go. follow the "fast money" podcast. we're back right after this.

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welcome back. two very different tales of the market today. the nasdaq plunging 3%. its worst day since december 2022. the s&p down 1.5%. the dow jumped more than 240 points, topping 41,000 for the first time ever. ge recording its worst day. there are reports one of the company's wind turbine blades broke off off the coast of martha's vineyard this weekend. and vf corp announcing the sale of supreme to oakley parent for

1.5 billions the. meantime, u.s. listed shares of roche surging 7.5% today after the company released upbeat clinical data on its oral glp-1 weight loss drug. participanting losing 6.1% body weight than patients taking a placebo. those results sending shares of weight loss heavyweighheavyweig lilly andnordisk. let's get to jared holz, who is in the studio. >> unlike last time. >> he's here of. this is one of the drugs that roche acquired from karma. the other drug, they had positive results back in may for that obesity drug. so, is roche, does it have, like, a good chance now of getting something, you know, all the way through the pipeline? >> it's so hard to say. i mean, they're in the game. that was the purpose of acquiring that company for

almost $3 billion last year. they're in the conversation, i think it's way too early. and this trial today, this oral obesity, six patients, i believe, all of them were out of australia -- >> wait, there were six patients? >> six patients. >> it should be, not even counted. >> i didn't think it with us going to have that major of an impact -- >> at least somebody from new zealand, as well. >> exactly. >> we talked about all these trials that continue to hit. they're going to continue to come over the next year or two, and every time they seem to have a profound impact on the shares of lilly, novo. they bounce back almost every time. i think the same thing will happen here. and viking and structure, i thought, were down way too much. i mean, you have roche gaining $17 billion worth of value today? yet you've got companies that are a fraction of that that are moving lower? i felt like if anything they should be flat, maybe even up. i think the market will figure this out if not tomorrow, in the

coming weeks, and those stocks will go back up. >> so, i know it's a gigantic, huge market, but if you see results like this today that are so far away from actually turning into a product, you expect to see others sort of drop out of the race? >> i don't think so. >> too big? >> too big. you have two companies that have a combined market cap of almost $2 trillion. the market's begging these companies to be here. begging them. there's been nothing that's moved pharma stocks like this in the history of the industry, really. so, for all those that are onlookers that have not made investments here that still might, i think the odds that they get into the game, whether it's a merck, a j&j, are pretty high. >> go browns, and great to have you here. sometimes you just can't get here. that same show, i happened to not be here, too, but we participated from afar, jared. >> we did. >> everything we're seeing is reasons why you should be very worried, though, i think, about lilly and about novo, because if

ultimately everybody's going to get there, any hint of people getting in tells you that people are worried about these valuations, and the addressable market dynamic -- look, i'm long lilly, long other stuff, too, but -- i do think that this is -- this is a harbinger of price action. there's no question about it. and, yes, they may be overreactions for now, based upon six dudes in australia, but -- i think this is something we should listen to. >> i think so, too. i think the thing that bothers me more about lilly than anything else is that it's up so much this year. if this were a stock that was up 15%, 20%, it's probably flat today, it's up 60%. so, i think you're seeing a correction, obviously, the market orientation would have probably sent lilly and novo down or they would have been flat today anyway. i'm not super worried about it, but yeah, the competition is coming. it's very significant across pharma, across bio tech. so, there are going to be more of these. >> but the puck moves in this game. and i hate sports -- i can't follow through beyond the puck

moves. but basically, they're going to come out to market with an oral glp-1. fantastic. but the next goal is going to be a glp-1 or weight loss having that doesn't deteriorate muscle mass and so on. so, if lilly and novo are still ahead of the game in those races, then they will maintain their lead. >> do i hear about a hat trick? >> i don't know what that is. i'm not going to try that. >> i think that's right, too. i think lilly and novo are years ahead. they have the most money. they continue to innovate, probably better, faster than any of the other players, and they're going to have different modalities, different drugs they bring to market. probably before a roche, before a pfizer. so, i'm not incredibly worried about the competition, but yeah, any time you have two companies with this sort of lead and there's any sort of conversation at all that others could kind of penetrate that market, you're going to see share weakness. >> part of this is a rotation, right? just into -- the rotation that's going on in the broader markets in total, right? >> for sure.

