cloud spending >> the market took earnings season as an excuse to sell and not to buy we're sort of looking at the possibility for downside guidance retailers ultimately righted themselves, but that was pretty ro rocky along the way. >> the stock is up nearly 7% thank you. that's mike santoli with his last word. i will see you back here on this desk tomorrow. "fast money's" now right now, intense volatility in the energy market. wti rising to $120 a barrel then reports from opec. the crude realities for energiened impact on the markets. plus, shares of netflix rising nearly 20% since cratering early this month we'll play a little trade it or fade it and some of the other stocks that may be flowers out there. later, bio tech blues. the sector slumping today. is this the right time to bet on bio tech or are these stocks

still too sick for your money? this is f"fast money. we start off with that late day sell off in oil prices crude hitting its highest level since march 9th before pulling back around 2:00 p.m even with that, oil was up nearly 10% in may. its sixth straight month of gains. crude's longest winning streak since 2011 is there any relief in sight for n energy prices? what will it mean for the markets? >> i think there's some relief for energy prices, but i think you have a dynamic where there's little spare capacity. the question was around russia, whether they would be allowed to participate and the opec plus dynamic. good for oil prices. if you wanted higher prices, the fact that opec, opec plus over the last three years has had their you know what together and the ability to control production i think in an environment without russia, saudi has swung

uae some there's a question about how much swing capacity. for markets, it was a may where the s&p actually eked out a small gain despite incredible volatility in the month. three days down 3% and energy was up 10%. i think what markets really want to see is what we're starting to see in other parts of the commodity complex. in the softs and ags, we've had wheat and corn down aggressively today and over the last month. that's the dynamic that's what equities want to see. of course that puts more pressure on the fed on some level when the equity market gets going, it's very circular >> karen, you're saying the beginning of may, if you had left and then came back today, not much -- >> nothing happened. ten-year moved i don't know, nine basis points. market moved less than 1% and oh my god in the middle though, you could have made and lost a ton of money probably a few tons if you had been playing it right. the market's so reactionary

right now. we get the tiniest bit of data and blow it up that's what we do here that's our show. >> we like to. >> i think to tim's point, maybe we are seeing as commodities roll over, maybe that's peak inflation is behind us and we know the fed has been very aggressive so one could make a case that the, we know the fed's aggressive so that's priced in. and if that is successful in bringing inflation down, then maybe there's a softish kind of landing and that's i guess the bright spot for the market so that's possible anything's possible though and it's interesting that the markets are just so jumpy that we extrapolate anything a lot. >> yeah. to tim's point though, it's sort of glass half full half empty when it comes to the markets we're celebrating the fact that the markets looked like they had found some footing we're sort of flat on the month

for may. but in the end, you really do need to see market pullback to believe what the fed is doing is working. that is going to be one of the by-products of this battle against inflation. that's going to be some pullback in the markets >> i mean, ultimately, you know what the fed is trying to achieve is stretching and we can debate to what degree that varies that's ultimately the goal there. i mean, inflation, employment, those things are clearly top of mind, but if you read through, and this is my attempt to read through the tea leaves, that's what they're trying to accomplish that's going to come through housing market or through risk assets and so i think when you start to see that pullback, i think there was some read through probably from those that are more constructive than myself okay, what the fed is intending on doing is working so the likely head of the meeting to ratchet up additional measures

is likely lower. this bounce back kind of puts us in a bit of no man's land. is it working? is it not? is this rally really sustainable or is this just us taking a breath before we have a leg lower? is vix being in the mid 20s, that range has been where we are. that 25, 26 reading that i think we closed at today kind of tells you i don't think people really know whether to make heads or tails of it. you know, i think we're likely headed lower, but i think this pause is good so that you know, these oversold, high short interest type of names can get a breather and people can kind of make heads or tails of how they want to go forward >> what to you do, grasso, in this no man's land you're mr. recession so you believe the worst is yet to come what happens between now and then and what should you do with your fportfolio? >> i think the market can rally. this is what i said on friday. i think we need to go up another

