even though the consumer budget is being constrained this is an opportunity. when consumers find their budgets are constrained they do the staycation and go to theme park >> does it for us in overtime. fast is now. >> overlooking new york city's times square, this is fast money. ahead on fast stocks finish the major averages all down over a percent. oil surging again with wti back to nearly 115 a barrel, the ten-year yield the highest since

2019 some stocks have done better trade it or fade it. and later cannabis combo, two multibillion deals in the cannabis market. weed wednesday here on fast money. we start off with troubling signs in the housing market. new home sales dropped last month. the disappointing data comes on the back of spiking mortgage rate the average now at 4.72% and median home prices up 11%. does pressure on affordability mean the end of the housing trade? >> the fed won't tell you to their face but they target the wealth effect and asset based. the asset bubble is certainly as much about housing as the market look at home depot down 3% and

trading near the lows after a bounce all of the housing stocks. we have started to see this really six months ago and it kicked in to overdrive this is a day we saw the ten-year spike to levels we have not seen in three years there is a sense that the ten-year is going to fluctuate if we think the fed will move too quickly it could price in more recessionary dynamics houses are not affordable in the country now. they are not going to be more affordable when you have a mortgage rate over 5%, and that will be painful. >> the stock market is still all right for now at least >> yeah. they absolutely do but the higher rates go, the

more difficult it will be. he mentioned home depot. stock is down 25%. 305 is an interesting level. but in terms of the kbh numbers, missed on the top and bottom line not good go. i think kbh has more room. a ten basis point move in the bond market over the course of the day. think how crazy that is. if the market, in my opinion which is on a next leg lower, you will see quality in the form of bond yields will notch yields lower furthering the yield surve which continues to flatten out

>> the entire complex is for sale i agree with guy i think you will be looking at a recession. people don't buy homes in a recession. no >> is that the assumption, that you stick a fork in it stick a fork in the housing trade because a recession is on the way. if there is an economic slow down can you say the whole sector is a sale there is a line of thinking where if they stay in place people will fix up their homes >> if they can take out a home equity >> is that the crux of it? >> that is fine. i don't think lowe's or home depot would be the way i would

play it. housing affordability is out of reach. they are expert operators. no the entire complex is aren't gone i want to be at the upper echelon and that is how i would play it. totally on the same page with home depot and lowe's. if you are being squeezed from energy, commodities and now in terms of housing and credit tightening at some point the shoe has to drop and i think that all of the panelists are saying keep an eye on itted and let's make an estimated guess in terms of strength of the kple i think names like kbh, maybe you play the contrarian view

operating in the rental space, i still think there is room for cash flow there. >> we got an earnings alert here reported results after the bell here diana. >> melissa, a miss on the top and the bottom line the ceo said in the release while we grew revenues as the quarter progressed supply chain issues intensified. it extended our build times and planned deliveries and added they would work on navigating through the challenges s the average price of a kb home rose over 22%. median prices were up 10% year over year.

builders seem to think they have pricing hour 8% rise ininventory. suggesting make the homebuilders are over building. who would have thought that when we talked about the supply >> over building thank you. diana mentioned a litany of reasons why the housing trade is a difficult one. labor, rising mortgage rates. this is one way the consumer is getting pitched. auto financing by the way. auto financing once upon a time always 0%.

now it is more than 2% you are paying more for a car in every way. >> kelenna: you are paying more for everything in every way. that is a great point. we talked about the hyg. you have to continue to watch what it does over the next couple of weeks. contrarian trade he is spot on with this one in terms of kbh this time two years ago the stock traded at $15. recent high of $52 33.5 for a lot of reasons makes sense. we are probably going to see it tomorrow if you are looking for trading opportunities, a lot has been taken out of the name. you might want to get against the 33.5 level >> kbh you look at the outlook here, 27%. i think they would be heroes to get there. lumber futures

they are back up 25% there is no sign it is going to alleviate. order backlog 29% you tack an extra 100 basis points of a mortgage on top and it is significant. homebuilders have been lagging the last six months. the eps does not look bad. i am not chasing that trade. >> you have to go a long way back but it is around here and you could pick it up >> to extend what you are saying, how about trades like nike, retailers. are we going to see difficulty

