this point everything is very contingent, tomorrow the pce inflation number coming. so you got to see if that either confirms or refutes the idea of maybe peak inflation, see how the market absorbs that. >> keep our eye on volatility. vix, 27. bitcoin lower. >> that's interesting. >> we'll talk to you soon. mike santoli "fast" is now. right now on "fast." rally on the street. s&p up four of the last five days, dow with its best run in over two months. much of the move thanks to a retail revival and rehoping stocks how confident should investors be this consumer field comeback has legs plus, a mystery that one of our traders says could be a sign that maybe the social stocks are overreacting to snap's big warning this week. later, "fast money" forecasting the weather service predicting a rough hurricane season ahead up to 20 named storms and as many as six major hurricanes could this create a perfect storm for the energy complex in an already battered supply chain?

i'm melissa lee. this is "fast money" live from the nasdaq marketsite in the heart of times square. on the desk, tim seymour, karen finerman, guy adami and pete najarian, and we start off with retail rocketing higher. shares of dollar tree, macy's, dollar general gaining double digits after earnings report and all three raising outlooks for the year is the consumer really as strong as these comments suggest? initial jobless claims continue to trend upward with microsoft and paypal the latest to announce hiring slowdowns or job cuts and while demand may currently be strong consumers may be retrenching to fund purchases. savings as a percent of income fell to under 6% in q1 down from nearly 8% at the end of last year so if stashes of cash continue to dwindle, job security isn't so secure, will spending stay strong guy, what do you say. >> certain areas i think so. we learned today with dollar gen and dollar tree, some operators are doing extraordinarily well and others we saw from walmart

and target, not so much. i think those were one-off quarters for both of those i'm sure we'll talk about it in terms of these dollar store, absolutely i think this is the environment we've talked about that they do well in. the move in dollar tree over the last month and a half has been extraordinary from 175 down to 120 in pretty much a straight line now here we are back to the 165. i think that goes higher on valuation dollar gen sold off as well coming back. i think you can make a compelling case for it so i think those places are fine in the environment that i think we're finding ourselves in. >> i think it was really -- i just think we priced in so much and we had heard from the biggest and seemingly should have been the best in terms of managing inventory and managing the inflation cycle and didn't dollar gen had a gross margin contraction of 130 bips but said 12% to 14% growth. if you look at them overall and the xrt and look at the rally we've had you're up 14% in the xrt which isn't necessarily, you know, a great gauge of the

entire sector but i think it does have some sense of really where we've come, intraday lows of just tuesday. meanwhile the s&p and the nasdaq from the intraday lows of friday had a 6% rally and i think a lot of this rally is because of relief in the consumer and today i coined the triple rs where really rates, you had re-opening trade then had retail and that to me is what's working. i think stability in the treasury market, even if it's just for now is part of what's giving a lot of companies comfort. >> relief in the consumer but i think the question here is the consumer at this moment in time may seem fine but, karen, are you worried about the consumer in three months, in six months, in eight months. >> yes, i am but if i were macy's management, right, i don't know why i would guide -- >> higher. >> -- higher i must feel really confident that's what i read into them if i only felt like i have clarity for the next couple of weeks, i wouldn't guide higher

macy's management is not dumb. we have to think they're seeing more strength than we do and so they probably aren't as focused on the day-to-day valuation change which has been dramatic and so we've had these single digit multiples, m midsingle digit multiples and the beat has met with a huge stock run so i'm optimistic that we were sort of the death of the consumer is overdone >> you know what is so fascinating, think back, long, long time ago, when walmart and target reported. like within a couple of weeks ago, right think how terrible things looked the panic over the consumer. the inventory builds, pete, and now it's like we're celebrating. it's like everything is coming up roses which camp are you in here >> i think quite honestly that they didn't pass along what they could have passed along. i was about to say should have i didn't mean that but could have passed along to us.

