off of this market and you're going into the summer whenever you think about the direction of the market, usually you're not going to bet. what the vix is how jumpy are things going to get in the next 30 days? more or less than right now? >> we're all going to be watching tomorrow morning to see what happens and how the market reacts we'll see. we'll have another chat tomorrow that's santoli's last word cq, it's all yourself. scott, thanks. right now on "fast," we're counting down to the most important data point for the markets before next week's fed decision, it's cpi stocks sell off into the close forget the idea of netflix buying roku. a top investor thinks they should buy spotify and how home improvement can improve your portfolio and later, diving into dividends from defense to insurance to riding the rails. i'm carl quintanilla in for melissa lee. this is "fast money" live from the market site. on the desk tonight, guy adami, steve grasso, boon win dyson and

guys, a pleasure to be with you guys again let's begin with the late day sell-off s&p down nearly 2.5. nasdaq sheds nearly 3. only one dow component ekes out a gain every sector down. financials and tech lead the losses moves come as investors count down to one of the most important data points in recent memory just over 15 hours until we get may's cpi, the latest indication of whether we've hit peak inflation. how will it shape investors going into the weekend guy, what do we think? did we get spooked late today? >> first of all, q, cnbc royalty that you are, it's wonderful to have you join us, number one number two, yeah, spooked, but i don't know necessarily it's back at cpi as much as it is some of the rhetoric we've heard from a lot of these companies about hiring freezes, inventory builds, all those different things and something we mentioned last night, and this has been concerning me, and seeming concerning the market now.

credit, which has not been on anybody's radar screen seemingly now is rolling over in the form of the hyg check that intra-day move out yesterday around 12:30 look at what id did today. today it's the final piece of a bear market credit and if credit rolls over, i think that 3750 level i've been waiting for in the s&p is a forgone conclusion. >> you go along with credit part of this? we did -- cnbc broke the news late tonight before the close about stitch fix layoffs another indication of another former high flyer trying to rein in spending. can we put all that together in some kind of narrative in advance of tomorrow's print? >> yeah, i think inflation is an important part of it because it ties into rates. but for sure what's going on in credit is concerning you saw early indications with companies like affirm starting to report major loss, right. people aren't paying for their sweaters that's a problem that starts to peter out through the rest of the economy. once credit goes, i think the

rest of the whole thing go >> steve, how about you? how surprised were you by that last half hour of trade? >> yeah, carl, cpi is definitely on people's mind we've heard from the retail sector, retail stores. we've heard from that enough to give us a little sniff of something negative the market is worried about rates. the market is worried about recession. they go hand in hand so if now we're starting to hear about companies already getting ahead of the eight ball, saying let me lay off employees and let me worry about the negativity that's coming, i want to be ready today instead of tomorrow. instead of when it happens that's something where investors say hey, maybe i should pull back a little bit. so it's contagious, but i think it started with the cpi, to your point where you opened the show. >> bonawyn, it's interesting yellen a book deal today in d.c. one of the thing she points out

is she surprised how pessimistic households are given the buffer savings that remains there she didn't even mention things like home equity that remains untapped why do you think negative has gotten so advanced is gas prices in the budget? >> i think you point out a good point. people are negative because there is not much to be positive about. you read the headlines we're going tell you all the things that are currently wrong with the economy you've got the russia situation going on it's not just about fuel prices. it's also fuel prices. it's every input to that cpi basket you're feeling that upward pressure on. you're starting to see corporates now indicate they're either going to freeze or make layoffs. a and the wealth effect that you have in the stock market has now taken an impact. yes you do have that untapped home equity. but the cost of tapping into that equity has gotten more expensive now. i think all of those things combined starts to put the ratchet on the consumer. and it's being reflected in those reports. >> that's a good point guy today we did get net household wealth for the quarter

down half a trillion and, you know, next four sessions is going to be light on corporate news, light on earnings it's going to be in cpi tomorrow, then ppi tuesday and then the fed on wednesday. and i just wonder whether you think the next week or so is going to be a bit fraught. >> i do. and listen, you know, janet yellen being surprised by things, that should come as no surprise i think she was also surprised at the nontransitory nature of this inflation that they were all begging for. seemingly for years. but i think you make a good point. bonawyn hit the nail on the head let's face it. 73% of this economy is driven by people buying things people buy things when they feel good about things. and quite frankly, i don't think people feel that great and if the stock market would sell off in a meaningful way, consumer spending is going to stop on a dime, and then it becomes somewhat self-fulfilling. the market is still too expensive in my opinion. what's the right multiple in the environment we find ourselveses? rates are going higher not because the economy is going