>> i think a name like nike, adidas i prefer to rotate that in to something lower cost price point. dollar tree. dollar general they had challenges. things like that hold up a little bit better in terms of elasticity of demand nike has decent exposure in china and europe i do not see a lot of catalysts that make me want to jump in kbh is a name i own. i don't think the backdrop sets up well. you have to trade for the market in two ways and if you want to step in and establish position there are points and times to do

that >> from housing to semiconductors i think the market felt it today. >> the next guest warns housing is creating a tough situation for the fed. michael, great to have you with us is the fed watching mortgage rates? effectively spike, the rise we have seen has been affidavit nom cal and you sent our producer an ad financing is now 2.49%, a lot more for the consumer used to 0% financing. does the fed look at it and think it will be a strain on the economy. >> the fed is looking at hoe many indicators. you have mortgage rates, ukraine, garden variety sinner flation and the reopening from the pandemic

i think from the fed's perspective, the fed and for all of us in the market. it is what is needed tough to find a single path forward. >> we were talking about the r-word, recession. 50% chance of recession in late 2023 why the lag. is 50% for tu a high number? >> the idea of a soft landing would be really challenging. you think of the complication of the russian invasion and the surge of commodity prices makes difficult for the fed to calibrate. unemployment low how can the fed figure out how to tlapd the --

>> you know, your work is tremendous back half of 2023. it is interesting. i think the market is pricing in rate cuts around that time can you speak to that? >> sure. that is really interesting market pricing and rate cuts from the end of 2023, 24, 25 the old idea the -- in the last cycle, the last hike was december 2018. few weeks later the chairman powell walked it back and then six weeks later the fed was cutting again. the same idea. market is pricing a lot of it.

>> michael, you are seeing at high as 2.75% of the ten year and then you see rates going down you can give us the backdrop if the fed is talking about multiple mu multiple rate hikes. >> with the fed cutting say towards the end of 2023. yields go up a decent amount ten-year rate goes up to high two or low threes and comes down after that market is not prepared for that. >> is less demand in housing and in other parts of the economy

good news? for the fed it has significant impact what the do you think of that? >> when you answer why the fed tig tightens so far it only did the one 125 point hike as we see a reduction in housing or other areas, that is is the fed's goal the speed and the magnitude is another question as far as a direction, that is how the fed wants it to go >> mike, you say the chance of recession rises every day. if the fed front loads the rate hikes, does it rise by a smaller increment? is there a way for the fed to avert that outcome

>> there not a great path. as far as going big and early. 50 in may. 50 pretty soon would that help? might cut the upside risk in inflation. nobody including the fed has seen inflation like this a shooting war that is a lot to pull together throwing in a 50 or two change the calculation? i think it doesn't >> michael, thank you so much for joining us >> all right so, it is different. >> my reasoning for the fed to take the foot off of the gas i can play both sides of it it

the next downturn they are going to need ammo there is nothing to cut. they are going to need to bolster that to create the cutting possibility. >> the box we always talk about. the fed created a box for itself and it is trapped. rrpd we. they have to give themselves room >> so maybe the eternal optimist will ask this question once again. i say that sarcastically isn't it possible rates go higher as the fed is really doings it darnedest to fight inflation, and that is a good thing for the markets. >> you can make that argument. i know you are being facetious,

another word i am unable to spell. the optimists will say for the first time since paul they are trying to get in something they should have been in front of three and a half years ago there is no shot they thread the needle to zero and if jerome powell were smart and wants to get in the good graces like me he should show up with timb timberlake >> nikola says commercial truck production starting this week. they are actually producing trucks >> that is great i think there has been so many misdirections, head fakes in

terms of the headlines here. i know we have been disappointed you know, we could have dropped foreign gem into the last. why wouldn't i grabbing -- >> crude prices jumping and that is fuelling gains in another area of the market and today markets two years since the pandemic lows in the market. some of the biggest movers since then