target, for instance, i think you saw a couple of different things going on in that report one of which was, okay, the customers we're shifting, what they were buying and that type of thing, that was certainly part of it but i also -- weren't really passing on what they were seeing and we didn't know about it until earnings but when you're talking about all of the trucking and gas issues that they were dealing with, that wasn't getting passed along. when you're looking at some other names, i think the interesting thing when you look at the dollar store, for instance, those should be the names i think that should be working in this -- and they certainly are. i think it's really impressive but i think if you're looking further out and, karen, you're saying the macy's management should know better and i agree but i don't know that they do and i think that might be part of the problem i think people are going to feel this more and more and more because i am still very bullish on crude crude stays up here or goes any higher and suddenly we have to pay even more at the pump than we're paying right now, i think the consumer will really be

strapped then and then, you know, the combination of that and jobs and everything else, i think that that part is, you know, i'm not trying to be doom and gloom but i do think that's a possibility and i think we've got to be prepared for that so i don't know how much the consumer really has or how much they want to be on in terms of debt on those credit cards which is starting to rise >> yeah, you know, macy's talked about the return to office driving sales. this he talked about occasion -- how many pairs of chinos are you going to buy in anticipation of going back to the office how many macy's dresses are you going to buy to go to that wedding? only so -- i'm asking this not directly to you, tim. >> that's a great pick for a wedding. >> but it almost feels like this type of spending which is great for now, it's not durable spending >> no, i think but part of what we also heard from these companies including, guy, dollar gen is early second quarter read, so they're talking about an environment where pete's right to point out the spending

power erosion going on with the consumer and i agree with him. i do think that at times, though, in the midst of all this, we're forgetting just how strong the consumer comes into this, so we talk about jobs. how about wages? many cases they're outstripping the pace of inflation on top of the pent-up dynamic. i guess i feel like even -- i'll call myself guilty on this too you have a dynamic where i know how bad the macro is and i think it's getting worse and the rate involvement and revolving debt but great to hear from companies like macy's who goelman coined them i think a bright spot among retailers and if you think about whether it's karen's calls or guy's dollar gen or my macy's or nordstrom's or a handful of other names these retailers are trading in single digit p/es there are companies that are also looking at these stocks but companies >> that's the other dynamic to

in that we're seeing in retail if you got a market that's troubled, a market where there's a lot of volatility where are you going to put money if you're going to deploy, the places where the p./e.s are not stripped it's not a question mark p/e for apple offer whatever it is. >> in between what chinos are, i looked pete would agree. target in my opinion was a one-off as was walmart give them both the benefit of the doubt going forward and at the valuation you find target in right now i think that's a stock that you can get your arms around in terms of answering valuation. i think that's what people are going towards. i agree with pete and i know tim does as well, energy in my opinion will continue to grind higher zero covid in china will end at some point, a tail wind for energy and gas prices will g higher like it or not and that will be a head wind but who wins, walmart, target and i think these dollar stores we talked about. >> 23 1/2 by the way forward

p./e steve liesman, how strong is the consumer is there any concern that inflation is going to be an issue and that wage inflation won't keep up with inflation >> sure there's concern. i think that the market may have gotten a little bit overly spooked by the walmart/target report and a bunch of economists stepped up and said, wait a second it's not add bad as all that some softening is expected but one of them i quoted said, you know, the death of the consumer has been greatly exaggerated something -- a phrase you played with earlier, melissa. i mean, the good and bad side. waning fiscal support, that's definitely an issue. wages in general or sorry, specifically have not kept pace with inflation on an average basis. you have a negative wealth effect and do have those savings rates coming down but there's a whole other side to the story which is ridiculously high

savings rate i believe i brought a chart to show you household liquid assets and they are running at least by the end of 2021, we'll get new figures next month, there it is. see that blue line sticking up there. that's above the trend that's $4 trillion above the trend. now, some of that may have been worked out but there is a boatload of savings out there with which to continue spending. the other thing and it's a little hard to explain, but let me see if i can, the total wages paid to workers is running -- the increase is running higher than inflation, i'll explain that in that we brought in some 2 million plus workers into the workforce, they were not being paid before. now they're being paid so the total wage is up 12%. so i don't ever talk about stocks but i am interested in a couple of things you guys bid up amazon all the way to the surface fear and now it's come down to where it was before so it strikes me that that may be overdone there.