gang busters rates are going higher because inflation sought of control. for me it's not a healthy mix for the market right now. >> remind me what's the level at what you get interested again, guy? >> well, 3750 is the level i've been talking about seemingly since the fall we got down to 3810 a couple of weeks ago, we bounced. 3750 makes sense if you start doing the path david temper has talked about him getting interested if the market were to trade down to 3500 i think you can see the overshoot down to those levels well see the market shoots to the upside there is no reason we can't see it shoot to the downside as well >> steve, do you have a similar view as to when things do get a little more appetizing >> yeah, i was right there with guy. talking about the 3800 level mike wilson from morgan stanley i believe has talked about the 3400 level so right where guy was talking about his well, 3400, 3500 carl, i think the major issue

that i'm dealing with is everyone i speak with on a daily basis is asking me when to buy the dip. you can't have a substantive bottom until people want to sell everything you've got to have people throwing things out, not worried about is this a buyable dip. we haven't got there yet when we do, you're going start to feel nausea about the market. and no one feels nausea right now, even though people have lost tons of money no one is sitting here saying oh my god, the markets are never going up again that day is when the bottom comes. i would say that guy's level of 3750, mine 3800, we're probably a little too conservative. it's probably somewhere in the middle there so i think we could feel safe saying it's 3500, 3600 and you know what? maybe nausea is 3400 >> you know, julie, it's funny we thought we were getting to that area back when the vix was

flirting with 30 and above now we're back to 24 and i do wonder why you think this sense of false comfort is being relayed, at least in that one instrument >> well, i think many are trying to find the opportunities to stay invested. there still is a lot of liquidity, right and we still have pockets where earnings growth is occurring i think there is a lot of enthusiasm still around commodities. there is a new hot etf to play commodities. so i think there is plenty of interest in oil and gas. but those are not sectors that as a long-term investor i'm particularly appetized by, particularly as we said, the consumer is so critical to driving the economy. and we talk about cpi, and we go x. food and energy. that's like saying i had a 4.0 gpa in high school as long as you exclude math, science and english. just pe. it's just not the same, right? consumers really care about those prices and that's going to take a lot of their confidence out. >> that's a good way to segue to

her next segment for more on what tomorrow's numbers might mean let's bring in chief economist lindsey piega. good to have you back. i was looking at the street's estimates for headline tomorrow. it's remarkable how concentrated they are in the 0.2, 0.23 range. what's your range. >> we're right in that too, down slightly from 8.3, but still a very elevated number and if we do look at the core measure as much as it tells us, excluding food and energy, we're looking to come in shy yes, we're seeing some indications of cooling, but the market is very anxious to call a peak in inflation. and i think that's a bit premature at this point as we're still seeing conflict overseas we're still seeing supply chain disruptions, and the fed hasn't quite choked off the demand side yet. >> right it's been a week to a couple of weeks where we've seen a lot of signs of disinflation and

apparel. we've talked about it in metals, fertilizers, maybe chips and shipping rates there is a lot of discussion how those things aren't going to move the needle of the index itself given what's happening to shelter and energy. >> absolutely. we are seeing some pockets of improvement. the second derivative, but we really don't think it's going to be a sizable or meaningful impact on that headline number and by extension, it's not going have a meaningful impact for the fed. the fed has been very clear that they want to see a very steep downward trajectory and inflation before they're convinced that it's time to pause or slow the pace of policy removal. so tomorrow's number even with that improvement from 8.3 to 8.2 as we're projecting, that's not going to move the needle for the fed. >> so lindsey, it's steve grasso so when you look at the cpi, it's a lag indicator number one. how much information are we really getting there and number two, can you call a

