and it looks like the market has tried to make the case that it's priced in a lot, but hasn't priced in enough that's always the question. >> it's going to be hard to think that stocks are going down if the cpi is where people want. >> you would think sellers have been kind of keeping out of the way as well >> good stuff. i'll see you tomorrow. i'll see all of you as well. fast money begins as well. and right now on "fast," the crude climb. oil booming up $120 a barrel it's surged 60% this year. the ripple impact on inflation in the market straight ahead plus, summer bummer. rising rates taking a bite out of the builders. the pandemic fuel housing boom coming to an end later, surging which bourbon brand is helping fuel booze-filled bonanza. and i'm not just talking about the show i'm brian sullivan in for melissa lee. this is "fast money" live from the market site. on your desk tonight, daniel

sanders dan 1998 tan, pete najarian, let's jump right in. so much to get to tonight. but let's start with this. energy and interest rates. two big moves sending two major parts of the market in different directions oil prices climbing yet again, topping 122 bucks. the highest close since that crazy day back on march 8th. gas prices also rising the national average closing in on five bucks. in california, the average now $6.39. think about it you have a 20 gallon gas tank. it's $130 to fill up and that's with normal unleaded. these moves fueling energy stocks exxon and chevron hitting all-time highs check this out exxon has gained $300 billion in market value in just 26 months it has really been the year of the fossil fuel comeback meantime, a different story for corporate credit the hyg, etf dropping as bank

stops also got dumped. the big bank etf kbx posting its lowest close in a week with 98 of 99 components down. my math says that's nearly all the components a little bit scary so guy adami, energy rising, banks falling, what does that tell you and what do we do about it >> hey, sully, well, look, energy rising. now everybody seems to be talking about it i know for a fact pete was talk about this last summer on "fast money" we were talking about it with tim in the summer into the fall. now everybody seems to be talking about it obviously for good reason. what does it tell me well, it's not particularly good apparently the energy market didn't get the memo for the feds while you softening data across the board, you have energy prices that continue to grind higher and i think that's why interest rates are going up i don't think it's particularly bullish for the broader market in terms of the energy stocks, i'll say this, marathon petroleum all-time high today.

you mentioned exxon. maybe now that everybody is talking about them, it's time to take a breather. in the form of valero, the prior high of 120. that was the summer of 2018. mpc the summer of 2018 85 bucks but these names, don't mistake it they are still in play >> pete, here's the weird thing about oil and gas stocks is that they may not be riding any kind of economic trend and i say that because when economies go down, investment in new capital spending may also go down and oil's all-time high adjusted inflation was 2008 oil stocks actually performed well as the rest of pretty much everything else dumped out but do you feel like we might get close to a top, or can oil stocks continue to run >> you know, they could pause here but i continue to be very long so i think they're going higher, sul ly as a matter of fact it seems everybody has whatever

metrics they're using, but a lot of folks have been reaching out about 140 as the next level. it is? i don't know we'll find out pretty soon we got up to 120 before. we pulled back that's exactly what you want to see if you're look, whether it's a stock or in this case a commodity. but you want to see a little bit of a back and fill you want to see a little bit of a straight up. we pull back then we started to make this move again we not only got to 120, here yes at 122.50 or 60. i think we might actually break a little higher and then we might pull back. but i think eventually we will get to the 140 number. sully, when you look at all the different things, and you know oil better than any guy i know but there are so many different reasons why the price just keeps going higher and higher. we know that there is great demand we know about all the different pipelines and everything else going on in the world and some of the things that have stopped. but nonetheless, this is going to be a really, really interesting ride it's not just a ride for that, for crude. it's also a ride for nat gas

it did pull back late in the day. but nat gas pulled back underneath 9 when you look at the energy components right now, you are seeing a lot of demand and we just don't have enough. >> yeah, i just say this with you looking at the energy space and what percentage it is of the s&p 500, you and i were just talking about it above 5% that's great if you own energy stocks you're heavily levered to that space. but it's a disaster for the s&p 500. it's a disaster for the economy. started out the segment by saying interest rates are going higher because they're trying to battle inflation so if this fed is successful in doing that, you might see oil come in. but for all the reasons that pete and guy just mentioned, you might see it stay elevated, right, in an elevated rate environment. but you might see that situation that we've been talking about a little bit with stagflation, because it hits growth you know what? we have some data here last night from jp morgan, he said he thinks that you can see crude oil at $150 a year, but you could also see the s&p 500 back to its highs.