i think amazon is going to walk away with at least something of a better market share than it had. walmart, same thing so i don't know i think what you have margin compression because margins have been ridiculously high, the output end, earnings side but still have a decent consumer at least for several months unless the economy does indeed take a downturn and start to contract then you'll have layoffs. >> the tail wagging the dog, though, because everything is fine right now i mean, amazon, let's take the amazon example since you were going to come on to the show and offer your stock picks, steve, amazon is dealing with a -- >> not a stock -- >> no, no, i'm poking fun at you. >> sure. >> fuel costs. >> you should. >> interfering with margins, at some point all of this weighs on companies to the point where they start retrenching and we heard that, for instance, there is a story about sequoia capital sending out -- having a zoom call with all of their founders in their portfolio companies saying, you know what, do the exercise now, do the exercise now because you may have to do

it within the next 30 days be ready forthat and we're hearing it anecdotally but it's adding up. >> look, i mean, here's the deal weather forecasters forecast rain we know it's going to rain we know there will be softening. we know, for example, the good sellers benefited from people being at home and not spending money on services. there's going to be some softening, so the question is, the market seems to go back and forth between saying, you know, it's going to be a hurricane or it's a hurricane right now to, oh, maybe just a line of thunderstorms coming through and i think that that is probably more like what's going to happen here is that, first of all, you have this shift from goods to services and that's going to be a big thing. you have people who are, you know, going out on trips and doing things, concerts and restaurants, they didn't do it before that's taking money away from the goods producers and the trouble is the market thought the pandemic era spending would be around forever so they bid up peloton all the way until what happened there

>> steve, it's karen let me get back to what seems to be the central question for me about the markets which is what do you think is going to happen to inflation and where do you think the fed needs to get before they put on the brakes? >> well, i'm a little more pessimistic on this. i think the fed may have to go a percentage point, may have to go to 3 1/2, may have to go to 4 before they put the brakes on. but, look, it's not quite a day-to-day thick, but it's a month-to-month thing and the fed needs to get a lot of help i can't tell you and i think that's the most honest i can be what is going to happen. what's going to happen with ukraine. i think najarian said if this russia thing goes on for longer that is an accurate comment there. that will really hurt the consumer those are things that -- and the china lockdown, those are three things i'm watching very squarefully. the other element, of course, is wages working through to inflation so the fed will need a lot of help here if it's not going to go to 4 i think 3 is where the market is priced

i'm afraid there may be another percentage point in there if the fed doesn't get any help >> steve, thank you. always great to speak with you steve liesman. >> see you guys later. the devil is in the detail or in that extra one percentage point, guy, because that could make a big difference in terms of where the market should be. >> i agree with that where they're not getting help, them being the federal reserve is in the form of energy prices, which pete brought up, tim brought up, 100% to bring it up. they're resilient as can be. crude oil had every opportunity to break down a week and a half, two weeks ago when it was flirting with $93. it didn't do it. now we find ourselves north of 110 again and i think there's another high here especially just one more time if and when china does release the zero covid thing, that head wind is going to become an extraordinary tailwind energy play is intact. that's what the fed is up against. not winning that battle at all. >> and costco shares lower despite reporting a beat,

revenue earnings of 304 a share. courtney has the latest from the conference call. >> the conference call is just ongoing. cfo on vacation in italy being run by the evp, bob nelson and so far he has talked through comparable sales saying they've grown 15% for the full company if you strip out fx and gas which, of course, is a pretty important metric with the gas and inflation the sales growth is shy of 11% for the total company. united states was the strongest division digital sales in total up 7.4% store traffic up, average transaction up too and more than the ticket best performing categories, actually a lot of them, candy, sundries, tires, home furbishing and apparel and underperforming categories included liquor, office, sporting goods and hardware membership fee revenue up about 9% with all-time high renewal rates and costco is not making any announcements about increasing the membership fee today ahead of the typical

timing bob nelson said particularly as consumers grapple with higher levels of inflation it last raised it in june of 2017. it typically raises it every five to six years so no new news on that today, melissa >> courtney, thank you courtney reagan. it may seem like a piece of trivia that the cfo is in italy but seems strange. >> very nice this time of year >> that you want to make sure you are in town are the costco earnings release i digress. karen, what did you make of the quarter? >> what do you make of every quarter. costco is so good at executing their business the only reason that it's down is that it's really expensive and more expensive than any retailer as it deserves to be because they're so good at execution. if you own the stock this is in no way a reason to panic or get out. still executing -- i wish i owned it i don't. always been too expensive and that's a mistake >> all-time high that's like an annuity. >> it is

it's absolutely amazing and just continue to do it. quarter after quarter and we already -- they do give you monthly numbers. one of the advantages you have over costco but when you look at these numbers i think they all look great did they blow us away? probably not and that was what we were probably expecting and that's why i also would say, why we saw the day that we had before we got to the closing bell and then got the earnings, i think people are looking for more i was looking for more i actually bought some calls late in the day looking for a little bit more. i thought the stock would maybe deliver more than they did they need the millennials and gen-xers, who they're going after and i'm surprised they haven't raised membership rates another time i would expect it because i think they have all the pricing power in the world to get more and more folks to pay up and they're going to continue to have these record numbers, i think. >> coming up, done deal. broad come inking one of the largest tech deals of all time will there be more action in space? details ahead.

