that's more of a tactical thing, not a fundamental thing. the end of earnings season sometimes means you have a rethinking the fed did not give you any incremental reason to worry about tightening >> they are patient on inflation. >> patient will you about not hesitate to move >> that's going to do it for "closing bell. "fast money" begins now. >> overlooking new york city's time squares, this is "fast money. i am melissa lee tonight on fast we have our eyes on another round of earnings movers after the bell. we will bring you the trades and shares of the on line trading somebody seeing their worst day in three years why not just one but two of our

traders bought in. and what is behind the move. we start off with the taper heard around the world the fed finally announcing the long awaited windown of its bond program. let's go straight to steve who has the details. you will tell us, steve, but i am curious what fed fund futures are saying at this point >> i am going to give you that in just about half a minute. first let's do the news. the fed took its first tentative steps to removing the pandemic emergency policy members at the november meeting it will begin to reduce its $120 in monthly as set purchases it will bring it down to 105 billion monthly. how will it get there? 10 billion less in treasuries.

they said the amount of taper can be adjusted if the economic outlook changes. fed chair jay powell said it will put them in position if needed >> we see higher inflation and we have to be in position should it become a threat -- create a threat of more persistent, longer term inflation. >> it was fed powell's first meeting. the market has rate hikes beginning in july rather than september. he didn't talk about pushing back on pricing didn't deny it either the first hike in july all of

the way to a 69% chance of a second hike by december. powell acknowledged the inflation is higher than he's comfortable with and the supply bottleneck is larger and more persistent than expected but they expect inflation to come down once bottlenecks ease up did you get your answer? >> basically he's affirming where the markets are. i know you said he didn't affirm but he didn't push it off. the fact that the market is so dramatically repriced this the last three weeks, and he didn't push back, i think that speaks volumes. >> i agree and the stock market seemed to be weary of a more hawkish comment from powell. i think now the market sees it could go either way.

if that's really the case. if you put the chart back up and tell me i am going to have 50 basis points by the end of december, you will get rid of the taper slowly it's not that bad of a situation for the stock market if that's the worst it gets >> thank you welcome back, first of all, second of all, what did you make of everything? >> the federal reserve has done an amazing job much speaking to the market they have done a masterful job since october of 2018 when jerome powell learned a lesson i think steve hit the nail on the head what i will say is tapering is great. but we are talking about a fed balance sheet that at this time next year will be approaching

9.5 trillion which is significant. but in terms of what we heard today, that hawkish tone was not there. the russell, the small cap liked it because it has broken out to a new all-time high. >> is this the green light for santa claus rally into year end? >> i think it started a couple weeks ago. this year you had to buy early i guess. supply chain i guess it started early i thought he did -- like guy said, i thought he did a masterful job of telegraphing what they would do i think the fed and market hold each other hostage and if nobody makes any sudden moves we will get out of here alive. i think that's what he is trying to do. i think this is the start of talking about raising rates. just the beginning he didn't push back on that june, july so i think that's starting too

if he does the same thing, i think the market can live with it much but i think protection is relatively cheap. i want to buy more protection. >> the markets can do tightening without j. powell doing anything if we see it as -- i am not going to say this. i will it almost doesn't matter what powell does in reality because the markets are doing the tightening here. >> it's like the fed a meeting ago was trying to establish credibility by being hawkish today they are trying to show they are in charge of the markets and they can be more dove-ish if they want to be. also flexing in front of the

central banks and saying we are the biggest, the baddest this was a dove-ish take or market fearful of plots moving so bond yields -- you had the short end on a handful of basis points the long end went up a couple. it was a sense that tapering is all you have again, we are in charge, not the market i don't believe they can do that but they did that today. if you look at higher risk assets as we sorted through this first of all, the dollar sold off 25 bits signaling if our central bank is behind other central banks, the dollar will weaken that will quickly turn i love steve and the fellow blues band but the minute we start moving