that would make it basically unchanged on the year, at its lows it was down 20% a couple of weeks ago. right now it's down 13.5%. i do not see that happening. if you look at 50 years of data, every time you have seen crude oil rise 50% above its trend, and that goes back to '08, 2000, 1990, you know the math, 1980, 1974, a recession followed and that's why i think stocks really should not be focused on the 5% of the group that's doing really well. they should be registering all of these companies that are starting to lay off companies, that are starting to die down, they're starting the get worried about the dollar input cost margins inventories. >> and to be clear, you're not talking right now about oil and gas companies. retailers. >> because it's 5% of the s&p 500. who cares unless you really index to just that sector. >> speaking of 5, we're going to talk about 5 below in just a few minutes. >> i can't do that >> we're going to the it it's called 10 the hard way. your take. oil and gas stocks, heck of a

run. does everybody start to guy's point at the top, suddenly everybody, they loved oil and gas stocks remember that? everybody two years ago, they said buy it's going to be a year. i'm kidding, obviously what's your take now what do we do? >> well, you know, i think i'm going to sing a similar tune to what dan just said i'm going to focus on the broader market and how oil kind of fits into that. i think what you're seeing is people looking for a safe haven. where can i actually deploy capital. where can i park money and maybe not make a ton, but but at least not have my capital base or corpus erode and i do think at least for now in the interim, oil does fit that bill. because it's a bit decoupled from everything else that's going on monetary and fiscal policy is one thing. but the events in ukraine and russia are contributing to this. the reopening of china is contributing to this there is a global story around here in terms of demand. and supply and demand constrain.

so i don't think you can really have one without the other, yes, do i think on a relative basis, oil probably continues to perform? yes. but to dan's point, if that's the case, that's probably pretty bearish for the overall market so in that lens, i think it's probably the most construcve, that along with health care of the spaces that you want to be but i would be cautious of getting bulled up on the back of the oil trade. >> okay. before we go to our guest, i want to go back to guy guy, you were very generously, as you are, by the way, a very generous guy, literally talking up some of your colleagues you've been talking about schlumberger i fill in ever couple of years you've been talking about schlumberger since i've had more hair give yourself a little pat on the back as well when we look at the oil complex, do you think it's going to be the servicers, the slbs, the howells or the refiners or c, all of the above >> yeah, that's fair and i appreciate that. that's not what we do on this

show as you know but in the ioh and the names you mentioned, 40% of the ioh is comprised of schlumberger and to a lesser extent baker hughes all those companies are run much better now than in the heyday of crude, let's call it 10, 15 years or so ago. they're better companies at better valuations. can they continue to go higher yeah a new 52-week high today, pulled back a little bit. but absolutely again, i'll say it the fact that everybody is now talking about energy as somewhat problematic and maybe that's a short-term bell ring on the top. but, again, by no means i want to emphasize this do i think this is over you can release every barrel from the strategic petroleum reserve, and we'd still have a problem. you know why and i know you know this, brian. refineries are running at full capacity, and they ain't making them any more. so we have to grin and bear it unfortunately as a consumer. but if you're long these stocks, it's a really good thing.

>> what's amazing, guy, and talking the oih, and thank you, i asked for five-year chart. thank you. move quick if you look at a five-year chart of the ioh against crude oil, the oih was at $1100 a share when crude oil was less than it is now, guy. so quickly go back to you, something seems off here either oil prices are going to collapse some time soon, or the oih is wildly undervalued. it's hard to know because the disconnect and we're showing our viewers on the chart right now is staggering >> yeah. i don't want to embargo this, but i would say to dan's point, when they were at those levels, oil was a much bigger component of the broader market. it's a much lesser component now. that's part of it. i think the other part of it is i don't think equity investors believe the commodity move and now as they start to believe it, you're starting to see these -- i don't want to say parabolic moves, but these significant moves and these equities i'll say this. i think crude oil can go