200 handles and confuse every market participate that's playing in the market right now. having said that, to pick up where tim left off, we've seen wheat. we've seen lumber. we've seen corn all trade back down, right? so now just think about it lumber went from 14.50, 14.77 to be exact so 6.50 what does that mean for oil? that means that oil is trading off of one thing and one thing only ukraine, russia. we also have the midterm elections coming up which means that president biden will have to figure out some way to kick oil to the curb. oil's going lower. commodities are going lower. market's probably going higher and then it's going to back up again. i would think that i'm still sticking with my 3800 as the line in the sand for the market to prove itself. that's my barometer for the s&p. >> it's crazy though the s&p, you're right. we've done 8.5% on the s&p from

those intraday lows the previous friday and this isn't making the fed's job any easier right now by the way, you talk about elections, steve, also, you had powell at the white house today. you had biden trying to distance himself from as much inflation going out of his way to saying our fed is independent i have nothing to do with this unlike his predecessor it was just a very interesting day in terms of the theatre around inflation and politics and ultimately you know, what again, i think the markets want to see risk assets will rally if we feel we're at peak inflation we have a payroll number on friday that's going to show year-over-year wage growth of 5.5% which is going to tell you that if anything, the worst part of inflation hasn't really fed in, i don't think, into the system yet i think it's going to be tough to get rid of that >> the op-ed in the wall street that president biden penned, first, the fed has the primary role of controlling inflation. if only it were that easy that powell could wave his hand

because ultimately, the sanctions on russian oil, even if there were a cease fire tomorrow, what do you think the likelihood of those barrels coming back on to the market, being accepted by the u.s. and eu, does that happen probably not so then how do we interpret that in terms of the consumer because what we're seeing now, it's a shock to the consumer, but imagine this shock going on for months >> and how, i mean, well, if it goes on for months, i think then we go into a recession that stagflation scenario is really terrible. that's one we want to avoid. but i think that we are seeing a lot of pressure on housing prices so that's one thing that's coming down i think the oil, but oil i don't think is coming down anytime soon because we do seem to be in this longer term, we want to produce more oil and that takes time and so until -- >> china's reopening, too. >> and china that's big >> pmi numbers out of china. shanghai's reopening that is not helping the oil

construct in terms of demand >> so the global economy may look better in some sense because china's no longer shutdown, but the flip side is that energy prices, commodity prices will go higher because demand is coming back online >> certainly i really couldn't have said it any better i think looking towards the positive side of the coin, china reopening should help inflationary pressures we're seeing from the supply side but i don't expect that to be positively affected in terms of demand for commodity or goods generally speaking so it's really going to be where those two kind of find equilibrium and that will lead us to more clarity on the path forward. >> we've talked a lot about earnings estimates and how they may not have come down enough to reflect some of these macro uncertainties. we had some downgrades today revisions lower on internet names from jeffries. so steve, i'm wondering if you think this is sort of, i don't want to say the beginning

because there are other analysts who have been at this, but we're getting more and more indications that wall street's coming to grips with what's going on out there >> unfortunately, wall street, we're all kind of late to the dance. either you have an idea on the premise, you stick with it, but a lot of times by the time we get to a consensus, we're all wrong. so and i don't want to be, you know, too negative on the group, but that's usually where it is when everyone's moving to the same side of the boat. i will tell you that most people are still buying dips. most people are still thinking about when is tech going to resurrect again. and how long can i ride energy out. so i think until that way of thinking stops, you're going to have a market that probably has these sucker rallies where we rally another hundred, 200 handles, everyone gets their head chopped off then we're back down to the bear market. >> more on the markets with wall

street's biggest bear. mike wilson, you're getting more company day after day. do you think we're in the middle of a bear market rally we could actually see 5% higher here 3900 is your end target. what does it look like from now to the end of the year >> thanks, melissa good to see you all. the crowd is moving in the right direction and that is i would say a necessary condition, but not sufficient what i mean by that is you know, the market is forward thinking so valuations have come down in anticipation of two things the fed hiking then of course earnings revisions to the downside i think you know, our bearish call this year, people agreed with the fed part of it. but we're really pretty adamantly opposed to earnings risk i'd say the biggest change in the last six weeks is that more clients are coming in, earnings have to come down. this is the cat and mouse game multiples will lead again.

