>> and underscoring what double verify was telling us about the care that netflix needs to use in introducing these ad formats to consumers they want to make sure they get it right >> they want to make sure they get it right and they can afford to get it right, with free cash flow, $1.2 billion for the quarter, too well, it was a down day for the markets. that's going to do it for us here at "overtime. >> “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 all eyes on netflix. the streaming giant trouncing expectations for subscriber add in the latest quarter. shares well off their lows of the afterhours where do shares go from here and the pressure between china and taiwan racheting higher as u.s. policy in the region hangs in the balance. what could it mean for the markets? plus, domino's doesn't deliver on earnings. the ethereum trust sinks ahead of an expected etf and dr horton takes the builders

with it. i'm melissa lee, coming to you live from studio b at the nasdaq on the desk tonight -- steve grasso, courtney garcia, dan nathan and julie biel. we start with netflix. shares briefly turning positive in the last few minutes. the company saying it added 8 million subscribers in the latest quarter, and that is ad tier memberships rose 24% from a year ago the conference call starting 15 minutes ago. julia boorstin has been listening in julia? >> melissa, netflix shares did drop lower on lower than expected third quarter revenue guidance, despite the fact that the company is starting the third quarter with far more subscribers than expected. we have seen shares make up some of those losses. now down just fractionally this after the company reported a big subscriber beat. 8 million subscriber additions versus the 4.8 million estimated, and after a number of quarters of subscriber beats netflix warning that its third quarter paid net edition will be lower than the year ago quarter additions, which was nearly 9

million, and that was the first full quarter where the company saw the impact on the crackdown of password sharing. netflix's ad business is very much in focus on the call. the company announcing that it is starting to phase out its basic ad-free plan in the u.s. and france this after doing so in the uk and canada, which it says helped its ad member base grow 34%. netflix saying that it is on track to achieve critical ad subscriber scale for advertisers in 2025. noting that they do not expect advertising to be a primary driver of revenue growth this year or next year, but that they are -- this all because they are cautiously rolling out and testing ad formats and they won't have ad supply to reach demand until next year melissa? >> so, julia, i know that you and jon fortt went over this terminology, but it is confusing to the average person. this -- it seems like it's not a bad problem that netflix has >> it's not a bad problem that it has, but this is a company

that's really trying to shift gears. for so many years, they said, no ad verve tizing. and yes, we want to do it carefully, in such a way that we're not going to alien nate our subscribers, and what we really want to do here is build up a massive ad-supported subscriber base. and that's why they're phasing out this -- this lower cost ad-free tier, because they want those people to shift over to the ad supported tier where they are generating two revenue streams and creating enough inventory for advertisers to really be able to narrowly target people. and that is the real advantage of streaming video advertising you're not just showing an ad to anyone who is watching a show, but really able to reach people based on their preferences what they need there is massive scale. this is a massive international company, and when it comes to the ad-supported subscribers, they are coming off a base of zero, so, they're growing

quickly, but it's going to be awhile before they have the kind of scale that will enable them to do the kind of ad targeting that they really want to do. and that's what they're saying is going to be a year when they hit that tipping point in 2025 >> julia, thank you. keep us posted on the conference call julia boorstin dan, what do you make of this quarter? >> interesting that 2025 is the focus for really having inflection on adds, because that's the year they're going to stop announcing their subscriber adds so, there's been a lot of volatility with that here's the most important thing to me about the ad-supported model. it is right now low single digits percentage of their overall revenue. if you look at their gross margins, how they moved higher over the last few years, julia just said, this is very high margin business. so, there were 39.5% in 2022, 41.5% in 2023, expected to be near 45% this year so, they're turning on this profitability engine, and literally coming off such a small base here, this is great news for them. also, as they move into more

live stuff, i think that probably frees up some inventory, so, again, they are probably being very smart about this they've seen other platforms that have tried to jam lots of ads down your threat and it's not a great user experience when they do that >> more than 45% of signups were for ad tier, which was really interesting, and they expect that to increase >> i think that's really positive for them. the advertising revenue probably isn't going to add to their bottom line until next year. so, that where you do have the growth driver that you have looking forward, which is a good thing for them because at a certain point, they've gone from a company with a high growth, low profitable company, and they are surely going to shift that. and at what point does that justify the higher multiple margin the act that the advertising has runway to go here. >> this is a stock that's not immune from large selloffs we've seen it sell off and when you have to remind yourself, because every time you think of the stock, you think it only goes one way, but when you look at the chart --