sideways for next year and i think these stocks continue to grind higher with crude at this price. you're spot-on for mentioning that i think it's a factor people just don't believe it yet. >> you wonder if they start to believe it or forced to believe it, they're going to pile into it we'll see. all right. well, one top analyst sees major producer troubles driving oil prices even higher the managing director, scott is one of the top three most accurate analysts. got some smaller cap picks for us here. and by the way, rbc had a conference i was at a conference today. it was their conference. and yesterday you had former opec secretary general speak with our friend and said something that caught my eye he -- he looked glum in terms -- he said there is no spare capacity maybe a couple of million barrels globally, which sounds like a lot, but it's not he seemed more serious than i've seen him in more than ten years. i've known him for ten years what's your macro takeaway from that and your conference

>> you said that surprised you and i'll tell you what, it surprised all of us. it surprised the investors there. and it surprised the corporates. we had roughly 100 corporate execs from big energy companies. they were all shocked at what he said and look, i'll tell you this is i think it's to the point that you made, investors i think now are going to have to start believing higher oil prices are here to stay, at least for some duration when we look at the macro, big pictures that u.s. exploration companies are not ramping up production and not because they don't want to there is logistical supply chain constraints out there. they're real they're in the energy patch. and you couple that with service cost increase. nobody is running out there and trying to get too active right now. they can't if they wanted to so any kind of material growth, we're looking at maybe the back half of 23 at this point so we think fundamentals warrant $100 oil for a while. >> to guy's point and answer sort of guy's sort of question

that he posed. let's say oil falls. let's say oil goes back down to $100 a barrel. or stays at 120 for the next two years. does that mean the stocks stay or fall? or can the stocks like rocc, california resources, crc, can they keep going up, even if oil does not >> yeah, and i think they can, but i think it becomes a little bit more tactical at this point, right. if you look at the last 9 to 12 months, it's all been large cap leadership, right? the big names have been leading the charge and the small caps have been left behind. so we do think when you look at free cashful yields that are reaching 25, 30% for the small cap group, that could be a move to the small cap names we like ranger oil as crc in the small cap right now. that looks very, very cheap. >> exxonmobil going back to mega caps it literally has gained 100% from last summer or so that's $200 billion in market

cap. it's right back at the 2014 highs. in 2014, the fed was doing the same thing they're doing right now. they're trying to normalize interest rate policy so we had the dollar rally and that was the top in crude. and we saw it come down. and then we had plenty of growth scares throughout. what's different this time why is it? every recession has been preceded by a move like this in oil. and i know we can come up with a million reasons. what's coming up in europe and china coming back on i just don't see it happening too differently right now. >> it can be different this time it's never different, it's always the same. but this time is different because if you go back historically, oil and gas companies didn't make money. they didn't make cash flow, right? you have high oil price, costs are high you spend a lot of money, you burn cash. >> i was going to say, scott, can i correct you in is that they threw a pile of money into a fire, threw a match oven it. >> ten years, they burned

through investor capital >> i was going to say. >> some of the larger more integrated companies globally had better discipline. not some of the smaller exploration focused companies. but now the companies are producing a lot of free cash flow it's almost ridiculous when you talk about 25 to 30% free cash flow, think about that you have $100 oil. that means the company effectively can give you the value of the entire company in four years >> back in just cash. >> but that's assuming crude stays here again, going back to why it's not different, crude is literally going to make this move everyone is convinced it's going to 150 so it's going to 150 and then it's going to crash the global economy and the demand is going to fall off, and then it's going to come in, all these people piling into chon mobile with the $450 billion market cap at all-time highs are going to look back and hoe by michigan goodness, that was the mother of all triple tops, it's just the