bottom in the market for equity players, not for you, but equity players, can they call a bottom in the market -- up until we've seen the effects of qt on the tightening process >> so your point to the backward looking nature of the numbers is absolutely correct in fact, much of the cooling that we saw last month and are likely to continue to see month may in fact be a reflection of the improvement in the global economy at the start of the year, before russia invaded ukr ukraine, before we saw this second, third and fourth round of lockdowns overseas. and so, again, i do think it's premature that the market is calling a peak in inflation. we're looking to call for peak inflation as it's likely that prices will remain very elevated at this level for quite some time, continuing to put downward pressure on consumers and add uncertainty to the marketplace >> finally, lindsey, one thing that struck me this week, even with oil at 120 and gas national average of 5, gasoline demand is

just getting started it appears for the summer and i wonder, what's the risk of cpi in the summer months actually taking a meaningful leg higher from where we are right now? >> absolutely. particularly if demand remains elevated for energy. because right now consumers are still out in the marketplace spending, but obviously higher prices is cutting into the amount that we're taking home. but if consumers are more interested in going on that vacation, driving somewhere this summer, and forgoing purchases elsewhere, what we see is simply a shift in allocation of capital towards that energy component. not only are prices on the rise, but demand could stay steadier increase as we typically see in the summer at the detriment of other categories, perpetrating that rise in the energy sector in terms of energy prices. >> we'll see what we get in the morning. as always, thank you so much good to see you. >> thank you >> joining us from stifel today. bonawyn, does it make you think maybe the table is set for more than 50, maybe 75?

maybe a point interim hike >> maybe if they hadn't taken 75 off the table there was much ado made about why would you remove that from your quiver? you may need that arrow. and i'm with her i'll take it a step further. i think peak inflation is a misnomer it doesn't matter. i'll tell you what we have we have persistently elevated unactionable inflation, and it's volatile so the things that we're saying were getting some puts in now, okay so, food is a little bit cheaper. lumber price, we've gotten some abatement there. but now energy, commodity prices are now much higher. so the fed is going to need to see a sustained downward trajectory and really be able to wrap their hands exactly where this is trending towards before they're going to move. i think we're really trying to reverse and engineer the narrative that we want to hear and make a case for why we want to buy the market. and i just simply think the rules of engagement have changed. the fed is in a different position. >> it's a rolling series of

nonsynchronized events -- war, china, inflation. >> absolutely. >> you name it that it's going to make it hard to time. we do have some earnings to get to season. earnings alert on dock you sign. shares dropping after an ea earnings mix hey, frank. >> we're looking at the stock fall, the lack of eps guidance, there really appears to be what's weighing on this stock. strong quarter most of the metrics. billings and free cash flow well above estimates. but on the call they end up with i was listening a short time ago, ceo dan springer provided some explanation for the profit miss. >> we're experiencing many of the macro challenges that our peer companies are seeing with inflationary concerns, a volatile workforce environment and general global instability >> so, again, no eps guidance after that miss on profit. but the revenue guidance was basically in line for estimates for both the quarter and the

full year. the notable exception on guidance was billings guidance that's the money they expect to get from customers that came in considerably lighter than estimates the company also said it was slow hiring. coming up tomorrow at 11:00 eastern, docusign as well as hi partnership with microsoft announced earlier this week. >> let's trade it, guy does this undo any of the goodwill we got earlier in the week on the microsoft news >> 100%. without question to frank's point, it wasn't a quarter necessarily. it's the fact that again urges continue to get ratcheteded down think about this for a second. should never have been there in retrospect but in ten months, the stock is down 77%, which is a staggering number the problem is it probably still has more room to go on the downside i'm not trying to harp on dock you docusign it's very hard to start calling the bottom in a broader market

when you have bombs like this coming out seemingly daily target and walmart, 5 below yesterday with their huge inventory build. microsoft preannouncement a couple of weeks ago. when companies start out preannouncing on demand, that's going to be a problem. you haven't seen that yet. but unfortunately, i think that's coming to a theater near you. >> steve, what's the difference between the fundamentals of a name like this and the investment narrative because it's not like we're going stop doing things digitally or remotely, even post-covid the way we're getting used to during the peak of the pandemic that practice isn't going away completely, is it? >> yeah, so that's an important point there. soduring the day, docusign was trading at the february 2020 level. and now after it reports this print, it's trading at the pandemic low so it's already fully cycled that and to guy's point, this thing