>> which is what way after the last quarter, the one way was down sharply >> right right. so -- exactly. so, that's a great point so, one way, meaning up. and when you look at it now, you see the selloffs, and they take out large chunks of the stock, but what does it ultimately do run right back up. dan brings up not allowing you the -- to hear the subs number again. i think that's kind of an odd thing, right i mean, is that going to rub investors the wrong way? >> well, it already did. that's why the stock was down last quarter >> yes it hasn't happened mar markets shoot first and then ask questions later. but when you talk about live sports, we talk about live events, these are all things where they are definitely the premium, they're outperforming a disney by 4 to 1 at the very least on a year to date performance. when you really look at what they're doing, they've really

checked every box. so, at a certain point, i can't buy the stock. i love the product, i will never -- >> too expensive >> no, no, i can't -- yes. but i'll never cancel it so, i find myself being ironic when i talk about something that will always take my money, but i won't invest in it to get my money back >> julie, when i saw the headlines about the ad tiers and inventory, i was worried about the ad market, but it really sounds like the advertising industry wants to place the ads and so maybe there isn't an issue with the health of the overall advertising industry, it's just netflix's ability to take on those ads and so, how do you sort of, you know, i don't know, apply that knowledge to some other areas in the market >> well, i think what's really so critical to understand is that investors are much more willing to pay and get excited about advertising than they are about the ability to predict what's going to be the next hit tv show, right it's harder to figure out what

is going to be the next "house of cards," the next great hit, and so, it is much easier to be able to predict, we're going to be able to shove more ads, you know, on a sequential basis, and that's really the kind of thing that wall street rewards so, i can understand their desire to do that, because being programatic is something they are very good. they have users that are clearly accepting of this medium and that is, i think, the big question that they have answered, so, it gives investors like me who are worried that there wouldn't be a lot of excitement around an ad tier, you know, some comfort >> is this a good thing or bad thing for the other streamers with ad-supported tiers? is it that advertisers all want on netflix and maybe not others, or does this show you that the ad dollars exist for these ad tiers in general >> i think it's bad for all the others ultimately, it's going to migrate over to netflix once they present the opportunity as

far as the, you know, they can take the inventory or they have the inventory. i'll say this about what steve said about volatility in the stock. the post-covid hangover from late 2021 to the lows, i think, in mid 2022, this stock lost 75% of its value it's pretty shocking to think about. it traded as high as $700 in november 2021, now it's back, or was, two weeks ago at $700 guy would say that's a perfect double top right there if you look at the valuation, if you can buy into the fact that ads are going to be a big part of this company going forward, they're expected to have 20% earnings growth for the next two years, 12% sales growth with rising margins you say to yourself, then you want to buy this stock, you know what i mean, when it's down, because it's trading 28 times this year and about, you know, 24 times next or something that is reasonable relative to that expected growth >> and -- sorry. it did get rejected on the double top it got rejected almost down to the penny on that -- on that

resistance up around $700. but if you look in hindsight, it didn't have all of these other levers that they have now. they didn't have the ad base model, they didn't have live streaming sports, they didn't have live events so, there's a lot of other things that you can put into it now where you think it should be worth more than it was, but it's still on a technical basis -- they don't care about the story. they don't care about the fundamentals >> all right, so, steve can't get himself to buy it, though he is a netflix subscriber. how about you? >> we have exposure to it, but it is not where we're adding money right now. you're seeing a big rotation, and there are some legs to that. something i own, i'm not getting out of it, but i don't think it's where i want to add to right now, because it is expensive. i'm not cancelling netflix, but it's an expensive stock right now. >> julie, where do you stand on the valuation? >> i think the valuation is relatively rich, but i don't think it's egregious, because i