way it's going to be i don't mean to sound so certain about it i think piling into the names right now doesn't make a lot of sense. talking about the ioh, slob, howe, baker. look at a long chart over 20 years. it's breaking out above that downtrend. there is probably a case to be made there if there is going to be greater investment, but i don't see it as far as the large integrators are concerned. >> it's a volatile sector there will be opportunities. the companies will pull back you got to step up but fundamentally, there is still more value i think that's reality because in the prior spikes and price we had when we saw $150 back in 2008, that was a spike and came down pretty quick after that >> to dan's point, well,housin contributed to the subprime crisis >> yeah. >> but four of the last four or whatever recessions were preceded by higher energy costs. i think that's the worry how long does it stay high we're looking at names like rocc and crc? >> i think we have to be

tactical and look at some mid caps left behind those are where i want to put my next dollars. >> good stuff. thanks for the cnbc conference. >> absolutely. >> do it in miami or austin or houston. all right. let's trade this year. pete, okay i think to dan's point, dan can speak for himself. but i think to his point, it's that do we -- we're getting signs of weakness, retailers, whatever were did on worldwide exchange the point where you get the rule of ten when mortgage rates and gas prices add up to more than 10, it tends to precede or maybe cause a recession. we're there now. 5 on more. five plus on gas are you worried that this will cause a crash or a slowdown in the u.s. in global economies >> absolutely. i think that's got to be a concern. how could it not be. but the one thing i'd like to point out to you guy, when everybody wants to go to these other different areas where it's the ioh or the xle or something,

i would encourage you to look at the xop. the reason i say that, the exploration company, these have been absolutely ripping. and it's not just something that just started, guys you look at the xop. take a look at that chart. you can put that up against any of the other energy charts and you'll see a huge outperformance why is that? those interest beta names within energy those are the high two, three, four, fives. it's absolutely crazy. the diamondbacks of the world, the occidentals of the world, all of those i think you've got to be very selective on where do you want to be? and you have to understand to dan's point, at some point this will slow down or stop and then we'll see this all pull back you've got to be very, very tactical and very smart and very disciplined because that day will come. we have no idea when that day comes. but i'll tell you what these names have absolutely been performing to almost perfection to the upside. as great as chevron has been, as great as exxon has been, take a look at some of those other names. >> well, perfection is a tough

word let's move aside from that we hit this moment ago we mentioned it. 5 below. shares are dropping. we're down 6%. a company posted a miss on revenues saying first quarter sales were softer than expected and, guy adami, we're starting to get these retailers talking about suddenly they've got too much -- couldn't get any inventory a year ago now suddenly they got too much >> 54.3% year-over-year increase in inventories of 5 below. i'll say that again. 54.3%. it's ast soronomical. i'm not getting on 5 below we saw walmart, their inventories were a disaster. so for some of those retailers, i'm sure when they see things like this, they're collectively breathing a sigh of relief because it's not just them the problem is what does this say about the state of the consumer and what's going on? and when people have to now

decide between purchasing some of these larger durable goods or feeding their family and putting gasoline in their cars, i think you understand where it's going to go. so it's not a 5 below story necessarily. it's a story about what's happening out there right now. and it's not going to be -- listen, this isn't the first one, clearly, and i guarantee it won't be the last one. >> i guess my confusion is this. and look target, tgt it was hailed as this amazing company until a couple of weeks ago. now its stocks have been pretty much a disaster. are we seeing the beginning of a consumer-led slowdown or are we simply seeing companies screwing it up? they couldn't get any inventory. they panicked. they bought everything they could, and now they're sitting on too much inventory. they're going have to discounty. they're going take it at the margin but it has nothing to do with the weaker consumer. i have no idea at this point what's your thought? >> well, they're going to take it on the chin and it's for two reasons we are seeing weakness in the

consumer in terms of certain spots. and we've all pointed to the savings rates and all of those things and wealth built through housing. but you're also seeing some operational inefficiencies it's easier when you're behind the ball to kind of order and assume what you're seeing is a pretty drastic shift in consumer demand sector by sector in terms of what basket of goods that they want. and you're seeing some operational challenges in terms of being able to meet that so no, it's not just a 5 below story. it's probably not just a target and walmart story either but i would assume that they have pretty good read-through on the consumer think of all the goods they sell and if they're struggling with this, i don't think it's an isolated event by any means. >> all right well, it's something to watch certainly in 5 below, down 6.5%. all right. on deck, we've got results from investopedia's latest survey we know you're pumped an you're going lay out the top concerns of investors but first, shares of intel getting fried after a bearish call from a top bank