so i'm very much in the camp that that rally will fade, 4200, maybe 4300 if tit can go a coupe of more weeks, but fair value is about 3800 that means to get upside, i've got to see a trade below that. then we would get aggressive at that level to be adding to risk. but here, the risk reward is poor it's worse than it was two weeks ago after this rally >> it's karen. thanks so much for being on. when you talk about earnings will fade, dupg tho you think s the high flier ones versus the value ones have more risk or are we seeing with that big move down, is there an equal amount of risk? >> i think it's interesting almost name by name. it's not value versus growth or tech versus banks or anything like that. look, we overearned during the pandemic companies benefitted from the

stimulus and having lower costs. so i think we have an overearning issue kind of across the entire market abnd we need t see numbers come down. where is it most acute consumer discretionary technology it has nothing to do with valuations it's just that technology companies were probably one of the biggest beneficiaries of work from home so that's where the earnings risk is probably the greatest, but it's pretty board. >> semis are up 6% last month so if anything, some of the most cyclical stuff has had a decent rally, but i'd like to ask you about just the retail factor and flows and some part of your job is at least to understand where positioning is we had 80 billion coming through retail investors in the last few months the same as the 80 billion that came in the previous month as awful as it's felt, we haven't seen it. that's bearish to me we haven't seen reversal of some of these flows

>> i agree we've been writing about this quite a bit with our colleagues suggesting what you said which is effectively, you know, that asset manager community, the active traders, they've derisked quite a bit, but the asset owner community including retail and you know, individuals, that can be, has not sold yet let's not forget they put in over a trillion dollars in '21 so absolutely we think we will see that group fade and distribute stock and take some profits and hunker down a bit when the numbers come down that has, that will, that's the part i think people will be fooled on because sentiment is bearish. but we haven't seen the negative flows yet from the asset owner community. >> how should we think about valuations a lot of people out there, they will cite a benchmark s&p forward pe ratio of what, 16 something like the historic. should we think about that as being a benchmark in that maybe

we swung too far to the upside when times were good and we should be expecting a swing to the downside on the other side >> always tricky we have a framework that tries to incorporate both rates and equity risk premium because then you can say which side of this is out of whack. rates have gone up a lot this year they're sort of fair 275, 285, given what the fed's going, where the economy is. where we think stocks are most expensive is equity risk premium. we're at 285 our fair value sort of market multiple would imply 350 on equity risk which would take your multiple down below 16 times. i would argue quite frankly if given the risk in geopolitics, should closer to 400 that would be 14, 14.5 times, which is basically the overshoot

we need to get to 34, 3500 we're pretty disciplined in that i'm not going to lie to anyone, pretend we have precision on it, but that's the framework that tells us the risk reward >> mike, great to see you. thank you. >> thank you >> mike wilson of morgan stanley. that means a haircut for a lot of stocks. even the ones you think are defensive. not many are 14 right now, forward. >> no. aside from the builders. i think there's macro economic risk there we said it a few times the panelists have mentioned, you've had guests mention that the home builders are trading in low singing digits i think there are pockets. i mentioned pfizer last week that's trading down 9.5 or 10. i think there are names, it's not a name by name basis, where you are below that long-term average type of forward multiple, but yes, generally

speaking, i think that we're just going to come down. both in terms of further compression. he's mentioning perhaps 14 or 15 times then in terms of the actual earnings. so yeah. i think low single digits, mid single digits. i think you're relatively safe there, but i think there's probably downside risk across the board. >> how do you process that, karen, in terms of your holdings of meta, alphabet? all of them are trading above 14 i think meta is close to 16 forward. >> so just doing the math roughly, 15 and three quarters if we're 285 plus the 350 risk premium that gets me to about 15 and three quarters i just think, you know, some companies aren't going to be there. on average, they will, but i think companies with the kind of mote that they have and the business they have with the margins they have and the cash if you back out the cash, they're in fact, cheaper probably alphabet, not meta,

yes. so for all that, i'm hangingon to them. >> i think you're getting opportunities to trade the megacap techs and i think that's what you should be doing here. look at amazon, up 20% in five days we have the stock split dynamic, i think, but again, a company that relative to itself not crazy expensive. that's the problem big problem is i need to see apple at 125 >> coming up, salesforce is jumping after reporting results. plus, political showers bring stock flowers. we're digging into the names that bloomed into the month of may. the details ahead. "fast money's" back in two what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers

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mar mixed guidance for eps guidance light for q2 but above estimates for full year. they missed estimates slightly, but investors seem to be getting brace for the dollar impact. big question, interest rate pressure a period of resistance at 3% has slowed downturn for salesforce and other cloud stocks 48% off of its high. jpmorgan calling it too cheap to ignore benioff will be on "mad money" tonight. >> is this too cheap to ignore, grasso >> so when i look at the chart, i look at the prepandemic levels and pandemic low this one stopped on a dime right at the 50% retracement i think most technicians are giving it the benefit of the doubt, but when you look at the

competitors, it has not performed on a stock basis anywhere close to the rest of the space with some exceptions i wouldn't be here just yet. but technically, i think you can get a further bounce >> i have the privilege of hosting that "fast money" halftime report today and speaking to the investment committee there and a couple of those members said that salesforce was starting to look very interesting that would be joe and stephanie link what do you think? >> six times price to sales, 34 times forward pe those are relatively compelling. i just don't think we should necessarily be comparing where it is now versus where it was during the covid pull forward there, the demand there. and then if you notice, even though 2023 eps was guided higher, there was some look through where they guided lower in the next couple of sequential quarters i'm discounting everything a year out i think if walmart, target, snap gave you any indication, i think some of these corporate execs

have a hard time telling you what's going the happen in the next three to six months i think there's a situation where sentiment had got bearish, but i'm knot really in the practice of trying to pick lows on things so i would like to see continuation before i got involved if i try to pick the low and catch it on the way down in order for me to get upside appreciation, those are just going to be trades that i'm willing to miss. >> grasso, you're waving your hand either you have a comment or you're trying to get the attention of a waiter. >> yes, it's actually both i had a comment for the waiter just want to clarify i'm not looking at the pull forward on the covid high. i'm looking at the february level or january level pre covid selloff. and the covid selloff. so that's what i'm looking at for the retracement. i'm not talking about those you know, doubling of prices on the covid pull forward just as a, just to clarify what i was saying

>> in terms of -- i hear you, steve. in terms of the charts though, salesforce has underperformed this rally talked about it like the poster child for what the market was selling off. meanwhile, they've grown almost 20%, 24% in constant currency over, since 2016 what they're telling you though is that the enterprise strength is still there and so, this is also a company that i think you know, they told you last month they're starting to slow hiring. ease travel expenses playing the right game this is a great company. a company that's not cheap and certainly in the market we're in, not cheap. but i think you get opportunities to trade these and i think this one can go higher >> are you short igb >> i am. and this is part of it >> we're just getting started here on "fast money. here's what's coming up next >> flower power. april showers in the market brought may flowers for a

handful of stocks so is it time to take root in these names or will they be a shtlorn in the sd of your portfolio? plus, amd shares surging this month, but can the climb continue we're plunging into the options pits next to find out. you're watching "fast money" live from the nasdaq market site in times square. 'rba rhtft ts. wee ckig aerhi bonnie boon i'm calling you out. everybody be cool, alright? with ringcentral we can pull bonnie up on phone, message, or video, all in the same app. oh... hey bonnie, i didn't see you there. ♪ ringcentral ♪ another crazy day? of course—you're, i d a cio in 2022.here. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want —your team, ours or a mix of both. with the nation's largest ip network. from the most innovative company.

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when hurting feet make you want to stop, it's dr. scholl's time. our custom fit orthotics use foot mapping technology to give you personalized support, for all-day pain relief. find your relief in store or online. welcome back the s&p managing to eke out a gain in may. just the second month of the year it's been up, but a few names were able to far outperform fedex up 13% for the month it's best monthly gain since october of 1980.