do think they're showing a really solid level of profitability you and if you assume that they continue to have good success with their ad-supported business model, it's just not egregious. there are so many other stocks i would point to as being really expensive. >> we will keep you posted on the conference call. let's get to china, tensions between china and taiwan are climbing china announcing it is suspending nuclear talks with washington due to ongoing arm s sales to china economist stephen roach is considered one of the world's leading experts on china he is a former morgan stanley asia chairman and now a yale senior fellow. stephen, great to see you. >> thanks, melissa great to talk to you >> there was a lot of chatter on trading floors around the country about an imminent invasion of taiwan by china. how do you view that i mean, what are the odds of that in your view? >> odds of that are extremely

low right now. if it came, it would be initiated by china, they've got major problems with their economy right now, they're just coming out of a very big policy meeting. the agenda has yet to be fully released, but the last thing they want to do is complicate their domestic issues with an external shock like invading taiwan >> all right, so, you're saying it's just chatter, which is, i'll sure, a relief. but in terms of policy and, you know, the next administration, be it a democratic or republican one, are tensions just -- do you expect them to be any different? will they be almost racheted up or less so under any particular administration, does it matter are they destined to go higher >> well, you know, i think it does matter. you have to try to disentangle the two. biden is more focused on

tightening the noose on chinese technology, and i think the -- the repercussions on chip stocks are more 0a reflection of what biden has been talking about with respect to sanctions on advanced semiconkonconductors ad a.i.-enabled chips coming from nvidia trump is more the tariff man, and his tariff proposal is draconian, compared to the one that he unleashed in 2018 and 2019 that would clearly be a negative for china, but is less of a taiwan threat than the more targeted actions of the biden administration right now >> so, stephen, i know that you said it's a very small chance they would invade taiwan, but if you look at the timeline, i've seen some interesting stats, where they really target 2025 to 2027, so, 2027 is the essecentel

of the pla and once you get to 2035, demographics work against them so, if you had to put odds on a time period, because obviously we could all be wrong, and you could be surprised with an invasion, is there a time period where you think it would happen, if it were going to happen >> later rather than sooner. china -- there's lots of rumors in the west, really focused on the year 2027, supposedly some intelligence that is captured remarks by president xi of targeting that date. i don't believe that i think, again, china is more interested in the long game here they do not want to destabilize, still, the one country, two systems approach they are concerned about the new

sort of pro-independence bias of the newly installed president lai. they are also concerned about the pro-independence bipartisan bias in the u.s. congress. what trump has said in his bloomberg interview is, you know, we're -- we're not really going to lean aggressively against deterring china from invading taiwan. taiwan needs to be able to fund its own defense, we'll treat it as an insurance policy they want to pay the premium, we'll protect them but that does not sound nearly as aggressive as the current political stance in the u.s. congress and the biden administration right now >> stephen, so, you just mentioned that political stance. so, let's put that aside let's think about chinese economic growth, i know that last quarter was disappointing i think it is expected to be

about 5% this year you just said that they're looking to play the long game. when you think about the long game in china, they have a huge demographic problem, which i know you are very familiar with. and they are supposed to go from 1.3 billion people to under a billion, and maybe in 50 years, to 800 million when you think about that, in the long game, that makes them probably not the sort offed a verve tear that we might think, but does it increase the chance that they make a move, to steve's point, maybe in a few years, on taiwan, because of that lagging growth? >> again, i think if -- if you've got weakness on the growth front, to overreach strategically, from a geopolitical point of view, is a classic recipe of a declining great power. china knows the great power history very well, and that would be foolish of them to do the demographic issues you point to are absolutely critical, like japan faced 20 years ago the only antedote to that is for

china to boost its productivity, and right now, the productivity story is -- is not good in china. productivity -- total factor productivity is actually declining, and so, they've got a pretty serious growth problem staring them for the next several decades. >> stephen, always great to speak with you thank you so much for your time. >> thanks, melissa >> stephen roach so, taiwan semi would be in the crosshairs of any sort of tensions here. they had earnings, it all looked good they predicted, you know, an extended, prolonged a.i. cycle >> yeah, they better say that. i mean, like, as far as the quarter -- i'm just saying it was not better than some rosy expectations so, i think it was interesting, the reversal we saw there. i think it's a safe bet to say, all the times we want to trade taiwan semi or some of the other stocks that have exposure to china and obviously taiwan, it's probably not happening any time