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intel shares gut punched today down another 5%. citigroup saying their bear case is taking shape earlier than they thought it is our call of the day. you know, dan, 41 buck, intel shares have wiped out five years of returns the last time we saw this kind of price, october 2017 >> it's pretty fascinating even with amd's decline since its highs about six months or so ago. these companies are literally matched up at market cap, about 165 billion each i think that press fascinating i think people who follow this industry for a very long time are going be surprised to see the flipping we've been talking about a lot of these mega cap names and specifically more cyclical areas of the supply chain as it relates to semiconductors. you said it before you saw a lot of oems double ordering chips and all the shortages throughout the pandemic and really, it felt like if they were still doing this late last year, early this year.

they're probably doing it wrong, if you will. intel one of the weakest links they've been losing market share to amd and some of the other competitors. it's not surprising this sort of warning is coming out from them. it seems like a soft warning they're not putting any numbers around it. this is when companies in the semiconductor space used to give their mid quarter updates. this is what is going on we're going to see a lot more. i suspect we're going to see announcements before the end of the quarter. >> guy, listen, apple booted intel. they're going with their own chip, the m2 as well it's fundamental a big deal as well this is a stock that looks like it's in trouble. it's getting crushed >> it's long before apple, though and again, i'm going to get on intel here but this is intel specific the world passed them by the same way the world passed ibm by remember, ibm wanted to be ibm for years. and very quickly the world changed and they were forced to make an acquisition. they probably overpaid for red hat but needed to do it. same thing happening with intel

now. they didn't see the competition coming in the form of amd. they didn't see the changing landscape, and they're paying for it now you look at qualcomm to throw a name out a name trading ten times next year's numbers, a much better company at a reasonable valuation. i think you can be there people say on intel and valuation, they've been saying that literally for the last five years and it really hadn't panned out all that well. >> quickly, pete, is this a stock people hang on the too long because they know it? to guy's point, oh, it's intel it has to come back. >> the answer is yes it's really easy, and i'm one of them unfortunately, brian. i've owned this stock for a long time not just because the fundamentals looked so great, but also because i really thought under the management they had they were going to be able to move out and start to compete again. that has not happened. that's a big issue and they've got so much focus on building the factories and everything, which is great but that's years in the works. so unfortunately, they're going to be spinning their wheels for quite some time. and i think continuing to lose

that market share. so unfortunately, i don't see this looking very bright right now for intel's future >> guy wouldn't do it, but you got on intel there you go pete, thank you very much. we are just getting started here on "fast money." are we really? any way, here is what is coming up next. >> inflation, geopolitical tensions there is a lot to be worried about these days so what's on investors' minds? the details next plus, a big bounce for china tech the k web etf surging into the green. how are options traders playing the move the action ahead you're watching "fast money," live from the nasdaq market site in times square. we're back right after this. joel, since kansas, we've taken our own path. we've never done what everyone else did. we took on the fear. we ignored the doubt. we loved the excitement.

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welcome back to "fast money. stocks breaking their two-day win streak today, with all three major indexes closing along the red. fell 269 on the dow. investors anxiously waiting the consumer inflation number. we say we're talking about cpi, because inflation ranking is the number one concern for market watchers by far. we know that because at the top of the latest invest investopedia survey. let's bring in caleb silver. this was not inflation by a nose this was secretariat blowing away everything else >> it's not a surprise everybody is worrying about it, everybody is feeling it, and investors, our readers are like this is going to catch up eventually, if it hasn't already with my returns. it's already eaten into a lot of them so they're very anxious where. is mel brooks?