from there, i don't care that we are back to normal, the crowd will hate it the fed has created a dynamic even if we get back to pre-covid levels on interest rates, that's not good enough forthis market right now. it's not going to happen overnight. sorry, guy, we can say it is a christmas rally. we have been saying it for the last 40 days you do have it i don't think markets need to sell off and i think the markets tell you there is a sigh of relief but look out when it happens and it will happen >> a sigh of relief for valuation stocks and tech stocks >> i echo the rest of the group. i think it took him a while to get to the learning curve, but the 210 curve has widened slightly i don't think he has to raise

rates. to your point, the market can do what it wants around that. if you look at the ten-year right now, it doesn't imply any inflation today. you can say it's positioning, but i think it's more of a reflection of the supply chain issues coming back from a pan depp i -- pandemic, markets reopening. i don't think powell has to do a darn thing so value and tech are all clear. so what you said before -- i think what you were going to say before as well, but what i will say is it really doesn't matter. the market wants to move higher and is actually going to reap tightening and taper when it happens. >> open arms that is quite a prediction i have a question. if you are a believer that all of this inflation we are seeing

right now -- and i know people are seeing in their households in everything they buy, if you are a believer that's transitra transitory, should you invest in oil stocks >> if you could give me a time frame -- >> six months. >> no, you might want to take a powder given some of the price action i think the oil trade is intact. i understand they have sold off a bit, but i think the oil play is intact. i think they understand that transitory is just a worry and not as transit ri as they thought six months ago they thought we would be well beyond this by december of this year and we are not close. you can talk transitory, but it

is not going away any time soon. >> karen, what is the number one thing that concerns you about what might happen to this rally? >> covid turning another variant which i think we all think of as a lower likelihood, but the reopen trade has picked up a lot of steam particularly retail today. that would be one thing. i guess we could see trouble, a fiscal cliff and debt ceiling. that is transitory, but it happens every single time and gets the mark afraid and big misses if the port situation gets worse instead of better.

cargo is going down, but if it starts to go the other way, we will see earnings go down in probably another quarter let's bring in carter to break this down. this goes to the conversation we have been having >> in many way it does crude a year ago was $40 a barrel and is $80 now. a big move we hit as high as $85 a few sessions ago is this a sell-off -- is it normal a chart to look where, if it goes further, where it might go. you see on the top i have annotated with an internal trend line it has failed three times to the

penny right at that ascending line if you look at the drawdowns that ensued, we had the march draw down that was 16%, the july/august drawdown that was 20 and this is down about 6 or 7 now. do we have to go down as far as the others no but it isn't random where we stop third chart. so if this dip were to continue and it's more in line with the march dip down 15, 16 or the july dip of 20, that would take you to 72 and about a 15% decline. final chart. this minor channel that we are in we flirted with breaking it today. i think one has to assume that we will break it or say this 6

or 7% now will go further. >> does that necessarily mean equities will fall apart >> let's say it this way if you were to look month by month from the month of the pandemic hit in march, oil as a sector, energy was down much worse than the s&p then in april and may energy ricochetted hard as did the market but much more than market. since then 20 months, energy sector has outperformed the s&p ten. if one didn't catch the first two months, april, energy has been a massive underperformer. i just don't think it pays for the risk >> thank you, carter one is not paid for the risk tim? what is your sense on energy stocks >> there is not a linear relationship between the oil

price and what you see the stocks do. they are nowhere near the pre-covid levels some of this is drilling into -- pun intended -- you need a higher oil price to see people reaching out and drilling and expanding their budgets. i think we are going to see that i think the reality would be the structural nature of this sector would be the swing production doesn't exist in the united states based on a lack of investment they are the ones that at least for now are turning the screws a little bit i think for now they are friends and i think they will at least continue to be in position to have cohesion and solidarity among that group i don't think it will fall unless you have a monetary impact and we are talking about the fed and dynamics that affect the price of oil

the secular dynamics around investment or lack thereof in oil, i think oil prices are moving higher. if we are worried about inflation, the fed is not going to impact the price of oil and commodities overnight. it makes sense we have had a pullback you also haven't had macroopec dynamics to drive it higher. >> steve >> i believe oil is coming in. i believe for a fundamental reason or two. iran is exporting 500,000 to 600,000 barrels per day. if it gets overturned or reversed, it goes up to a million. couple that with china slowing then you have the juxtapose

cutting down on drilling and cutting supply i like on carter's level of roughly 62 to 72 a barrel. >> we are tracking two movers in after hours. details next watch: serena williams... wonder woman.... serena... wonder woman... serena... ace.