ran up dramatically during the pandemic this was something -- this was the future this was people working remote and it's not going away, carl, for the electronic signatures. i used it three times today. the problem is this is a growth stock. so what has changed in docusign from february 2020 rates. so when you look at how growth is getting smacked around with rates, we don't know what the terminal rate is just yet. we don't know how quantitative tightening is going to react with rates and it makes very -- it makes it very hard for a company like docusign to plan for the future when they're growth and they're not sitting where an apple is or an amazon is they don't have the cash treasure chest >> way to bring it back to the way we started the block great point, s.g when we come back, we'll talk

some dividends eyeing some big outperformers who keep hiking their payouts. is it time to trade or the fade those names? we'll get those details ahead. plus, tesla started the day all charged up after that bullish call from ups. the batteries seemed to fade as we got to the close. we're going to kick the tires on that trade don't go anywhere. "fast money" is back in two. reason, or fun. daring, or thoughtful. sensitive, or strong. progress isn't either or progress is everything. what happens if you ever need to miss work for a long period of time? why would i miss work? i don't know. you could sprain your ankle, throw out your back... get hit by a school bus. or a regular bus. get kicked by a horse. fall off a ladder. bathtub mishap.

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welcome back to "fast money. shares of tesla get a boost at the open but they lose their charge into the close. analysts forecasting more than 50% upside for the shares, saying the company is well-positioned for growth and profitability in the years ahead. julie, do those levels look attractive to you? and more specifically, to their point of locking up supply chains in a way that rivals haven't been able to yet >> i think it's true that they have actually been able to be quite impressive relative to their supply chain and keeping things moving along. but it's still valued incredibly richly i'm a very simple-minded person. so i just looked at some of these car companies market cap relative to the cars they're going to deliver if you look at tesla, market cap relative to cars they're going to deliver, it's about $400,000 a car. if you look at ford, it's about

25,000 if you look at bmw it's also 25,000 if you look at lucid, it's $2 million. i agree, you should pay for growth, right? but there is a limit to valuations and at the end of the day, this isn't a software business. it shouldn't trade like one. they still have to bend metal. they still have exposure to interest rates they still have exposure to the consumer so i don't think any of this valuation makes any sense to me at all >> steve, one of the things ubs points to is backlog and two gigafactorys just getting started. how do you buy tesla and operate within any kind of recessionary playbook at all? >> yeah so, we've been having this debate on the desk ever since tesla was a stock. it's a battery company it's a technology company. it's a software company. it's not a car company and you're buying elon musk. so every time you sell tesla, you're selling elon musk and that's not a position i want

to be in but when tesla came on the scene, carl, the only competition was the toyota prius. that wasn't a very sexy, attractive car now everyone has an ev so the competitive landscape has changed for tesla. but just as you started this segment off, no one has mastered the output no one has done what elon musk has done so it's still a bet. it's very rich, no doubt but if you look at -- trading more on twitter these days than it is on ev or anything else twitter in the last three months is up 16%. and tesla is down basically 14%. so i think the more that story plays out, it's trading more on that than an ev space or a software space but i wouldn't bet against elon musk ever. >> guys, an earnings alert on stitch fix tonight shares adding to the losses after the close after reporting results for fiscal q 3

the company confirms the report from cnbc.com that it will cut 15% of its salaried workforce. also forecast revenue could fall as much as 15 in the current quarter from a year ago. bonawyn, interesting situation they're looking for a q4 charge of 15 to 20 million on the layoffs. >> yeah. so this is kind of where rubber meets the road here. and i don't understand we talked about it with docusign you cannot be bullish this market when you still have double-digit after market moves on the back of earnings. it should not be a surprise that companies are slowing growth, are slowing hiring this is a company -- and if they are, you're going to want dividend or you're going to want some type of earnings that support that this is burning cash, doesn't produce earnings, and they're having growth scares here. so i think that's kind of the perfect storm, emblematic of what we still have to look out for, the time bombs that are still in this market. >> and the liquidity that we're dealing with in the markets overall on some of these moves

we're just getting started here on "fast money." here is what is coming up next >> right on target the retailer hiking its dividend by 20% so one other dividend darlings are we scooping up a game of trade it or fade it is next plus, netflix is really running up that hill the struggling streamer under pressure but could they be one acquisition away from the top spot the details ahead. you're watching "fast money," live from the nasdaq market site in times square. we're backig aerhi rhtft ts.