anxiety is super high among our readers right now. >> the only thing that makes me nervous is anxiety 57% say they are worried about recent market events 25% say they are very worried. those sound scary. how do they compare to past surveys? >> a little higher and we have a new one which is the fed reducing its balance sheet which is taking place this week they're worried than now too but they're worried about everything under the sun, not doing a ton, but worrying a lot, anxiety high, action low >> caleb, you've been in this business a long time it's interesting a lot of smart investors watch investor sentiment right now it seems like investors are really, really bearish, which some strategists think is really, really bullish i'm curious what your take is right now. it seems like every investor i talk to is really worried about worst case scenarios and most strategists look at that same data and say that's why stocks are going back up. >> that's that contrairian indicator we're looking for. this time it feels a little bit different because the future

doesn't look anything like the past rates are rising inflation is here. it's sticking around and this notion of if i bet on the biggest, baddest growth stocks out there i'm going to be fine is not working anymore. if you look at their top holdings, they are the biggest baddest mega caps out there. the same thing you said earlier, people get used to the names they assume they're coming back. it's going to be a hard, long road for these stocks. >> caleb, really appreciate you joining. just a quick question in terms of fed shrinking the balance sheet or allowing a balance sheet to run off is there a reason why you believe that that is a newer concern for investors? it's kind of seemingly been lost in the shuffle vis-a-vis some of the other risks that they perceive >> the sirens around inflation are blaring so loud. we know these interest rates are going to be on the rise. we've known that for months. the fed has been pretty transparent about that and the balance sheet as well. but until we start talking about it a lot in the media and shows like this and throughout financial mete media, it doesn't

take that mind space until they start to see it happen they know it's occurring right now. this is new to the list. it surprised me because it ranked so high among their concerns >> what was your biggest you do these all the time. what was your biggest surprise takeaway from this >> they're scared. they're anxious, but not doing a lot. a lot of investors are just staying put because they're passively invested they're stuck in the underif they've been in forring an will time they're stuck with the stocks they've been in for a long time. those that are moving are moving to a safer place etf and cash, they want to broaden their risk and diversify it a little bit. but they don't want to move out of the big names that got them here >> maybe warren buffett would be happy about that, right? >> yeah. >> buy, hold, no transaction fees, cheap expense costs, ride it out caleb silver, thank you. >> thank you. >> appreciate it >> all right coming up, tequila and a tobacco, and that is not just the commercial break all right. we're idding but are we but we are trading some of these

so-called sin stocks the details coming up ahead. plus china tech getting a big bump lately to k-web, surging nearly 6% toy.da we'll break it down when "fast money" returns space. the boundary of human achievement. the new frontier. ♪♪ eh. ♪♪ it's not time to escape. it's time to engage. it's time to plant more trees. hoo! ♪♪ time to build more trust. time to make more space for all of us.

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all right. welcome back to "fast money. if you own chinese tech stocks, you made money today kweb china etf jumping nearly 6%, the highest close since february coming after treasury secretary janet yellen said reducing tariffs on china would be worth, quote, considering the names went into a frenzy joining us now with some of the action, you say frenzy what does that mean, mike? >> when i say frenzy, we're saying that all of these names really were trading multiples of their average daily volume alibaba is probably the most prominent. it traded more than five times its daily options volume over a million contracts in total. one of only three stocks that actually achieved that the busiest options were the weekly 120 calls but the ones that stuck out to me were actually the january 150s we saw a buyer of 45 5 of those calls pay $6.70 a contract that's risking a little over $3

million in premium on a bullish bet that alibaba's run is far from over and could rally more than 30% in the next 7 1/2 months or so several other chinese names also extremely busy and as you pointed out, kweb and fxi, another chinese etf seeing a lot of activity today. >> mike, thank you very much pete, your thoughts. this is a disaster to start the year suddenly it's back in vogue and on fire again. it's kind of odd >> yeah, and it's been about the last month or so where we started to see the chinese names absolutely start ripping to the upside and they certainly have. when you look back and you see where something like fxi or ash or some of the different etfs that are out there, it really is very clear that there has been a huge swell of buyers coming back into there when you look at something like fxi we had huge paper in there as well. all the big paps names like baba, names like 10 cent but today they had the july 33

calls. they sold 80,000 of them, brian, because they'd already bought those weeks ago. they performed extremely well. but owe know what? they're not out of the trade they actually rolled up and bought the july 36 calls they bought 80,000 of those as well so it just shows you that's a smart trader who wants to continue to ride this wave to the upside, but taking some profits all off the table. i love when i see that so i actually did participate in that trade as well today >> bonawyn >> yeah, i think it makes sense. ultimately people are going to look for underperformers to kind of park some cash, right and it's got to go beyond just buying what's underperformed this has been a sector that's been hit -- performance has been hit because of regulatory and tariff and things of that nature i think it bodes well for them i think it also bodes well for domestic alternative energy type of companies so there is a real fundamental case for why there is some upside here. and that's what i think you ultimately are going to look for in a down market when you're concerned about global growth and other areas of the market.