homing in on biotech as details trickle in from the american society of oncology association and digging into the headlines when "fast money" returns. 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

(all): all hail, caesar! pssst julius! you should really check in with your team on ringcentral. oh hi caesar. we were just talking about you. yeah, you should probably get out of here. ♪ ringcentral ♪ at xfinity, we're constantly innovating. and we're working 24/7 to connect you yeah, you should probably get out of here. to more of what you love. we're bringing you the nation's largest gig speed network.

available to more homes than anyone else. and with xfi complete, get 10x faster upload speeds. tech upgrades for your changing wifi needs. and advanced security at home and on the go to block millions of threats. only from us... xfinity. welcome back to "fast money.

getting headlines out of this year's american society of clinical oncology conference meg tirrell has the details. hi, meg. >> a couple movers as this world's largest cancer research conference drops thousands of data sets on cancer research ahead of the conference which starts next friday two up, two down to point your attention to pmv pharmaceuticals is the first one up more than 20% a rather small cap company, $600 million before the move today. this was an early stage study and multiple different kinds of tumors it does seem to be pleasing folks with the results in the after-hours. another one similarly is adicet bio. up 26% there also on a very early stage study, both of these companies are going to have updated data at the conference but moving positively in the after-hours. flip side we have meradi

that appearing to disappoint folks down 15% the results did look good comparable to amgen's but might not last as long for mirati. down quite a bit in after-hours, almost 50%, a drug they have for melanoma ma and looks like the durability of response for the drug has been less for iovance so we'll keep watching and let you know anything that comes of it more data coming next week but that's the early read. >> meg, thank you. me meg tirrell. i don't know if you've ever looked at any of these tickers. >> news to me. she breaks news. those names i have not heard she mentioned amgen. report on april 27th and i know pete feels this way, valuation,

you've been able to make a great case for amgen for years and very quietly off the earnings release a stock within a whisper of its all-time high and i think can continue to go higher. when you look at names along the lines that meg talked about, seemingly extraordinarily binary, amgen is anything but and get your arms in terms of valuation. >> a tough market for some of the smaller names with only promising things in the pipeline it's been even a tough market for the big cap biotech name, tim. >> it's been really tough. talk about when you're trading the biotech etfs and look at the ibb, top players amgen is 9% of that etf and have to be careful what the impact was of moderna and some of the heaviness there maybe creates an opportunity for owning it. some of the asco comments around marc and keytruda, this is one of these stories that i think continues to give the tailwind

that has this company breaking out really over a five-year levels of resistance but why it trades at a premium to some of its peers. >> we are just getting started on "fast money." here's what's coming up next it's a deal. big action in the tech space as m & a heats up what else is up for sale and which names could be ready to buy the details next plus, china tech takes off the etf soaring as top players report is the group worth the buy the traders are breaking it down next you're watching "fast money" live from the nasdaq marketsite 'rba res square. wee ckight after this.

welcome back to "fast money. broadcom and vmware jumping as they make their deal official. it would give broadcom more exposure to the cloud. our next guests says it faces significant regulatory changes great to have you with us. what are the barriers? >> so just taking a step back, you know, this is obviously a transformative deal for broadcom, largest ever, $70 billion, and it will really jetson their software business to a new level, right? when all said and done half their business will be software if this closes so they talked about 2023 time line from a closure standpoint the thing to keep in mind here is that a lot of the vmware partners when you look at vmware, it's very neutral as part of the infrastructure so they're partnered with amd and intel, they're partnered with invidia so when you think about