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out today's rough session on the street the dow drops more than 600 point. s&p and nasdaq down more than 2% investors are waiting some key inflation data out tomorrow before the bell. meantime, moving on, target raising its quarterly dividend 20% to $1.08 from 90 cents the move comes days a telephone big box retailer warned of weaker margins target has raised the dividend every year since it went public in '67, last year boosting it by 32%. so is target hitting the bulls-eye here guy, how can you do this and not be comfortable with the back half? >> i think that's a great point. in the course of three weeks, they've laid two major tape bombs on us. the last one, although stocks sold off, it actually traded pretty well. if you want to give target the benefit of the doubt, you know what it's just one quarter, they whiffed a little bit but other retailers whiffed as well, specifically walmart, you can make a case on valuation

this is as attractive as the stock has been if they're not that confident, why are they raising the dividend, the back half of this is valuation is compelling for a name that i'm giving the benefit of the doubt to on a one quarter miss >> often called one of the best in class in terms of retail. target of course not the only name to consistently hug dividends. several have proven to also beat the market over the long-term. our friends at cnbc pro ran a screener on some of the names. we thought this would be a good time to play a political became of trade it or fade it that's right trade it or fade it. elite dividend edition let's dive into the trades unp. raise the payout 14% over five years. shares nearly double in that period compared to 66% the s&p julia, a big part of the discussion early in the week was the operating ratio, maybe tougher to beat this year. how do dividends fit in? >> you know, i think for investors that are concerned about the long-term picture,

companies like this have structural protections around them, that have a lot of earnings durability, even if their operating ratio is a little light here and there, generally speaking this is a business that executes really well it's solid i think it's a pretty compelling business if you have a long-term focus. >> bonawyn, your view on these i guess rails and transports too at large. >> good point. this is kind of like the best house in a neighborhood that i just don't really want to be in right now. at $6 billion of free cash flow, it's hard or the me to really argue why i wouldn't this company. maybe i prefer a little bit of leverage there, but what it really is i'm concerned about the economy. i think the fed is as well and i don't really want to be in transports i prefer this instead of the trucking space but this isn't where i want to be deploying capital >> all right morgan stanley 3.4 yield shares up 80% over five years. guy, what would you do with that mess interesting stories. they have moved to asset management

and how does it fit the picture and financials overall >> they've gotten themselves in to three very distinct businesses good for them morgan stanley has become one of the better operators i know you don't play this game, nor should you, but trade morgan stanley. it's sold off enough valuation is compelling. i think they've gotten themselves into the right businesses at the right time, although i think the broader market goes lower. not that morgan stanley is going to be impervious to that i think it will weather the storm. i like morgan stanley right here. >> steve, your thought and of course bearing in mind that it won't be too long, a few weeks before the bank earnings start rolling in again >> yes so i'm going to be a fade it on this one so think about how you started out the segment, carl. you said these are dividend payers so the dividend yield on this is 3.45%. and the year to date performance is down 17%. so i'm going to need about five of those dividends to make up for the money i lost in the

actual equity nonperformance so they got into asset management the market sold off. so they have less assets to manage if i think we're going into a recession, i don't want to be in the financials so i'm going to stick with fading >> all right lockheed, 2.5 dividend yield up more than 50% over five years. bonawyn, you talk about your concerns over the economy. is defense a different story >> defensive, defensive, defensive. we talk about the consumer if there is one consumer i'm not worried about it's the u.s. government 16 times forward earnings. i'm going trade this one >> steve >> yeah, this for me is not only defensive, it's defense names. where all these supply chain hiccups go away, if you look at lockheed, where we would have to spend a lot more, what we learned from a russia, ukraine is where we were lacking in defense. so you're going to have to beef up whatever side of the aisle you're on. we don't want the get caught without the proper defense

so i think the whole group is attractive, although lockheed looks the most attractive to me. so i'd trade that one as well. >> all right last but not least, all state. 2.6 yield. rallies more than 45% over five years. guy, your thoughts >> q, i know you're watching a ranger game tonight. and you can't bat your eye without seeing a commercial for insurance companies, which says to me they're making money hand over fist. and allstate i think rates continue to go higher you probably have 35% eps growth trading at less than ten times next year's numbers. recently off the all-time high i'd trade allstate right here. >> all right, guys we do have a news alert out of the white house. a senior official says they do expect for tomorrow's cpi data to show continued impact of russia's invasion of ukraine on food and energy prices as well as spillover on supply chains. it could suggest the report is worse than expected. but we've got about 15 hours until we find out for sure coming up, is it time for