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>> crude oil up more than 5% today. prices moving to $115 a barrel rising energy prices fuelling the transport and resource trade. take a look at one-month gains in rail trades it keeps chugging along. >> yeah. unp is a name that i think

continues to see higher margins. if you look at the rails and see these are businesses that through the worst of the covid dynamic became better businesses that is when companies get better if you look at the margin profile of the two companies they continue to go higher higher prices will be a demand in this dynamic but for now the rails have a sweet spot. energy prices, as we talked about, are not going down soon at an industry conference this week, they sold upside calls on the oil heads. they think oil prices are going a lot higher they have expansions online but not until 2026 i think we are going to see commodity prices moving higher >> if i am picking between the

two, agree with rails. too volatile geopolitical risk is too much of a driver i prefer csx because of the debt load >> i thought he played by the rules but apparently he doesn't. >> i think that is cool. go for it. >> only one person on the show that calls for would you rather. >> that's guy. >> yeah. >> i do like the rails think about the efficiencies they have mastered the rails win. resource trade, we have not run that far alcoa today made a 15-year high trading north of $95 we have not seen that since the spring of 2007

oah. back on the horse. easily trades north of 300 the energy trade is far from being over in my opinion >> i agree with that i don't think it is over it does feel like a crescendo. i know we are moving out of the winter at the least. the news headlines coming out are not getting any better >> there are other places. >> we are going in to peak demand season. u.s. drivers use 10% of the world's auto demand. >> germany i think the rest of the european countries getting their natural gas from russia was a big catalyst to the upside

this is not about heating. this is not about driving, it is about heating. >> oil halfway back up into the new price spike. i think we will spend a lot of time north of $125 no spare capacity. russia was a big part of the opec plus and some of that flexibility is gone. >> someone that believes crude will be 65 to 85 on the year end. i was on the low side. markets overshoot in both directions >> you think we are going to be $65 by year end. >> yeah. a lot of green >> all right we got it on tape. we are just getting started on fast money >> two years ago stocks hit rock

bottom a lot changed since then, as your portfolio and the charts you have to see you are watching "fast money." we are back after this ♪ ♪ imagine a community where millions share ideas and trade stocks, crypto and beyond. to the moon? in other words... etoro.the power of social investing. do you think any of us will look back in our lives, and regret the things we didn't buy? (camera shutters) or the places we didn't go. ♪ ♪

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>> welcome back to "fast money." markets taking a breather after a strong seven-day run with financials and health care leading the losses the biggest drop in nearly two weeks. the end of the mini-rally.

is that awhat we are in for >> yeah. essentially with the whole ukraine/russia thing, there was perceived positive catalyst. would they have peace talks or strike a deal not being involved in nato. china said -- i think the fed overshadows all of that. >> we with laura, mary daley seems like the camp, the 50 basis point camp is getting fuller and fuller. >> thank goodness. i believe they are saying things

to try to condition the market and it doesn't want to believe them i think we are in a earning cycle. against valuations that matter and in an environment the fed is rightly hiking i think the market will feel pain in the short-term to the medium term. >> i am going to say the market rallied last week as they hiked and also gave you a lot of ammunition i think we are all in the tactical camp of markets trading lower. but they have told you what they are going to do and i think they have been successful right now i don't like the long-term track record >> today marks two years since the pandemic bottom.