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welcome back we are tracking shares of roku and qualcomm after hours >> qualcomm is down about 10% this year, was down about 20% from its january high but that stock is shooting higher in the afternoon hours feeding on a top and bottom q1 guidance and we know about shipments and supply constraints it. and matt ramsey argues leader in

communications chips he said it will benefit as they make transitions from 4g to 5g to 6g. ref knee diversification of the company, too autos. the most successful industry in the business 155g agreements and counting there are supply constraints expect material improvements to supply by the end of the year. tomorrow for squawk on the street, the ceo will join us with more. >> thanks, josh. guy, this is erasing the loss for the fast few months. how do you see the quarter >> we found the low.

it is a tremendous quarter what i am most encouraged by is the guide. when you look at the first quarter guide, you could make a case maybe they will earn $11 a share or so. i will back up qualcomm against anybody. if you like texas instruments, i think you have to like qualcomm. you get a close above $148 i think you take out a down trend we have been in for quite sometime >> karen, the line about material and supply chain by the end of the year seems to be very good news particularly in light that qualcomm had issues delivering materials to apple and that was an issue for apple. >> i looked to see if apple was up on the heels of that news it didn't seem to be then. although i think qualcomm cited

more android good for them. they also talked about diversifying and having more exposure to automobiles. i thought it was a good quarter. i thought the outlook was good in the new valuation world, it's not expensive. i don't own it, but i think the risk-reward is compelling. >> let's get to roku it is also on the move julia? >> melissa, roku shares plummeting on worse than expected quarter guidance. they fell short of expectations. this despeights earnings surpassed expectations but user growth, with that is

supply chain interruption. tvs with roku embedded they say whether it's auto manufacturers or consumer product companies, they have their own supply chain constraints and import constraints. some of those folks are starting to low down their marketing. and he said last year was an exceptional fourth quarter and there is starting to be a lot of advertising the stock was down about 10% earlier and now is down about 8% >> julia, thanks we have heard that before, if you don't have the goods, you

don't advertise if you don't have the inventory >> it is enough to look past i think the stock is suffering from its success on the charts that's a disappointing number. the company still is at a valuation that is difficult. year over year it's up 51% despite falling 36%. i think the comps are tough. i think the pull forward is tough. i think there is an incredible amount of competition. we are seeing those stocks get punished and during this earnings season. i don't think you need to chase this down. >> dan nathan was making the case on the show and on twitter. >> it makes perfect sense, the after hours and users and everything, all of the above

margins have increased and that's what julia was saying they did better on that side during the day, going into the close i hit 293 at support i am not looking where it's trading now but i'm assuming it's around that level i am with tim, i don't think you have to catch a falling night, but i think in a couple days you can get it wait a couple days i wouldn't be afraid to buy something like this. >> we are just getting started on "fast money." here is what is coming up next -- >> capri holdings. shares surging after posting strong earnings.

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some of the other names moving after hours etsy is down by a little more than 2%. capri is up 15%. they are seeing their best day since october of 2018 after better than expected results credit where credit is due

grasso is this emblematic overall or a capri specific story? >> this is a high end retail specific story most do valuation on capri -- it's not a mall stock. it's a high end luxury stock when you do that, you get hermes capri is only 40% high end luxury so you have to get a blended multiple that should be around 19 times that brings the stock, in my opinion to around $95. when i power pitched it back when it was trading at 17, that's where i thought it was going. if you put the same multiple,