soon probably should not be on your bingo card as far as investing around the world >> i understand that, but there's a difference between knowing, we know this intellectually that the odds are low, but sentiment can be something completely different when it comes to racheting china tensions and the impact on the stock. >> don't you think tesla would have had a really bad day if this is the day people were really worried about this? you know, tesla has big exposure there, lots of competition, they rely on them for manufacturing, for demand, and rare earth materials and the stock was up >> i agree with the last part of your statement, but i think tesla's a different story, because there's so many other things that are pulling tesla's price around you answered the question when you asked stephen yourself, if you are going to get an invasion, they've really honed in on two years, because 2030, the usa becomes -- has sovereignty in their semi

manufacturing here so, there's only a small window. and then they run out of demographics in 2035 >> you are assuming everything goes well in terms of building the intel foundries, et cetera >> arizona, japan. >> finding the work force needed to staff up all the jobs -- >> they have to. they have to, and, of course, there's going to be things that go wrong, but that doesn't mean -- i think that china, their weakness on an economic level actually makes me more convinced that they're going to invade taiwan, not the other way. >> all right so, is the trade taiwan semi or is the trade intel, julie biel >> probably around intel i think i agree, it's just so difficult to be able to predict these. but i kind of agree with steve that if they are in a weaker economic position, that actually gives them more liberty, right the nice thing about having such deep trading ties is that it makes it harder to really take this kind of action. and so, when that starts to decouple and get taken away, you have more room for a rogue actor, and i think that's where

we're all kind of concerned. but i think in the meantime, there's too much uncertainty for me for taiwan semi, so, i think intel is probably better at this time. all right, we have a news alert on hawaiian electric reaching a settlement over last year's maui fire kate rooney has the latest >> yeah, shares of hawaiian electric are up double digits right now, on a report that it is among the firms eyeing a $4 billion settlement over the maui wildfires. this would be to resolve hundreds of lawsuits over the wildfire that ripped through maui last year this is according to bloomberg, citing people familiar with that deal the proposed number appears to be below the estimated capital cost shares up more than 25%. the estimate was around $5.5 billion, according to some of the damage assessments released last year, the fire destroyed or damaged more than 2,200 structures the majority of those were residential. hawaiian electric does operate utility on the island. back to you, mel >> thank you. coming up, domino's pizza

can't avoid the noid i don't know what that means the s&p's worst performer after a rough earnings print before the bell we'll slice up the numbers, next. on the other hand, dr horton topping the s&p 500 today. a huge earnings print helping the home builder hurry higher. what it means for the space, after mortgage rates zbin to fall right after this. this is "fast money" with mel melissa lee, right here on cnbcs ! whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free. okay, team! oh, thank you so much i couldn't have done it without you.

honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

[ put a little love in your heart by david ruffin begins to play ] my bad, my bad. good race. - you too. you were tough out there. thank you. i'm getting you next time though. oh i got you, i got you. down goes jewett. jewett and amos are down. what a lovely sign of sportsmanship. you okay? yeah. ♪ ♪

welcome back shares of domino's pizza tumbling more than 13% today after this morning's earnings report the company reporting an eps beat and revenues in line with expectations, but warning of challenges internationally the stock into negative territory for the year cnbc's kate rogers has the details. >> hey there, melissa. the news weighing on the stock this whole day, sending it down more than 13%, as the company temporarily suspended its net restaurant openings due to challenges with its largest international franchises struggling in japan and france do domino's did see u.s. comps driven by transaction growth and loyalty redemptions particularly with carry-out business. executives continue to note this

is just the beginning for the u.s. loyalty program relaunch, which is meant to be a multi-year comp driver, saying today's orders are tomorrow's sales. ceo told analysts this a.m. of the program. now, it also said it saw in the face of consumer spending slowing overall, actually growing orders in both delivery and carry-out in every income cohort that will be the theme consumer sentiment and the impact of value and pricing. there's new data from placer a.i. finding that mcdonald's, starbucks, and chili's saw a boost in foot traffic from limited time offers. keeping them coming back beyond those limited time frame is really going to be key >> thank you, kate was this overdone? there are a number of analysts today coming out saying it was overdone, that the international eps impact would be 00.3%, whic seems pretty small >> it is, but when you really look at the big picture, we