jpmorgan and netflix also rising will these stocks be able to continue these runs? it's time for america's favorite game trade it or fade it. all right, so first up, jpmorgan it is up nearly 11% in may i will go to karen i'm sure the suspense is just racking. trade it or fade it? >> i'm going to trade it which, you know, is obvious because jamie and what not but i don't look at it as how much it's up in may. i look at how badly it did going into that. to me, the earnings release is really important we come back to valuation. at 11 and change times earnings, banks always trade lower than the market multiple. but a 3% yield, i'd like that call i think we could see higher net interest margin even priced in for all those reasons, i'm long. >> steve, i know you're a big fan of jamie dimon, maybe for other reasons, but what would you do with the stock? trade it or fade it? >> i do like jamie dimon i would be a fader of this

stock. i should say back to january, it's made a series of lower lows, lower highs. you could make the case that in if last couple of days, it actually broke out of that downward trend line but if i think we're going to recession, less loan demand, less activity for banks. wouldn't be consistent if i was a trader of jpmorgan if i think the economy is going to have less growth going forward. so i'm a fader >> on to netflix up 4% in may bonawyn? >> i'm fading this one i realize this is probably the cheapest you've had the opportunity to buy this stock arguably ever. 17 times forward and two and a half, three times price to sales. i just don't see a compelling reason technically below 50, below 20, a day moving averages are to put money to work and catch this falling knife their new ad model is coming in.

a declining ad type of spin situation. i just don't see the reason to deploy capital and in fact, i may regret that. >> tim >> i regret buying it after the first downgrade. so i'm in it for half of this, this hickey. there's a shareholder meeting this week. i think we're going to get more insight into the plan. it's not time for a massive overhaul it is time to figure out subs. the ad model we want to hear more about it, but this is a company whose growth was not supposed to be linear. it clearly is not. >> fedex up 13% in may. steve, trade it or fade it >> it's going to be consistent with my jpmorgan analysis, too this one has not broken out of a declining trend line so i think you're going to see lower prices even with the pop that you've most recently stated and for me, i would think that you want to be a seller of transports if you think the economy is going to be fading >> and if you're mr. recession.

>> yeah. all things follow from that. karen, what do you say >> i'm starting to see a pattern are grasso and me. i'm long so that makes me a trade it by definition i think you know, we have a pretty low multiple here as we've had for some time, but fedex has had fits and starts where they seem to be getting their act together and i'm optimistic they'll continue to do so and i think the environment is not bad for them as we reopened and they do more business deliveries. they have pricing power. they are in somewhat of a, on olo ologopoly. >> the tan relief. >> i didn't say trade it or fade it on the first one. i'm going to fade this one i'm not a big believer in solar's ability to hold the line much in the way i think the energy space is. i don't need to own this

there's a couple of names in this etf sun run is one where they have a margin increase, but i'm not chasing solar here >> bonawyn >> i'm fading this one as well this is something i'm more constructive on long-term in terms of a thematic play, but the arverage forward pe is aroun 33, 35 times that's just not the type of name i want to be in. that's the average there are names that are 70s approaching triple digits. i just don't think that's the type of space i want to be deploying capital in >> could we have official review on something something just happened. >> i just reviewed a tape. we put up a trade, but he meant fade it. longer term believer, but right now. it's not your fault. >> get the call right. >> technology. >> just force it on me force it on me i own it >> coming up, fintech fight. top players in the space clawing back from a rough first half of

the year details ahead. but first, a semi surge. amd ripping hire we're taking a look into the options pits "fast money's" back right after this insights illuminate better choices. allowing us to see differently and do more.

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check out amd dipping into the red, but closing out may more than 19% higher this month's best performing chip stock in the s&p. mike has the action. mike >> amd typically one of the busier single stock options we see. it was the fourth busiest. we saw calls outpacing puts and the busiest were the 105 strike calls that expire at the end of this week. we saw those trade for about 1.70 apiece. that includes retail and constitutional flow. some included blocks of as much 3,000 contracts. buyers of those calls are betting that the bump we saw today actually could continue and we'll see the stock at least 5% higher by the end of the

week >> what do you think, tim? >> if you look at that chart, you could almost still draw a down trend line that you need to get through 110. this is a stock that on next year's numbers, we're talking about 22 times that relative to its peer group has better growth. a stock that i think in this environment, i don't think i need to chase, but there's, the kind of a rally in the stock we've seen in other semis is the kind we could get life in. >> yeah, i mean, i also see some, i see that same down trend line that $100 level has been short-term resistance and it's starting to breakthrough there a short-term 5% pop seems to be continuing to play the trend >> mike, thank you for more options action, tune into the full show friday, 5:30 p.m. eastern time. coming up, a couple of beaten down finteches have been trying to stage a comeback, but it is not a case of a rising tide the names you should be watching, next plus, our biotech breakdown.