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welcome back to "fast money. netflix and spotify under pressure again today but maybe they're better off together a new op-ed on medium poses the idea that netflix should buy spotify. it comes a day after speculation that netflix was maybe looking to acquire roku. a portfolio manager at clockwise capital. james, good to have you. thinking about spotify's investor day earlier in the week and some of their long-term targets which are totally faang like >> it's really entirely up to him. but the thing is netflix needs help for investors, they have to view it right now as a legacy media asset. what made them so successful so fast was the fact that they were the only alternative to the cable bundle i know that everybody is doing

the same thing, that point of differentiation is out the window and subscription fatigue is a real thing right now for a lot of consumers and with switching costs so low, the only way to increase or to build a great subscription business is to increase the customer utility over time now i think that with spotify and netflix, you saw two sets of problems for the price of one. netflix has a growth problem spotify a churn problem. by reducing churn, you can increase customer lifetime value. you reduce customer acquisition costs and the increase lte to kak, i think you transform it from a discretionary asset to an increasingly indispensable one >> i was thinking the way in which the company got dragged into monetizing pass words it took years for them to come around on that do you see them -- >> sure. >> have they given any indication they would be open to any of this size >> no, no, they haven't.

but s but they have to do something. if you read "the new york times" interview a week ago, it was fascinating interview. but the one takeaway that i had is that they are fully content with the status quo. and if you're going keep doing the same strategy, the same strategy mind you that every single other media company is doing, you can't expect a different result and they need to do something. >> so in the end, if this were to happen one day, does spotify become more video oriented or does netflix become more audio oriented >> i think both. i think that there is a lot of content opportunities you can explore across the board you know, the video components with podcasts could be a big thing. and obviously, think about the marketing efforts where you can promote your shows on audio and podcasts and things of that nature the songs that are within the shows. so there is a lot of capabilities to keep people on the platform the problem for all of these streamers is that the switching

costs are very low i can turn on and off my service when stranger things is on and when it's gone so how do you increase those switching costs? you have to do something and you have to make it a differentiated in some way i think together it can form the most formidable global competitor the youtube >> fascinating theory. appreciate your time as always good to see you. >> thank you. >> let's trade this, bonawyn whether it's roku or spotify, why are people talking about them needing to absorb something new? >> listen, that's a bold call and i respect it you get a lot of analysts that kind of want to stay within the mean or median and not veer one way or the other so i respect the call. my question would be what about user generated content that seems to be a lurking competitive framework out there. how does this address that i think when you think about youtube, and you mentioned competing with youtube on a global scale, that's kind of a linchpin of their business model. and it's not clear to me how this acquisition necessarily

addresses that >> yeah. julie, your thoughts compared to a theory or a game situation like this, i mean, for the time being, they're being much more tactical, aren't they? >> yeah, i agree and i think user generated content is exactly the problem i don't think it's youtube, though i think it's tiktok. if you just look at down loads, that's really what's running away with everyone's attention and if you're like a goldfish like me, it's pretty compelling, i have to say. i do think there is something to spotify/netflix deal and it's true. in the old days, netflix was able to buy content way on the cheap because they were the only game in town and they gave content creators total creative freedom and now they're not. it's expensive to create content and now there is too much content. i think being able to diversify into different kinds of content, using a very, very strong algorithms that spotify has, it's a better and more co compelling business. >> you know, guy, one sort of

parlor game on the street right now is trying to see which streamer would really rein in their budget first, because it's very much a game theory situation. there is no guarantee that if you rein in your budget, your rival will or won't. and in that case, that's where you end up losing subs more than ever >> that's right. >> i love parlor games i'll say this. this is probably a $30 billion deal netflix doesn't have a balance sheet to do it they're not going to use their stock at these currencies levels to do it spotify shareholders would be what this was a $350 billion stock in january of 2021. we're not going to go for this it sounds great. it ain't happening all said, netflix is as compelling as it's been in quite some time. >> interesting we can see year to date, down 68 pretty unbelievable. coming up, stanley druckenmiller takes the stage at this yeas ner'zo conference. we'll get his thoughts next when "fast money" is back in two. because you've got the next generation in global secure networking from comcast business.