that you've got vmware partnered with broadcom potential competitors that could certainly create conflicts of interest when you think about time to closure. >> so why do you think broadcom wants to do this if there are potential conflicts which would feasibly eliminate some of the business that vmware has i would assume that, you know, a competitor doesn't want to do business with broadcom >> so taking a step back, broadcom's historical framework has been very consistent whether it's on the semiconductor side or software side they acquire franchise assets, assets that can scale up their business where there is a ton of synergy potential by my math 15% plus they'll take vmware margins from the 30s up to corporate over time which could get into the mid-60s significantly accretive so these challenges i'm talking about are not unsolvable i'm sure they've clearly thought

about this as it relates to risks to closure, you can certainly, you know, think about putting up arms with respect to the ability for each business to talk to each other, et cetera, and putting up barriers that can satisfy the doj or ftc whoever ends up taking the case so the deal without risks, they've certainly thought about the risks. it's incredibly accretive which is why the stock rallied. >> obviously this is what they do but the fact this they have the confidence to try to pull something like this off in this environment, i think that has to be pretty encouraging for the entire space >> yeah, that's such a great point. let's take a step back we've had $70 billion of software transactions year to date from an m&a standpoint. deal activity is higher and larger relative to 2021. putting them in the mix now will effectively double the m&a

that's occurred year to date and software has derated significantly as we can all appreciate the historical multiple on software is about eight times if you look at the igv, the software etf. during covid we peaked at about 15, 16 times, we're now below where software assets have traded and you've got many assets trading between, you know, in some cases lower than three to four times revenue and i'm sure you've heard the orlando bravo interview the other day, this is the environment for private equity to continue to consolidate the industry so there's a ton of opportunities ahead. >> jared, great to see you thank you. have you seen they sort of unusual activity in the software space, pete? >> you know, not really so much, mel. one thing that stands out, a couple of years ago, what a great idea that was and execution they did it at the timing that they did it which was ibm with red hat sort of a similar deal exposing themselves that much more to the

software world, something that's worked well for them as a matter of fact, it's interesting year to date if you look at ibm versus apple, ibm versus a lot of the major names we talk about each and every night and apple, ibm used to be one of the big laggards but it's been outperforming in a big way and i think a lot of that has to do with what they've been able to do over time and how red hat has become a big piece the biggest problem i see right now for broadcom will be can this get done and i'm not so convinced that it will, but, you know, obviously we will wait and see but i still think this is going to be a huge hurdle to get over, mel, for them to get this deal done. i don't think this is the environment for that kind of a deal to happen right now >> guy, when you made that great point about what -- >> you heard that, right did you hear him say that? >> i think you'll put it on tape because you want to preserve the fact that somebody thought you made a point that was good but anyway, you meant that it was a good read for the semiconductor industry or software -- >> both. for technology in general which

has come under extraordinary pressure since obviously the summer but more specifically since november and the fact that broadcom is looking past this, again, my opinion, i think that speaks volumes i sort of couched it by saying this is what broadcom does so i get that but the fact that there's still potential deals going on is an encouraging sign. >> a look at shares of trade desk the stock growling after the company reaffirmed guidance on revenue and ebitda it may have alleviated some concerns raised by snap. that company along with facebook and pinterest also rallying. karen, what specifically gets you a little more optimistic about it >> trade desk is in the center of all social media advertising and so we saw that just bombshell from snap last week, and they had reported april 21st and then last week came out with that, and so you would think that trade desk would also be seeing what snap was seeing but

they reaffirmed. that was good. i was wondering why. i think it was their annual meeting and felt like they needed to address it so that gives me a little comfort that maybe this wasn't, well, maybe it was somewhat specific to snap but maybe a reaction it was somewhat overdone. >> more specific to snap, i think. again, they're telling you about cpm declines andstarting to se pricing head winds and that could be a function of many different things, but i just think for the ad market to have been destroyed overnight is something we haven't seen yet. >> coming up we're all over the after-hours action in gap and ulta after reporting china tech taking off. surging more than 7% has the group found a bottom we're diving into that next when "fast money" returns dad, we got this. we got this. we got this.

we got this. we got this. yay! we got this. we got this! life is for living. we got this! let's partner for all of it. edward jones

self-driving cars. let's partner for all of it. our power grid. water treatment plants. hospital systems. they're all connected to the internet... and vladimir putin or a terrorist could cause them all to self-destruct...

a cyber 9-11 that would destroy our country. i'm dan o'dowd and i wrote the software that keeps our air defenses secure. i approved this message because i need your vote for u.s. senate to send a message... congress needs to fix this. check out the china internet seven weeks, seven weeks, big difference the move coming on the back of earnings beats baidu saw strong growth.