started talking about the stock when it was $18. it's had an incredible run and a lot of that run has exhausted itself domestically. and now the story, is what is that international growth going to be like and if you have an international growth miss or an international growth that's not going to be as fast as they otherwise thought it would be, that's what the stock is rallying on, and that's what the stock is gaining new buyers on. you don't have it, you don't have the buyers. >> courtney, what is your take >> i would say this is overstated i do agree, but just the move today, where it was down 13% in a day, specifically on that weakness in france and japan, i would say you're going to see a bounce back from some of that. and when you do look at some of the u.s. numbers, seeing they had positive, both delivery and takeout orders across all income cohorts is actually good, especially when competitors have to do discounts to get people in i think there are pros and cons here >> if, steve, the premise you're making is that it has been a winner, and so, therefore,

you're looking for that next leg of growth, but the con ttext in terms of this move is, people moving out of the winners and going into other places. and so, maybe just also caught up in that sort of rotation out of the relative winners within a sector >> i would think that would be the case if it was still having nothing but good news coming out. and it was rewarded for -- they were the first pizza place to come out with that digital format, right? they were the original to really bang out a lot of numbers. my kids would just do it on the couch, ordering pizza through the digital thing. it was a video game. we would order pizza as an appetizer. so, i get what you are saying, but i would like them to see knocking the doors out of it >> what kind of italian -- what is the operation you're running over there in the grasso household? >> fair. >> i'm glad you said that. i think america was thinking the same thing >> there's a great local spot right down the street. support your own

i'll say this. the broader thing, i would say -- they just split us up there. we were going to fight over pizza. >> this week alone, if you l looked at asml and reaction to its earnings, i think this is the point you're kind of making. so, you know, elevator, you know, down, but it was the escalator up, and i think that sort of dynamic might be playing out a bit more as we get into earnings season. >> right there's a lot more "fast money" to come. here's what's coming up next. dr horton is building up a strong foundation and helping the homeowners buck today's market trend inside the blockbuster earnings report that could shake up the housing trade, next. plus, the small caps are delivering big gains, but are there already serious threats to the russell's rip-roaring rally? we'll find out just how long this wild ride higher can last you're watching "fast money," live from the nasdaq market site in times square. we're back right after this.

>> university of maryland global campus is a school for real life, one that values the successes you've already achieved.

earn up to 90 undergraduate credits for relevant experience and get the support you need from your first day to graduation day and beyond. what will your next success be? welcome back to "fast money. dr horton topping the tape today. shares hitting a new all-time high as the company also authorized a $4 billion share repurchase program the move helping the itv home builder etf hit a new record

toll brothers, pultegroup and lennar all up. kb home umenclosing in the red is this laying the foundation -- >> huh >> for more strength in the group, julie >> yeah, i -- the most exciting kind of metric that i saw out of the release was that the incentives they have to do in order to get people to buy down interest rates has gone down so, that's really improved their gross margin i think that's pretty critical in order for the continued strength in home builders to persist. you need to see gross margins expanding so that the earnings growth is not just dependent on a very, very strong demand for their product, and i think the biggest challenge they could face is existing home sales starting to come online. >> yes that was going to be my next question what happens then, courtney? do they have a golden window, until houses start coming back on the market and there's much more supply? and new homes just aren't necessary anymore. >> i don't think so.

and i think because, even if rates come down, they have to come down quite a bit to get to the rates that all of the current people have mortgages are going to be at a beneficial place to sell their existing homes. i think we are still a ways away from that. they are really in a position where they are uniquely positioned for the first time home buyer people are just priced out of the market and those are people that are going to come in the second rates come down. there's going to be more buyers, even if more supply is on the market. coming up, netflix's earnings call just wrapping up and the stock is now positive. rich greenfield of lightshed partners will join us with headlines. and hi s view on where the streaming giant is headed next. plus, a pull back in small caps we'll look at whether this rally can recover, 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. your skin is ever-changing, take care of it with gold bond's healing

formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond. frustrated by skin tags? dr. scholl's has the breakthrough you've been waiting for. now there's an easier-to-use at home skin tag remover, clinically proven to remove skin tags safely in as little as one treatment.