yeah, today the -- >> pfizer is turning around. >> that's crazy. >> your pfizer. >> i know. >> 30 handle for the first time. >> yeah, pfizer up a lot, bristol almost up 5% at one point today. so, you are getting a value and you're getting an underperformer rotation, which is kind of synonymous at this point, concurrent with this news, it kind of all set up for these -- for lilly and novo to underperform today. i don't really think -- i doubt it lasts. >> okay. jared, great to see you in person. >> thank you. >> hope to see you in person again. >> we could pretend he's not here, but i will say, we've had him on a number of times. remember when viking therapeutics, they announced, during the show, one of the shows, the stock traded up $100. it's been cut in half since. and we talked about it then. probably ahead of itself. going to give you an opportunity now. i think we go down 50%. but this, to me, is a name that's in the crosshairs of a lot of big cap pharma. you doubt buy things for takeout, but this is one you want to look at for that. >> how are you feeling about your pfizer? >> i agree.

>> better? >> i think it's -- the best thing about pfizer right now is the chart. the best thing is that it's been basing. there's been a lot of news and a lot of disappointment. and frankly, a lack of catalysts, but again, and i would look at j&j, which is another name that i'm long, and, you know, they had decent, if not solid numbers today. they talked about 5%, you know, growth on the top line. that's very solid with an innovative med business that's growing better, their med tech was a little weaker. they have this talc overhang. but a bristol myers, as jared talked about, he's gone, these are stories that i think are part of our first part of our show. people want to own these stocks. i think they going here. >> and talc catalyst could be at the end of the month. >> they have a vote on the 26th. coming up, schwab shares sinking. what is behind today's move and is there more pain to come? and netflix earnings kick off big tech reports tomorrow. what the options market is expecting ahead of those results. more "fast money" in two.

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welcome back to "fast money." shares of charles schwab tumbling for a second straight day after the stock was downgraded on the back of yesterday's earnings.

the stock down nearly 16% this week. analysts pointing to what they call poor execution in earnings power, as reasons for the downgrade. schwab yesterday reported a drop in interest income and a decline in profit. shares now trading near their lowest levels of the year. karen? what do you make of this drop? >> well, i think -- i don't want to say it's overdone, but i think it's a pretty -- pretty big reaction to -- it's not a great problem, though, that's the thing. they're going to sort of shrink their way out of it by getting deposits off balance sheet. i never love shrink their way out of anything. maybe it's the right thing to do here. >> what's so funny? >> i don't know. >> you guys are snickering. as soon as she said shrink. >> why did you say you guys? >> i love it when the -- you shrink your way out of it and you laughed. >> never a strategy, by the way. >> the point about -- >> it's not a growth strategy. >> two things. her point about shrinking is that essentially, when you think about this company, i think net

interest, or, interest income is their biggest revenue line, right? so, if you talk about shrink in the bank -- and you would have thought, when interest rates going higher, it took out silicon valley. they were in the penalty box a little bit for some of the same reasons. portfolio of treasuries, that mark to market loss -- >> and losing deposits. >> correct. so, if you are going to shrink it, and also, they were talking about buying some of that high cost debt, and that could be capital they might have used for buy-back. >> debt traded down a little bit today. >> yeah. what was the problem with shrinking the business? >> why -- because i -- i don't have an issue with what they're trying to do. >> see, that's -- >> what? >> guy, do you think down 20% in two days was overdone? >> overdone, no? >> not necessarily. i mean, they were in the cross hairs, as dan just said, getting it back -- >> right. >> a lot of those problems, obviously, with what happened in the market, were sort of glossed over. i don't think they necessarily