$152 on the stock. i am staying in the name i trimmed on the way up but still holding a 30% position looking for that $152. >> karen >> i thought it was a good quarter. north america was good, europe was good asia wasn't, not surprisingly. that was the only weak spot. the whole premise is to create a luxury conglomerate and get a luxury multiple. they haven't gotten what luxury multiples get. versace was good jimmy chu is the weakest but not the snmallest of the three i am stayinglong i think that 19 -- i don't know

if it gets there ever, but there is room between here and there this was a very good quarter for them i think it will be a good quarter for other retailers as well but kudos to them. >> chu may be the smallest of the three, but it is guy's favorite brand >> the answer to that is yes, because i have very narrow feet. great call for you technicians out there, still in this down trend from february of 2014 when the stock was at the 98 level. but we have officially broken out. $1 billion stock buyback is not insignificant. i think the market cap for the company is less than $10 billion. good things happening. not a bad place to take profits. if you are an investor, you are

loving what you are seeing >> coming up -- some big banks cracking down on trading what is happening that has cannabis companies feeling it. zillow, an opportunity to get in on that. my mother passed away. after taking care of them, i knew that i really wanted to become a nurse. amazon helped me with training and tuition. today, i'm a medical assistant and i'm studying to become a registered nurse. in filipino: you'll always be in my heart. at t-mobile, we believe you shouldn't have to choose between the most 5g coverage and great value. so we unleashed the 5g experience on magenta max. with 4x more 5g coverage than verizon. and unlimited premium data. only at t-mobile.

what has been a bad month gets worse jp morgan telling its brokers, it will no longer allow them to buy and sell shares of some cannabis based companies tim, what does this do for the trade overall? has this impacted you at all >> look, i am in cannabis -- they haven't pulled back at all? >> cowen >> cowen i think they are holding a different line than j.p. morgan. i think they will be on the wrong side of history. if you listen to the attorney general, he is not going african

b -- after cannabis enforcement yet banks can't operate and people are carrying around bags of cash. this is a major problem. for investors you are investing in a sector before a wall of institutional capital can get in for the banks who have chosen to be here, it's profitable i can't speak as an enforcement official, but i can just tell you what is going on and that's not where the risks are. we are about to get into third quarter earnings yes, the third quarter numbers will show slowing over second quarter and there are concerns they can't hold that there is a billion dollar sector in less than five years and investors understand where you can get growth at a reasonable

price. it is trading at a significant discount to sectors that don't offer the growth on a day like today, some of the names in my portfolio went higher because they are canadian names or ancillary names that will likely see proxy play more. >> it's federally illegal even though it's legalized on a state by state basis that's one of the reasons tim mentions that wall of institutional money waiting to get in that legality is one reason we haven't seen the floodgates open to the sector. >> that's right. that's why the banking act is so important. it will eventually get passed, but there is just so much on the docket in capitol hill that it

has been stalled but once you see this pass, these companies can conduct business and operate like businesses when you look at a stock trending down, that's idiot si when you look at one that has a tremendous operate or, that's idiocy as well but all of these banks, to tim's point, are way behind the curve. it is almost like with bitcoin, but this is worse. once they have to do with 180 with safe banking, these stocks will be multiples higher than they are now >> coming up, a for sale sign on zillow why bidders are putting in bids for this stock we will dive straight into that trade when "fast money" returns.

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mark joins us. great to have you with us. you wrote in your downgrade note that you saw the i-buying business as a valuable option. i am wondering to the extent you saw zillow growing by x percent and strip out ibuying, what does it deserve given the ratchet down >> the int which is advertising for real estate professionals, we think it is 10 to 15% growth. should be some margin ex-pension so 15 to 20% over the next 20 years. 15 times high end, 20 times,

somewhere in there that's what we think the stock could be worth once we get through the disappointment there is a question mark about the effectiveness of management. >> thanks for coming on. when you look at this and the balance sheet and taking these big write downs and where the stock is now, do you think we will see a big buyback from them >> there is a lot of things they can do one of the things disappointing about this announcement was i didn't know what the back pfill plan was that was plan a. what is plan b i think there are more things for sellers, but we didn't hear that they are exiting a capital heavy

business, a business that requires a lot of cash in order to handle all of the home transactions you have to put a lot of money at risk. therefore, you should not immediately, but in the next year or two, start seeing share repurchases, yes >> this is tim if it goes higher -- the combined business is int i got the sense they didn't know how to assess the housing market over the next six to nine months people are concerned they don't know how to set the losses on the balance sheet from the ibuy businesses it seems to me the market has taken out the 2 to 250 or 300 million which is what i am reading a lot of the analyst community is do you think the market is doing more than that to the stock?