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and oligopoly and. call it a tale of two fintech stocks sofi surging since may while coinbase has lost value. kate rooney has more on the winners and losers >> fintech not having a great year, but there were a couple of outperformers in may sofi was the big winner. robinhood eked out about a 2% gain in may. doesn't sound like much, but it's a lot better than some others coinbase, block, paypal, affirm, all ending the month negative. affirm this morning looked like it was headed for a gain, not the case though. it did see a loss in may and is down more than 71% jmp securities is among the wall street firms doing somebargain

hunting in the sector. top of the list, root followed by robinhood they call it a good starting point for value. companies with more cash tend to be in better position to go on offense with spending or m&a they also ranked the most attractive valuations based on earnings projections calling out names like curo, lending tree and rocket while shares are still in the red year-to-date. finally, short interest. upstart, lemonade, sofi topping that list. if sentiment changes, the shorts may have to run to cover their positions which jmp says could poor fuel on a rally back to you. >> thank you i like the earnings growth metric, steve grasso, because do we know -- >> what earnings growth? >> we were just talking about what earnings estimates should

be particularly for a space like this that includes the likes of mortgage lenders >> yeah. 100% specifically with sofi, all of these companies have been painted with the same brush. if you're a growth company, you don't have any earnings or if your cost of capital is going to increase, but you know what's interesting, if you look at paypal, it's down 55% year-to-date that's one with deep pockets so it's almost as if they don't like the space as a whole and not just where you are on the market cap scale, but i would still be a buyer of sofi just on a technical basis. this thing is way, way oversold still. >> to me, sofi, it's come in a lot for sure, but i still think that that disconnect between old line banks that make money and get a very low pe and you know,

a new bank or a sofi or lots of others, have just a wildly different set of metrics that ultimately, i don't understand how that discrepancy can maintain that kind of giant chasm. >> so the old time banks are cheap? or these are expensive >> i think both. >> i agree sofi has three things going against it i think probably a well-run company. i think the dynamics are it's still a consumer credit company on some level to me. it's a high multiple stock and a high multiple blood bath and it was a spac and if you think about what went on, there was just people out there shorting spacs. so some of this could be once you work through that, this is essentially short interest in this thing that could start to unwind >> a lot of these were coined innovation stocks then years later, particularly after the stocks had declined a lot, people want to take that moniker back

>> yeah, innovation. spac but all of those are reasons why, listen, when you're setting up a screen of names that you're going to filter out and do deeper due diligence on, this, sofi specifically is one of those names that hit so many of those screens where you would establish a short position this was a final trade of mine maybe about a month back i think it had already declined about 50% then came out the biden news about whether there would been an extension of a moritorium and a certain amount of loan forgiveness. the reason why i thought this had a potential for a short-term pop is because it seem like what had beeed in was continuing to be ratcheted it on the name so like tim has mentioned, i think there are trading opportunities in names like this i think this is kind of a poster child for one of those names that kind of gets caught up with everything else. irrespective of what the business model is. >> coming up, biotech beatdown

it has been a rough year in the space and our next guest says the group needs to quote unquote self-correction. he'll lay out his picks when "fast money" returns (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 ♪

biotech continuing to slide lower. the etf is down close to 40% our next guest says the sector is saturated with unbuyable assets and a self-correction is in store, but he adds there are still a few bright spots jared, good to see you >> you, too. >> self-correction sounds pretty rough. what do you mean by that that the stock price has to continue to go lower >> yeah, for sure. it's less about stock prices or consolidation by means of sort of traditional m&a i pulled up a sheet last week of 820 of these companies j&j to companies enterprise value of in the negative billions and there were 500 or