both posting their best days since march 16th notably, though, baba didn't provide guidance. >> they gave quarter numbers, 30 billion up 9% and better than some people expected they gave insight into april, so the quarters that that we're in now and that's it and said they're seeing about a down 1% in term of sales and something that is actually probably a relief but they are citing all of the economic uncertainty at home to say there's just no way we can give guidance and the question really is if you're an investor in alibaba and number of shares in the kweb whether you care about it or the pressure on these companies coming from big brother. if you think about the valuation destruction in alibaba it was well before we saw lockdown 2.0 or 3.0 or whatever

i'm starting to get more constructive on the reality check that takes time in terms of china they have to let alibaba their message was received loud and clear and think the hubris that existed within that week two years ago has been completely dismantled and i think they're doing what they need to do domestically. >> even if there is a coast clear on the crackdown the delisting fears are still there and, of course, the china lockdown impact on the economy is still there, karen. >> yes, although the latter you could think of transitory used to be a word, right, for the covid shutdown but on the former, do you ever get an all clear? do you ever get -- >> no. >> you don't it's just the clouds lift and so for me, i'm done. >> all right, meantime, one of these names is seeing a major uptick and traders are betting today's big gains are just the start of a bigger rally. mike khouw has the action. mike >> so we're taking a look at

alibaba which traded 2 1/2 times its average daily volumes option, the sixth most traded today. a lot was in the calls we saw short data june 3rd weekly, 100 strike calls trading over 12,500. buyers are betting that they rally that we saw today could continue through the end of next week >> pete, did you see this action and do you believe that it's a start of a bigger rally? >> i'm not so sure about that bigger rally part. i'll answer that one first and did see the option activity today as well. yeah, it's been really, mel. you know what, the desk was talking about this, the delisting process is a huge issue for me i'd rather be in the options though than the stocks because at least i've got less risk out on the table and i've been saying that for a long time. we just don't know, right? i mean there's so many issues that go into this whole thing about trying to go through this. if you just looked at baba and

got rid of the name itself and just took a look and said, look at this balance sheet, what do you think? everybody including the entire desk and i think so many people would say, you know what, i'm going to buy that stock. hook at the cash flow. the free cash flow is over $110 billion. they've got all these other attributes that look fantastic but the problem is we just don't know what they're going to do with this and what we'd have to do with this so i'll stick to the options and the option activity in the etfs from china have been very, very active of late for sure. to the bullish side. >> mike, thank you for more options action tune in to the full show friday 5:30 eastern time. we've got more retail earnings coming your way shares of gap and ulta the impact this year's hurricane season could have on the energy trade and the stocks where you can seek shelter from the storm. "fast mone iba itwy"s ckn o. thinkorswim® by td ameritrade

is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back. flexshares etfs are built with advanced modeling. to fill portfolio gaps and target specific goals. strengthening client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

[ dramatic music ] [ engine revs ] for a prospectus containing this information. [ roars ] [ roars ] welcome back to "fast money" tracking more earnings in the retail space starting with gap the stock plunging after reporting a loss of 44 cents a share. for more let's get to courtney

reagan court. >> hi there, melissa the focus is on the outlook. gap's guiding for an adjusted earnings of 30 to 60 cents consensus for 1.4. the company saying 90 to $1 per share of sort of this pressure is what gap estimates it's going to cost to correct the issues at old navy and account for the weakness in the lower end consumer and that's why it's so far off from the analysts' estimates. total separable sales fell more than expected. 14%. old navy slightly worse than expected and they warned about it a couple weeks ago. gap brand way worse than expected banana republic, huge surprise to the upside. i spoke with sonia single and their cfo katrina and single told me, the low income consumer is starting to be really affected by inflation and the macro situation pressures and certainly we have that consumer in old navy in particular. she went on to say that changes

preferences, the shift from active, fleece, baby and active to more occasion and back to work styles hit them hard and o'connell told me inventory levels which were up 34% were significantly higher than we had hoped. nearly half of that is from longer transit times, she said gap is planning to spend about $350 million in incremental air freight this year and commodity pressure will be another 350 to $400 million drag on annual profit >> was return to office a big factor for banana? >> you know what, i think it had to be. they're still on the call going through some of those details and just starting the question and answer now but it seems to reason that would make sense to me that's what we heard from macy's enand from nordstrom in their more urban stores they saw that return to work customer as they were seeing people literally returning to work around those surroundings stores. >> all right, court, stay put. we'll get back to you in just a minute tim, what did you make of the