>> tim, this is a high margin business they are running at 40%. there are very few companies i look at, facebook, google, that run at markets like that it is a healthy business that runs a lot of cash flow. i would like to see them take down those margins you will not get credit in the market after this kind of fiasco for probably six or nine months. so make yourself a great '23 stock. then the market probably overreacted. financial valuations model, maybe 10% of the entire equity value, not more than 20. the stock probably got overbought at the beginning of this year, but to me it's probably in the oversold part.

i think you want to wait and see what the plan b is what will you do now to offer something to home sellers? >> mark, i'm curious because at one point you thought this was a good idea and how this was such a capital intensive business, et cetera, et cetera. housing is a difficult thing and holding inventory on your books is not a good thing for what should be an internet business as you look back, and all of us are monday mornings quarterbacks, but a lot of people missed it who are in the stock, but what do you think you overlooked >> the single biggest question i asked myself is there a market here or is this idiosyncratic to zillow my thought is the first. i have seen the ibuy market

increase in residential home sales. and i have seen those companies generate some decent profits if they were better able to manage two to three months out, home prices and not get over, the mistake i made would have been too much confidence in this marketing team which was to shift over to a transaction model. you have to know thousand price houses and quickly renovate them and get them back on the market. those are skills that this company didn't have. >> mark, are you confident in management to find other ways to grow this business beyond its core business given the missteps they made? >> there are diversification

steps within advertising this is a site that gets tons of traffic. zillow has great brand awareness. there is a lot that can be done to monetize. >> i check on it at least twice a day myself karen, walk me through your trade. >> you and i were speak early this morning i put my toe in and by midday my shin and by the end of the day knee high. i really like it i think it's fantastic if you had told me june 30 a stock that was 120 something, they are going to get rid of the business you hate, the asset heavy one, take a big charge to do it and you are going to be

able to buy the good business at $60 a share, i would have said that never is going to happen. but here we are. i have shown i am impatient, can't do the three-day rule. i did it with ulta it worked out. that's what happened here. how fantastic the margin is. this morning we were talking about steve iceman didn't like zillow for that reason he said i think it is a great business that other one. that is a buy. he said i could quote him on that >> there it is >> i like it and i am going to be buying it tomorrow. >> tim >> as i saw karen's toes floating down the stream, i started nibbling, too. i did it via options

i think i can measure my downside sometimes on a down day the volatility plays in your favor if you are buying on a qual spread i see the core business that mark talked about. it is low 50s to mid 50s, growing high single digits, low double-digits. it's a case where a lot of bad news, we have to get a little more clarity here, but i think this is a relief to a lot of investors. the stock has been torched like there is something more we don't know is my view on what weigh sue -- we saw today and recently. i think it's overdone. >> guy >> traded 15 million everything that happened was addressed at the phone conference

everybody knew this was going to happen the stock was 107 on october 27. i think for a bottom, this is as good as it gets. coming up, options traders ♪ ♪ ♪ ♪ ♪ ♪ ♪

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welcome back check out shares of uber it's uber's turn tomorrow and "options action" is betting big. mike >> in uber options we saw a trade more than 2 1/2 times average call volume. it was missed although calls outpaced puts 4 to 1 14,000 were traded including some purchases in blocks of 1,000 some trading at only 53 cents.

either way traders are betting on moves of 10% to botthh e upside and downside. >> thanks for that up next, final trade ♪♪ ♪♪

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welcome back the move on mgm, it extended its pop in the last half hour or so. so that's something to watch as the call goes on final trade. let's go around the horn >> tim seymour >> robinhood, i don't think their platform changes overnight, but i think an opportunity. >> karen >> i am going to be buying more zillow i think the valuation is fantastic here >> steve >> i can't believe karen didn't wait for the three rule row. i am going with capri.

today it should be trading at 95 i am sticking with that one. >> guy >> a tip to the guy in utah who says h 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 people want to make friends. i'm just trying to make people money. call me or tweet me. on a day when we shrugged off the fed's taper announcement, dow gaining 100 points