went away. and i think charles schwab is a really important market sentiment indicator, and if it continues to trade lower, that's something that people might start focusing on. breaking news here on senator bob menendez. emily wilkins has the latest. emily? >> hey, melissa. well, nbc is now reporting that senator bob menendez has been telling allies that he will resign and step down from his senate seat. this, of course, comes after yesterday when he was found guilty on numerous counts for things including bribery and acting as a foreign agent. menendez has been called on by 44 democrats to step down at this point, especially with that guilty conviction yesterday. and now we can report that he has been telling allies that he will go ahead and step down. and, of course, this opens up for the potential election. he wasn't the nominee, there is a different democratic nominee in andy kim. he was still planning on running as an independent and it seems

like that will no longer be the case. melissa? >> emily, thank you. coming up, netflix kicks off tech earnings season tomorrow. what the market is predicting from the results, and a way to play it using options. and, here's a sneak peek at the cramer cam. jim is chatting with the first horizon ceo. catch the full interview, top of the hour on adon.""m mey meantime, more "fast money" in two. ley, old school hard work meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley.

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oo this is a good book title. welcome back to "fast money." the countdown to netflix earnings on. the streaming giant headlining the afterhours action tomorrow as shares try to break back to all-time highs. the options market is betting on a marquee move when this name reports. mike cope khouw has the action. hey, mike. >> hey there. the market implying a move over 8%, and as big a move as that is, that's less than the 9.5% that the company has averaged over the last eight reported quarters. and the trade that stuck out to me was a paurchase of a couple f the july 700 calls. buyer paid $9 aen cotract for that. and a quick ponint, that is the implied move to the upside. and number two, 700 is also that all-time high that you just referred to. and the stock has been a little bit weak. so, if you are inclined to make

a bullish bet, i think buying those calls is a better bet than reaching out and buying the stock right here. and looking at the last eight reported quarters, it's been a winning bet. you actually would have been better off buying options like these, costing 1.4% of the current stock price than going out and buying the stock itself. >> you know, it's interesting, in that last quarter, the stock gapped down 2%. the subscriber growth was less than expected, and they signaled they were going to stop posting subscriber numbers. and since then, the stock has just ripped, right? it had that gap, didn't stay down for too long. for me, where it is right now, probably not a great buy. i like what mike is suggestioning, calls define your risk. >> i sold some calls, because i do think that run has been so big. they're not great at sort of the guidance -- >> forecasting is not their thing. >> no. absolutely need to listen to the call. it's super important on this one. >> yeah. >> yeah, i think this falls under some of the megacap tech

concentration where you've had a big winner. we know the stock has tripled. the valuation is very different than it started. but it's not a case of a megacap tech stock -- it's a question of, what's the multiple you want to pay for a company that's so far out ahead. guy, i know you are a big "bridgerton" fan. i think engagement is part of what we're looking at. >> he knows not of what you speak. >> you know, you say that, you throw it out there. i don't know "bridgerton." i have not watched it, from what i'm told, it's like soft pornography. which i don't -- clearly you are familiar with it, tim. >> projecting. >> projecting it over to me. >> wow. >> just throwing it out there. >> netflix, if you will? >> highs we saw in 2021, a couple weeks ago. karen was smart to sell calls. what you're hoping for a move to the downside where you get it sort of south of $600 and reload again. >> mike khouw, thank you. up next, final trades.

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time for the final trade. let's go around the horn. tim? >> part of this broadening, i think it's boeing. i think it's not just defense, but boeing and the issues that are out there. >> karen? >> sort of along the same lines, talking about the rotation. we before just talking about pfizer. if anyone is looking for a stock with a low pe multiple and a very high yield, and still a good -- some good product, then, yes, pfizer. >> dan? >> yeah, kre, that's the small cap bank index. i just think it's a little overdone. 18% in one week. >> guy?

>> apparently if you watch "br "bridgerton" mel, you don't have to shrink your way out of things. tim filled me in on that earlier in the show. lockheed martin continues to go higher here. >> ew. that's all i have to say. thank you for watching "fast money." see you back here tomorrow at 5:00 for more "fas"t. "mad money" with jim cramer starts right now. my mission is simple to make you money, i am here to level the playing field for all investors. are promised to help you find it, mad money starts now . >> high, i am jim cramer. i'm just trying to make good money . my job is to try to explain what's going on, tweet me @jimcramer