the biggest winner, tesla, up over than a thousand percent it is not the only name. do you stick with the big winners? we will find out with a game of trade it or fade it. moderna up 535% since the pandemic bottom. trade it or fade it? >> yeah. it is down 75% since last fall this is a trading call specifically the first time in a while compelling case for moderna. i like moderna it bounced off of 117. it has got another 25 to 30% from here. >> i am going to say the opposite that is the way that we play the

game >> the audience knows i am not going to say trade it. >> go ahead. >> this has been in a declining line since august of 2021. we are not breaking out of that declining trend line weapon the vaccine off of the front page and russia, fade it, not a trade it >> i don't what tim is going to say. >> the first one you don't know. >> trade it or fade it >> trade it. two weeks ago, i was definitely going to trade it the stock has bounced nicely one of the things to be excited about with axp, their focus on the small and medium sized business and having them integrate their payments and banking and i think they will grow higher. i think the high end spend is

still alive. >> what do you say. >> fade it fade it. listen, i think it is correlated to the overall economy i think credit crunches make it tough for that consumer. outside of that, i think it is a technical play for me. this went from 145 to 150 back to 190 where it closed today and i don't think there is a lot of upside >> amazon, up 77% in the last two years. tim. >> trade trade. it had to be a trade amazon, one of the great winners

of covid they were there for us the stock actually pulled forward a lot of demand. e-commerce trends are in amazon's favor and the stock under performed with the exception of the last three weeks. i am trading this one. >> guy >> yeah. i am with tim. are you kidding. i wanted to get steve. couple weeks ago they announced a stock split and we said the stock has room this is a tactical call. back half of the year i think amazon can go higher we have gone up $500 i think they can back end fill to a 2950 level. >> next up, another big stay at home docusign. >> can i have the power to mute his mic.

>> i am going to say trade >> yes it has been hammered the valuation was inconceivable. pre-pandemic, we traded down to the level. this is a better stock and company than back then trade it >> i feel good about that one. >> trade it or fade it >> trade it, mel >> i will also say that aside from the technical backdrop it is cheaper across the board and cheaper by about half is the peg ratio. what are you paying. what was the catalyst, momentum behind it in the first place now you are paying 50cents on the dollar for it. >> this game is not rigged or choreographed. coming up.

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>> welcome back to "fast money." that's right we have a chart of the day brought to you by tim. what is is the chart >> love me some charts as the yield curve flattened and looked to cross the financial space guess the number one weighted stock, berkshire hathaway the man that we love to love, warren buffet and mr. middle america, one of the best if not the best long-term investor has been out performing the s&p dramatically since the fed racheted up their inflation chart it out performed s&p by 30%

some of it is excellent exposure and the insurers and the folks passing on a lot of the prices very well to your consumer staples that have pricing power. i know, you'd know, it is not an easy valuation berkshire hathaway makes you wonder what the financials would be doing without it. >> is it a conglomerate for our time >> you know, it is interesting great song by nielsen. >> without you >> without berkshire hathaway and i am going to go to blackstone i will tell you major double bottom, about to break through a down tend line blackstone over berkshire. >> there is a would you rather

>> on his own. >> i didn't say that i didn't say that. >> you didn't say it but implied it >> i think he said it. would i rather, guy. >> blackstone. >> all right >> chaos here. >> coming up, marijuana merger we are rolling into the cannabis trade. more on the big deal next and we will plug you into the options one option trader is making a big bet on ts hione. details when "fast money" returns. inwith the new schwab starter kit™. new investors can open an account and get $50 to split across the top five stocks in the s&p 500®. you can also unlock short videos, step-by-step guides, and other easy-to-use tools designed for people just getting started.

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leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire >> welcome back to "fast money." a major merger in the marijuana industry cresco labs and columbia charlie, great to have you with us >> good to it be with you

melissa. >> this gives you an enormous retail presence to the wholesale presence you have. talk to me about margins retail margins are better. how will the margins improve in an industry seeing margin compression across the board >> the industry is experiencing price compression. but there are ways to manage it. on the wholesale side of the business, why we have the brand portfolio structure, a good, better, best structure and meet consumers where they want to be met and allows us to create the products and keep it durable and that is where the integrated nature of having retail and your own products really helps to protect your margins if you are growing and producing and selling it on your shelves great defendable margins