>> ben >> yeah, we've been talking about this they seem kind of uninvestable they've been very tradeable. guy said this the other day. yes, with the regulation overhang and maybe it's gone for a while here, great trading stocks pete just mentioned all the options activity mike khouw has been all over it here if you have been trying to define your risk and pick a bottom in these sorts of things, you did pretty well right here but it's really hard to make a case why you want to own any of these names given what we've seen that the regulatory environment has done to their equity value over the last couple of years. >> yeah, because xi jinping could change his mind tomorrow. >> correct. >> and just crack down and all of the sudden they're down another 20%. >> correct, sully. >> i want to own alibaba and an auto parts company because then we'll have baba o'reilly tune in to the full show at friday 5:30 p.m. eastern time. all right. coming up, sin stocks tap. one name in high spirits the other forgot a bit

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all right. welcome back to "fast money. we have got a duo of sin stocks moving in different directions finishing almost 4% higher after reporting better than expected results in guidance. the ceo joined power lunch today. >> the spirits business has been solid through this pandemic. it's been very volatile. you've seen ups and downs. we've seen consumers move from restaurants to the off premise and back again so you've had tremendous

volatility, but tremendous resilience and the business has hung together >> meantime, altria dropping more than 8% afmorgan stanley downgrading the stock. guy adami, your take on one, both, none >> well, i mean, i just want to give a quick shout out to all the people watching from san aquito high school brown forman has this major -- if you go back and look technicians out there. and i think valuation wise, you can make a compelling case what i will say, if you want to be in the space, and we've said this for a while, constellation brands is the place to be. stz symbol still reasonable valuation and oh, by the way, i don't know if tim is watching or not, but the cannabis portion as well so space is clearly in place constellation is where i would go

>> but san san dieguito. he is a lot better than i am in everything finally, your take on the altria liquor trade >> yes, you know what? i'll compare and contrast the two. when you think of cigarettes and liquor, you kind of think about them being cyclical and having some elasticity of demand and being able to perform through various cycles my key take away, you showed the clip later on in the segment he speaks about the impact that the reopening of restaurants and bars has had when you juxtapose those two, that's an effect that has happened on brown-forman that has not happened on altria the last thing, i relatively think of mo as a safer play, but i'm looking at places where i can run and hide if you're really starting to see inflation impact that segment, i really think your antenna have to raise and you've got to start understanding what impact this

is going to have on the broader market >> yeah. and pete, i mean, jack daniels booming apparently >> absolutely. absolutely you know, the spirits is absolutely -- it's been volatile, but it sounds like it's going extremely well, extremely strong i'd like to hit on this altria real quick, though the idea that people are willing to or need to move away from the higher end to the lower end of cigarettes, that tells us a lot about inflation, right i think it's an amazing thing. and i thought this analyst did a great job. so it's a name that i have liked in the past. i actually had some pretty good rides. when you look at the year to date performance, it was good until today. so i think it's something that i think it's very important. i think a lot of what they pointed out makes so much sense right now buzz of the fact that people are having to scale down and scale back and go to more generic as opposed to being in what they would like to be doing, which would be the higher end of cigarettes right now. >> you wonder if it's going to happen in liquor too over jack daniels, mad dog 2020.

don't do that. coming up, open houses, closing down the half century milestone and the mortgage market and the impact it's having on home builders we're going bring you the details when "fast money" returns. keep sufficient cash reserves in a savings account that is separate from your investments. that way you don't have to tap into equities or other long-term assets if you need money and can avoid locking in losses when stocks slide for cnbc, i'm sharon epperson.