welcome back to "fast money. stocks finishing thursday solidly in the red the dow hit a new intraday record earlier in the session, but ended the day down more than 500 point. the s&p seeing its first two-day losing streak in nearly a month,

and the nasdaq losing 1%. meta bucking today's trend after "the financial times" reported they could look to take a stake in essilorluxottica. they announced a purchase of clothing brand supreme. and broadcom jumping late in the day on a report that the chip maker has talked to openai in developing a new a.i. chip. former president donald trump set to take the stage at the republican national convention this evening. there he is expected to officially accept the gop presidential nomination. this as president biden takes a step back from the campaign trail after testing positive for covid, and after he's facing mounting calls to drop out of the race eamon javers has the very latest eamon? >> reporter: melissa, there's a rising sense of anticipation, particularly now that they've opened the security gates, and the delegates are starting to flow in for this evening there's a real question about what

donald trump is going to say tonight. this is his first big major address after that horrific assassination attempt over the weekend. and for our audience, the question will be, will his tone match the populist rhetoric we heard from j.d. vance last night, very critical of wall street, very critical of big business so, we'll be watching for all of that i had a chance to talk briefly this morning with lara trump, the co-chair of the republican national committee he said to expect a different donald trump tonight she said he's going to be much softer tonight in his approach to this address, and that reflects both the assassination attempt, and now his position as far and away the leader in this campaign, given the implosion that they're seeing on the other side of the aisle with the democratic campaign for president of the united states so, people here are very excited about this campaign. i also had a chance to talk to another member of the trump family today, i talked briefly with eric trump, and i asked him about that populist theme that we heard in the speeches last

night. i asked him if wall street could be concerned about that. he said no he said, what a second trump administration, from his view, would do is try to bring back interest rates, inflation rates, and other successful elements of the company that prevailed during the first trump term. so, he's sending a message of reassurance to wall street this afternoon after the speeches last night then, there's the question hanging over all of this, which is joe biden is that going to be the candidate that they're running against in november? real uncertainty around that now, as we head into the weekend. and one of the big questions is, is this campaign, which is really built here at the rnc to run against joe biden, is this campaign set up to run against any of these other prominent democrats, including some of the governors out there, vice president xkamala harris and others one indication of uneasiness is that a lot of the speakers throughout the week here have been attacking the biden/harris administration attacking joe biden and kamala

harris in a lot of their criticisms that's something you didn't hear just a couple of weeks ago now they're ramping up the criticism of kamala harris in expectation that maybe she might be the person that they're running against. all of that hanging in the balance, as we wait for this speech tonight, melissa. back over to you >> very busy evening eamon, thank you and check out what prediction markets have to sate about the election former president trump's odds of a win getting a boost, and vice president kamala harris' odds are on an upswing. i looked at the odds for trump versus harris, it still favors trump, the betting market. so, the reason why we bring this all up and the reason why we're going through these cross-currents going on with the elections and whether or not president biden will actually be the candidate is because what we've seen over the past week in part has been president trump's odds of getting re-elected going up and the markets are favoring the trump trades, so called

trump trades and so, to the degree that his lead is threatened, will we see those trades come off? i mean, i think that is the question that we face here, especially as today, we saw a bit of a turnaround in some of the trades >> the one thing i would say, while his odds of dropping out have increased, i don't think it's a safe bet that kamala harris would be the candidate either, right? so, i think that uncertainty is likely to stick around for awhile so, again, to your point about what the trump trade was, i just remember from 2017 to late 2020 or so, we ran decos almost every day about the trump trade and this and that and whatever, you know, we -- my point is, the market's been okay, you know what i mean? the economy's actually been okay during this, right and so, i don't know, i don't think it really matters. what matter is not who is in the white house, but who has the senate and the house, relative to who is in the white house >> and that's the down ballot that could be effected by all this that's what really matters is it going to be a red wave

people are dealing with high inflation, people are dealing with wars that are broken out. he's going to have a softer tone, in my opinion, but he's going to have to say, help is on the way for republican and i don't think they can pass kamala i think it's going to be a hard thing. everybody else has a problem with getting that money to kamala you could say it's biden/harris, but you can't say it's newsom. all that money he has, i don't think it's an easy way to just push it out to another candidate, and by the way, it would wreak havoc to the democratic party if they pass ka kamala. the russell 2,000 dropping for a second straight day. the small cap index losing 2%. its worst day since late april the russell has far outpaced the broader markets so far this month, up more than 7% while the s&p 500 is basically flat and julie, you're saying that the rotation to small caps can only be sustained if this group starting to deliver earnings growth none of this is the trump trade, the notion that policies will be benefit to main street, interest