more companies with an enterprise value of $100 million or less. close to 60% of this entire category you could almost just define as either non investable or buyable and so many of them started or stopped or the data's been presented and it hasn't been viewed positively by investors we almost have to go through this self-cleansing process in order for biotech to redefine itself by that, we almost have to focus up cap and there isn't that much left up there. >> when you did the screen, jared, presume that a lot of that 60% of that cohort does not make a profit. in other words, they don't have a product on the market or maybe they do, and they don't make a profit on that product yet and so you, it sounds like there's going to be a reckoning. some of these names won't have

access to capital markets anymore and will no longer cease to operate or will cease o operate, excuse me >> totally seeing some of that the xpi down 60% since last year seems to really not catch you know, a continuous or you know, anywhere near a real bid in the market despite what the s&p is doing. i think a lot of that has been absorbed, but yes, i think we're at the point where some of the companies have to sort of face the facts and they have to move on from either the program they were starting with or move on from being a company at all. i know so much has been talked about in terms of how much cash some of these companies are. maybe giving that back to shareholders having some of these assets merge with one another to create less entities would be some sort of solution. but we're definitely not there yet. >> tim's got a pairs trade can you run it by?

>> jared, and you listed a couple of names you liked. vertex is one of the first names on there $68 billion company. has a yield of 3, 4, 5%. if i did a pairs trade of the ibb versus the xpi and long the ibb, i'm up 30% since november my sense is from your thesis, that trade continues to work >> i think it could, yeah. we discussed this back in the fall i remember it well in terms of the fact that large caps had started to sort of move higher the biotech index moved consistently from the highs to the low and ended close to lows. i think that's probably okay over the short-term. there's a defensive bid in the market i think that helps the ibb a little bit and even a day like today, we saw some of these larger cap biotech stocks outperform many were up on the day when the

xpi was down again over the next few months, i wouldn't be surprised if that continues to happen. >> jared, it's karen thanks for being on. if one were interested in the ibb, i would think that you would need to think of some consolidation. big cap needs to come in to a bigger cap are there ones that you think are most likely to be taken out? >> it's so tough, karen, to sort of pinpoint the next, the next company to get taken out of the next company what i would say is you know, when we look at the cross section of large cap pharma companies, i think like the predominant factor that i believe determines whether investors are interested in owning a stock like pfizer or jnj or merck et cetera is revenue growth and consistent growth over a five to ten-year period. when we look at it that way, that would basically mean that would be 15 to 30 companies that

would be acquirable that would be material for revenue growth so when i look at it that way, it would be as tim mentioned like a vertex, even though is not inexpensive and it's larger, but vertex, insight, horizon, cgen i think these all kind of make sense. valuation is probably the cheap pushback we can go back and forth on each drug and how good they are, et cetera but i think when you look from a framework of what is large cap pharma looking for or what would actually make a difference, it would be some of these larger cap biotech names. >> jared, good to see you. thank you. >> anytime thank you. >> steve, we should make clear that ibb versus xpi, it's a planned market cap kpi weights smaller caps >> it's almost two to one. not quite there yet, but if you

look, if the ibb is turning in these large cap names are going to, go under a lot of investor attention, the first thing that investors do is look towards the beta what's the outsized play that's the xbi you want to look for these names because they're going to have outsized performance on the way up, but you want to look for cash rich balance sheet companies on the smaller cap names. >> would you put that trade on >> if you look at that trade also and you removed moderna from the ibb, so i'm taking it back from november moderna was a $350 stock it's now a $145 stock. that trade does even better. i like that. not because of the past history, but because of where i think it n e tu ithfure >> up next, final trades

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♪ ♪ i came, i saw, i conquered. (all): hail, caesar! pssst caesar! julius! dude, you should really check in with your team on ringcentral. i was thinking like... oh hi, caesar. we were just talking about you. ha ha ha. yeah, you should probably get out of here. not good. ♪ ♪ ♪ ringcentral ♪

time for the final trade steve? >> amazon. i bought it because of the split. >> bonawyn

>> vix innin it's coming to a level where you should put on protection >> eem >> karen >> yes, top gun. gigantic numbers you know what that means >> danger zone >> sell the news got to short some of those paramount upside up side calls >> see you back here tomorrow. "mad money" starts right now my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. i'm just trying to make some money. my job is not just to entertain but educate and teach you, so call me. interest rates soaring, check. inflation raging, check.