♪ sweet ♪ ♪ emotion ♪ ♪ sweet... ♪ now that's eatin' good in the neighborhood. all right. welcome back a ton of big names on "mad money" tonight jim's in san francisco all week. speaking with the heads of cisco, okta, and snowflake catch those interviews at the top of the hour, only on "mad money. meantime, check out the home builders under pressure. get this new numbers show that mortgage demand fell to its lowest level in 22 years. wow.

rising rates slowing home sales not helping the situation. guy adami, what do you make of this >> well, i mean, it's a witch's brew as they say affordability has never been worse either that happened extraordinarily quickly. you just mentioned 30-year rates doubled in the course of few months seemingly, and the rug has been pulled out from everybody. the question is, is a 36% move in a name like dhi from a high in december to levels now, and is there more pain ahead i think there is more pain ahead, but there is going to come a point, especially for a name like dhi where just on valuation alone you have to take a shot unfortunately, i think that level is probably closer to 65 than 72. >> pete? home builder take. >> yeah, and i would agree with guy. it was all driven, of course you had the pandemic you had that great move. stock was 34 bucks at the lows and ran all the way up to over 110 or whatever it was so it makes sense. a lot of that was built in

because of what we were going through. people were leaving the cities going to all different parts of the country outside of major cities and now all of the sudden you've got the rates going up so of course you're going to give some back and we've given a lot back i think around 65 or so, i think that's going to be a base where we can actually start to see the stocks start to rise again >> and i just say this when pete mentions the dynamics about the pandemic and the migrations and people work from home, well, that's about to end. and i'll tell you why it's about to end unemployment ask about to tick up we're back at prepandemic levels those were 40-year lows. you're seeing new announcements of job cuts every day. and i think that's the thing that probably tips the scales on the housing market other than inflation, other than rates going higher >> you're saying -- the employees are going to lose the power they've got now. >> yes >> they're going to be forced to go back to the market because job market is getting tighter. >> yes. >> are you a yes or a no and now it's a game. >> yes to dhi.

if you look at their debt to cap and gross margins. i have another name for you actually toll brothers. i think this one probably doesn't get the shock that the others do. dhi, they made their case for that toll brothers, if you look at their average sale price, they're appealing to a consumer that's on the higher end if you really drill down into the housing numbers, what's really being affect ready the entry level homes. the first-time home buyers those who are disproportionately being affected toll doesn't really appeal to that consumer. for that reason i think of them on a relative basis, dhi and toll are likely where you want to be. >> guy, final comment. listen, 4.5 times earnings for toll 4.5. and lumber prices have come down and there are some things that are on their sides >> the contrarian will say the time to buy these stocks are when valuations are at their peak, not at these trough value. that's another conversation probably when we have more time. i understand what you're saying. i think we all collectively have

said these stocks have clearly taken a haircut since the end of last year, beginning of this year the question is, is it enough in this environment unfortunately, i don't think it is but if you're look for levels, bonawyn just mentioned one for toll and i think pete and i sort of hit it in terms of dhi there are going to be levels where these stocks become:00 extraordinarily tradeable. we're just not there yet. >> okay. we'll leave it there up next on "fast money," your final trades stick around what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq yeah, let's redo the basement. yeah... oh. don't worry i got it! hello home movie theater. (laughs) spare bedroom. why not both? use the u.s. bank mobile app

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time now for your final trades go around the horn we're going to kick it off with guy tonight. guy? >> san dieguito high school. i love it. starbucks coming back online in mainland china >> san diego founded by the germans in 1909 pete >> i'm going to stick with the china theme. i'm going to give you fxi. i think it's going higher. >> bonawyn >> if you want exposure to the energy complex, what you're worried about the high data stuff, take a look at some of the refiners how about mro. >> how about it, dan >> we're talking about that intel. wasn't a preannouncement kind of soft guide down. i think we're going see a lot more of it

i think the smh, i don't see this thing working higher. might the markets rally a little bit in the quarter end, but into q 3 you want to sell >> smi, semiconductor not shaking my head. thanks for watching "fast money" tonight, everybody "mad money" on the west coast with jim 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 a special west coast edition of "mad money. welcome to cray mere ya. other people want to make friends. i'm just trying to make you some money. my job isn't just to entertain but to educate and put it in context. call