rates will be low, and that's beneficial to small caps >> i mean, we saw it in december we've already forgotten the reversal that we had in small caps in december, where everyone got very enthusiastic about rates. bid up small caps. and the thing is, they really haven't been able to deliver earnings growth as a group and it makes sense, because they are much more impacted by inflation. if you think of large cap as like a fire hose, right, 15-year-old kid is going to be able to walk right through it. your 3-year-old is going to get knocked down by that and probably cps is going to get called, as well. but the point is is that most of small cap really just hasn't been able to give you the earnings growth you would expect we're expecting a trough in the second is quarter, but that still hasn't been seen yet until you see that, we have to expect it to sustain itself. that doesn't necessarily mean that they're going to be in great shape going on from here >> all right

coming up, crypto in a crunch. e this here yuz etfs expected to begin trading next week. we'll drive into what had grayscale sinking today. that's next. but first, another check on netflix. after results, the stock is higher by 0.6% rich greenfield will join us straight from the earnings call thllis takeawas. more "fast money" in two and relentlessly work with you to make them real. (intercom) t minus 10... (janet) so much space! that open kitchen!entlessly work with you (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. from pep in their step to shine in their coats, when people switch their dog's food to the farmer's dog, the effects can seem like magic. but there's no magic involved. (dog bark)

it's just smarter, healthier pet food. it's amazing what real food can do. >> no application fee if you apply by august 29th at university of maryland global campus, an accredited university that's transformed adult lives for 75 years. you're not waiting to win, you're ready to succeed again at umgc.edu. [water flowing] [water flowing] [phone dings] oh my god. what? the host is coming back. (♪♪) [birds chirping] [phone dings] meanwhile, at a vrbo... oh my god. what? i got onekeycash on this house. hmm... [water flowing]

hmm... when other vacation rentals throw curveballs, try one that gives rewards. - [narrator] this is my coffee shop. we just moved into a bigger space, when other vacation rentals throw curveballs, brought on another employee, and ordered new branded gear for the team. it was so easy. i just chose my products, added our logo, and placed my order. bring your own team together with custom gear. get started today at customink.com.

welcome back to "fast money. here is another check on netflix. shares are now in the green, up 0.6% the earnings call ending just moments ago. rich greenfield joins us now rich, what stood out to you? >> you know, i think what was really interesting, first of all, there was nothing shocking. i guess -- the only thing shocking is, they continue to notably exceed subscriber expectations, and so, you know, i'm sure we can go back to the videotape, melissa, go back a year plus and people are like, oh, netflix is dead, you know, growth has stopped, remember when they started doing advertising, herb was so scared that the entire story was broken, they were never going to grow subscribers and you look at the amount of subscribers they're adding on a quarterly basis, you know, 8 million in the quarter, like,

it's just stunning yes, password sharing is still a benefit, sure, having a cheaper ad tier is helping, but it is just amazing the entire media sector overall scaling back, pulling back on content, slashing their marketing spend, retrenching, trying to get out of these multibillion dollars of losses, and here's netflix spending $17 billion plus on content and growing it nfl, wwe, tons of shows like "baby reindeer" and now the dallas cowboys cheerleaders show one after another. and you look at the subscriber numbers, they're showing everyone, you need to spend on a lot of great content to build this business. you can't do it on the cheap not through bundling, not through jvs, not through partnerships, you just need to spend. and that's something i think the rest of the sector just doesn't understand >> so, this -- i mean, in your

view, it sounds like you think this quarter and what netflix is saying understand scores this is the netflix's world and all the others are going to have a really hard time competing >> i mean, you are sort of seeing that. paramount, sky dance, right? like, abandoning ship and realizing they have to do a transaction. wbd talking about, you know, doing -- do we start shedding some assets? everyone in this space is literally, you're seeing all these joint ventures and bundled partnerships, hbo -- sorry, max and disney, like, everywhere you look, the venue sports, you know, venture, like, everyone is struggling because they don't -- they're unwilling to spend aggressively enough on great content and great technology >> right >> and that's the simple problem they're all facing there's no way to do this cheaply. you got to do the long and hard way. >> what does this -- what does the quarter, the netflix quarter, tell you about the health of the advertising