quarter? >> well, first of all the inventory mismanagement is something that really seemed almost laughable and unfortunately they mismanaged it with a lack of demand so it's a case where at least if you look at some of the other folks that have reported so far, you know, this seems to stand out. if you look at some of the core brands it's nice to see banana outperformed it. some of the core brands didn't and if you look at the multiple it's not an expensive company here but, again, it's just hard to feel like they have carved out, at let ka and some of the things, if active is pulling back, that's a concern for them because that's been a big growth airy. >> 9 1/4 is a 5-week low i'll say this, what's today, thursday, tuesday that jwn reported and play the game we like >> there's so many. >> the would you rather game. >> oh, yes. >> you threw that alt me without hesitation i said had tass to be nordstrom for the half a billion buyback they announced which is not insignificant to them. where gap seems to have messed

it up on the inventory front maybe nordstrom sort of got it right. maybe this quarter out of gap in some weird way can help nordstrom continue to go to the 28 level that i think it's going to get to. >> ulta after the bell shares are jumping after a huge beat on top and bottom lines guidance coming in better than expected courtney reagan, back to you with more out of the report. >> i am back, melissa. so comparable sales for ulta up 18%. all major categories exceeded expectations, makeup sales above prepandemic levels it's a faster recovery than ulta said it expected the higher end prestige categories did outperform the mass cosmetics in-person beauty services grew double digit and consumers continue to be highly engaged with the beauty category as they participated in more in-person activities and lean into experiential spending and while macro economic pressures are top of mind for consumers, the resilience and

emotional connection to beauty continues to drive the recovery in the category. ulta is raising its sales guidance based on the first quarter result and trends so far in the current quarter, shares higher by more than 6 1/2%. >> thank you, courtney i didn't know there was an emotional attachment to cosmetics but, karen, you're in this name. >> this is just an extraordinary quarter. i mean, just the strength of the beat on every line that matters, the revenue, the gross margin, i mean, and the guidance, this is again another one where i wonder why did they have to lift that guidance so much, right? 4% revenue gain at the midpoint. higher margins a lot of positivity there. to your point, you got to wonder, wow, is it everybody coming out and want to get dressed up -- >> how many lipsticks are you going to own >> they must feel good about their business i like the story this is a drag move as it should be these numbers are extraordinary. >> karen wants sandbagging.

>> why not >> exactly exactly. >> how about things are not so bad? pete, why not take the free pass we don't know what's going to happen i mean there could be pull forward in terms of spending, again, how many lipsticks do you need how many pairs of chinos >> you're going back to work everybody is going back to work and look at the comp sales at 18%, they're extraordinary this was a read-through i'm kicking myself right now, mel, because of the fact that when target did actually give their results, this was a strength area beauty, so unfortunately, i didn't put it together i kick myself for that but these guys absolutely knocked it out of the park people are definitely going back to makeup and all the rest because of the fact we all know the direction. we are going back to work. we see it every day and i think that this speaks for it. i think they don't need to sandbag. it'll be great. >> you mentioned too sephora and kohl's was strong. >> yes, yes, what about the rest of kohl's?

not so good. >> right, right. coming up, a crude awaken, a dig into kohl's. why not. a crude awakening of energy season the details when "fast money" returns. kely to invest in companies that have social and environmental goals. ♪ ♪ there are so many more young investors coming in and participating in the financial marketplaces today, and that's really due to advancements in technology. there's a proliferation of innovative technology solutions to be able to interact and invest in the financial markets. younger investors today are engaging in social media in ways that we've never seen in the past. they're in forums, actively engaging with their peers on certain topics and certain investment ideas. 75% of them believe that their investment decisions can influence climate change, and 90% of them want sustainable investing options in their 401(k).

they believe that they can really impact with their investment dollars more so than prior generations. i'm naeema huq abrar, and we are morgan stanley.

when it comes to cybersecurity, the biggest threats don't always strike the biggest targets. prior generations. so help safeguard your small business with comcast business securityedge™ it's advanced security that continuously scans for threats and helps protect every connected device. the choice is clear. get unbeatable business solutions from the most innovative company. so you can be ready for what's next. get started with a great deal on internet and voice for just $49.99 a month for 24 months with a 2 -year price guarantee. call today.