>> talk about the timing of the deal in a time people have been ex expecting it to get bigger this makes you the largest multistate operator in the country. talk about timing and being an industry leader. >> i think you hit it on the head this is the time where you need to make the move allowing you to become the leader in the cannabis space this puts us there from the perspective of revenue and creates a footprint to allowing access for today and tomorrow. we have growth in the footprint. with us and our branded product fort polio and retail, now we can expand our access to our brand on our own shelves and really continue to drive growth and establish the leadership with our number one set of brands and the largest retail

footprint outside the state of florida protects margins and allows us to pursue a leadership position at a critical time >> charlie i was going to ask you about the federal reform you look at all of the stocks in the group. they all look the same way they were decimated. congrats on this deal. when do you think the federal lifeline comes and what type of a whiplash will it be when you can conduct banking like every other corporation in america >> it is a great question. reasonable to say it is more likely than not, more than a coin flip we are on the path to federal reform in the near future optimistic it could happen in 2022, after primaries, midterms. the conversations are happening in the offices they need to

happen in. our goal and what we think our objective in our obligation as leaders of the organization is to put the pieces in place for us to establish the leadership position now, keep our heads down, execute the business when the inflection point does come, it is is the most significant dynamic catalyst >> are you experiencing a lot of inflation, whether it be labor or other things? are you passing on price increases to consumers >> if anything we are taking the t obligation to manage prices need to come down for consumers. that will be the biggest driver over to the regulated market we are seeing inflation pressure primarily where is in the consumer's wallet. it is on us to make sure we are

able to create and pass on savings to the consumer base >> sounds like further pressure on margins >> further pressure on operations and the strategy of the business to protect margins and being able to produce an affordable product for consumers. >> charlie great to see you. >> thank you >> tim, you like the deal? >> i like the deal i am long in the stock long in it personally. now they have eight states they operate and have more than 100 million in revenues. in other words they have a footprint that is very well balanced and the wholesale business means this is a business everyone talks about. this is the type of insulation around margins the industry, i don't think it is the federal argument. it is the margin argument that pushed cannabis stocks down. that is the part where there has been a reset

i don't think investors should be investing for the day you get the federal headline you should be investing in companies that grow their top line and the addressable market will still be growing. >> the interesting point charlie made is the notion of migrating the consumer to the legal market and there you have to keep margins down in order to compete because consumers have to pay taxes. >> this is the duality of making the perception of cannabis in the country. it should be federally legalized. it means the illegal market can run rampant. >> coming up, electric options option traders are kicking the tires. asw they are playing the game ne "ft money" back in two

♪♪ making friends again, billy? i like to keep my enemies close. guys, excuse me. i didn't quite get that. i'm hard of hearing. ♪♪ oh hey, don't forget about the tense music too. would you say tense? i'd say suspenseful. aren't they the same thing? can we move on guys, please? alexa, turn on the subtitles. and dim the lights. ok, dimming the lights.

>> welcome back to "fast money." ev maker nio reporting tomorrow.

tony >> yeah melissa. with report of earnings tomorrow nio traded actively today, 1.3 times the average daily volume, and the options are implying a sizeable 10.3% move. this is the historical average we have seen over the last eight quarters of 6.3% and one unusual trade where 1,000 contracts of the april 26 strangle was purchased for a net debit of $1.51. betting the direction can have a big move to the upside or to the down side, as much as 25% by the april expiration betting we are going to see big moves on nio tomorrow. >> guy, if memory serves nio is

in your dawn trade >> right now it hasn't been any good i will tell you this they don't pay you at halftime i have a fun i feeling nio is going to get off the mat i am in the 25% higher camp, melissa. >>llig a rht tony, thank you. tune in to the full show friday. up next, final trades. ♪♪ ♪♪

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should we have another one? talk to us about retirement today. feel comfortable about tomorrow. massmutual.

cnbc healthy returns is coming up. go to cnbcevents.com to register time for the final trade let's go around the horn >> i want to be exposed to housing. the operators or someone with access to them >> guy >> yeah. my final trade is psx. but arnie winkler, 15-year fan of "fast money" passed away. his family laid him to rest. watching right now condolences to the winkler

family >> tim >> tes, paid $325 million to remove the upside on oil and will probably be doing buy-backs. >>