industry and how do you imput that onto some of the other platforms that have ad tiers >> i think overall, the connected tv ad market is very healthy. there's no doubt that netflix has been held back, they made a mistake choosing microsoft sander a lot of advertisers just did not want to work with xander i think it's held them back. netflix just made another shift in management this evening, you know, getting rid of the former head of hulu's ade sad sales who joined then. we'll see who they bring in. there's no doubt netflix's ad sales is growing, but as they start to bring that tech in-house, that's where you're really going to see the unlock over the course of the next couple of years. that's really where you're going to see a meaningful acceleration i think advertising overall in the ctv space feels very healthy right now. >> okay. rich, thank you. always good to hear from you rich greenfield. so, how do you feel about it now, courtney?

anything changed >> no, i mean, i still think short-term, i think the advertising business has some room for growth and i think that's going to be a positive for them i think longer term, there are some concerns, especially as they're going to pull back their subscriber numbers starting next year, i mean, when does that growth stop? it's not here in the short-term, but it's going to be a question. >> what is very surprising is the lack of movement in the stock afterhours, which is a real departure from what we've seen >> i think it was good enough. the one thing i'll say about the crackdown on password sharing, there was definitely some noise in and around that when you think about ad-supported models, i get it, i have a 21-year-old daughter, 18-year-old, they don't care about ads. they have grown -- >> they don't mind watching ads? >> no. they don't know how to turn the tv on. if i had to tell you how many times i get a text saying, how do i turn the tv on? they're watching on their phone, they're watching on their tablets, they don't care about ads. coming up, the ethereum trust tumbling as the deadline for etf applications closes.

the next leg of the crypto trade is next. >> university of maryland global campus is a school for real life, one that values the successes you've already achieved. earn up to 90 undergraduate credits for relevant experience and get the support you need from your first day to graduation day and beyond. what will your next success be?

dave's company just scored to graduation day and beyond. the comcast business 5-year price lock guarantee. high five! high five! -i'm in a call... it's 5 years of reliable, gig speed internet... five years of advanced security... five years of a great rate that won't change. yep, dave's feeling it. but it's only for a limited time. five years? -five years? introducing the comcast business 5-year price lock guarantee. powering 5 years of savings. powering possibilities. welcome back to "fast money. the grayscale ethereum trust plunging today after the s.e.c. approved the company's

application for a mini ethereum trust, which will be seeded with 10% of its predecessor's assets. this all coming on s-1 deadline day for spot ethereum etf applications steve, you flagged this. >> you see it's down 10%, so, this was the record date everyone up until yesterday who owns ethereum grayscale trust is entitled to get the ethereum, the ethe mini. so -- this has been done plenty of times you have minis in the other e etfs tha today is the s-1 filing date. it's due to start trading next week so, if you own ethe-e, the grayscale trust we're talking about, you're going to get, in your account, next week, when it starts trading, the ethe so, you'll have 10% stake. 10% seed no other etf is going to have that seeding so, they have a head start with about a billion dollars worth of investment into it, and it's tax

free, if you own the grayscale ethereum trust so, it's just a little token to get it and now that's seen as more of a retail product, where the other one is considered an institutional product. it's actually probably going to be priced at $5, so, if you think about that level, that's going to be an amazing retail product. all right. up next, falras.in tde at mor ele untapped possibilities and relentlessly work with you to make them real.

time for the final trade julie beal >> i think p.e. is really turning around and needing to sell their companies and moelis will probably help you do it >> steve >> i'm bullish on ethereum and ethereum trust and on the mini take your pick

>> courtney? >> dhi regardless of where rates are going, supply/demand is not going away >> i think mcdonald's, so bad it's good, maybe >> all right, thank you for watching "fast money." see you back here tomorrow meantime, "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's 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 want to make friends. i'm just trying to make you money. my job not just to entertain but educate and teach you. call me at 1-800-743-cnbc. or tweet me @jimcramer sometimes it feels like it's harder to own winners than