welcome back natural gas and oil prices soaring this year and our next guest says the upcoming hurricane season could create the perfect storm to push prices even higher. let's welcome the ceo and co-founder of weather trends international. bill, great to have you with us. so far this looks like it could be one of the most active hurricane seasons on record. it's still early, so, so how accurate are forecasts at this point? >> they're going to be really accurate because of the climate cycles we're in are a statistical lock la nina, cold water, no wind shear in the atlantic. that means we had 21 systems last year, 30 the year before. so there's the top two years we're projecting 20 so that puts it top four. so it's a guarantee you're going to have a lot. the question is exactly where. >> and the devil is in the detail to use the phrase once again in the show. where they make landfill in terms of what will be affected but interesting for weather trends, take the weather but you

also sort of play out what the impact will be what are you seeing in terms of the impact >> so, again, we do think there's 0 storms and you see the graphic and try to point where we think they'll occur the science allows you to do it in theory. atlantic is the warmest in 30 or 50 year, hot we have a lot of energy for hurricanes, the pacific is very cold that means no wind shear in the atlantic we have a lot of systems but you could line up all these other climate cycles to say what happened in the past 2012 is a year we're in right now. we know what happened in 2012. it got hit by sandy, only a cat 1 but that's big for the northeast. we know these similar years where they hit and that's how we're able to project texas, maybe florida, even the northeast mid-atlantic here as high-risk areas so you can quantify it and what it will mean for business. natural gas refining if it hits in those gulfport areas, new orleans and louisiana and texas where everything is produced, obviously that would be the perfect storm. you know, to have that hit in

those areas, which, again, happened the last couple of years, louisiana hit many, many times here in the last two years. >> right so energy prices go higher consumers go and board up their windows and buy generators, good for home depots and lowe's and you think macy's, retail in general, if it's terrible weather outside people aren't shopping >> it's not good hurricanes are bad for overall retail they're great for home supplies. home depot will tell you we love to have a major hurricane threat but miss you buy all the supplies but didn't do damage to their storms sandy, we were down with power for three weeks. do the math. that was for kohl's, 23% of their stores are down without power for three weeks, right do the math on lost sales. the threat is always good. you know, it's more than just generators, mousetraps, people don't realize, there is a huge spike of mousetrap sales because you have a damaged home and line the kitchen with mousetraps so there's a 200% increase because of a hurricane

it's crazy what you find in the analytics. >> you learn something new every day. you just stumped all of our traders. bill, thank you. great to have you. >> happy to help >> bill kirk who knew makes sense, right >> guy, how many mice run through your house >> i will tell you we're out of time, i know, but one of my favorite games as a youth was the game mousetrap if you recall you set the whole thing up and then, wham, the whole thing comes cracking down on the mouse. >> now we have no time to trade. final trades are next.

one day you might realize going to grandma's doesn't count as vacation. when you decide to go to that amusement... -no. -no. when you decide to go to hawaii. aloha. turns out your beach people. i think we're beach people. whoa whoa, slow down boys. we know you love it. and did you know they like ceviche?? and best of all, the hotel has babysitters. so you have a date night. remember those? with amex, it's never a question of if vacation will actually feel like vacation. it's when. ♪♪

we are still thinking about mousetraps time for the final trade pete >> i'm going to give you cisco i saw call activity today and already own it i bought some calls. >> tim >> seen an enormous bounce in retail the biggest amazon who underperformed the bounce and 2000 is a nice level of support. >> karen >> we talk about the three-day rule that applies to the upside as well, ulta, fantastic numbers but i wouldn't rush out to buy it tomorrow. wait three days. >> guy. >> we talk a lot about range a pivotal game five which game

fives typically are. i think the rangers emerge victorious, come back to madison square garden. >> amgen, sister. >> i think tim would agree. >> absolutely. >> thanks for watching "fast money. a cnbc special "inflatio thanks for watching "fast money. "inflation usa" starts right now. tonight on cnbc, an economy besieged in a river of turmoil and main street is fighting back from kitchen table concerns to the ceo moving mountains master this market with a down home dive from the quad cities you can't afford to miss "inflation usa" starts right now. >> welcome to this cnbc special. jim cramer is off