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don't miss complete coverage of the hearings on the january 6 attack on the u.s. capitol 7:00 p.m we'll have the news with shepard smith, and then at 8:00 p.m., shep sticks around for our special wall to wall coverage. you can watch it all right here on cnbc. we're getting some news out

of the sown conference where stan druckenmiller has been speaking hey, leslie. >> hey, carl druckenmiller offering some pretty dire predictions about the economy. he said we've never had a soft landing after inflation has gone above 4.5% of course, annual gains in cpi have been nearly double that figure, and economists are expecting that to be the case with tomorrow's read >> there is so much wood to chop, and there has been such a broad of going into it it's very hard for me to say the probabilities favor a soft landing. indeed, i think they aggressively point to a hard landing. >> he thinks the recession will come next year in 2023 as for how his position to portfolio to account for all of this, he says it's been a lot of shorting druckenmiller said he's made some money by shorting fixed income, sitting out currencies and owning some key commodities, particularly in oil. however, he said he is pausing his shorts

>> i've lived through enough bear markets that if you get aggressive in a bear market on the short side, you can get your head ripped off in rallies so currently i'm coming in every day, and i'm looking at my screen, but i'm pretty much taking a break >> druckenmiller says he will be going back into that short equity position, quote, at some point if the market affords me carl >> fascinating, leslie thank you. let's trade it, julie. i see you nodding your head. what do we make a stand tonight? >> i agree it's really hard to imagine how we're going have a soft landing. we all want a soft landing i wanted a soft landing when i delivered my kid and it didn't happen it's really hard to make that happen but i think, you know, it is a good economy and it is a solid consumer, which should help insulate some of the shocks. and i'd rather be trading in the u.s. than the rest of the world. but i still think it's going to

be very hard to execute that >> steve, this note about being aggressive or not aggressive on shorts, is that instructive to you? >> yeah. i think people -- carl, whether you're long or whether you're short, people get so convicted in their belief that they think that's the only strategy or premise that's actually going to work but shorts, you always learn and when you enter the equity markets, you have unlimited risk and they say that for a reason if you're long, it can only go to zero. if you're short, as he just said, you can get your head or face ripped off. this is something where you don't want to push your winning position a little too hard and anything can happen in the equity markets >> we'll keep -- leslie will keep us honest what comes out of sown later on. and tomorrow as well let's move to nxp, stock jumps 4% on reports samsung could be planning a takeover bid.

this news sparked quite a bit of interest among options traders mike khouw is here to break it down. >> definitely fueled some activity nxp traded six times a lot of that is in calls that expire tomorrow. but if we look to next week we also saw that the june 200s were active over 1240 of those traded for .40. risking a little over 1% on a bet we could see some follow through to the speculative upside we saw in the stock today. >> mike, appreciate that bonawyn, your take given what we know about the environment, people looking for growth, companies still have some currency to deal with, valuations have come in, do these things -- do these types of ideas make sense? >> i think they're credible. this is the the environment where if you do have currency and you kind of have that treasury chest, you with look for mna because you're able the do it and acquire a company at a

pretty attractive valuation. but pretty timely in terms of why this is why you don't lean into shorts too heavily. at least if you're going to do it, cover it with a call so you're protected on the upside huge interest in chips in the auto market. tune in to the full show tomorrow, 5:30 p.m. eastern time coming up, the deal book conference is under way. wait until you hear what howard schultz of starbucks has to say about tariffs with china oscoen a cinthe mmtsreomg up next

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another news alert now a short time ago at the deal book conference, andrew sorkin sat down with howard schultz of starbucks. one of the subjects they talked about was u.s. tariffs with china. >> china, just like the u.s., needs a positive working relationship with the united states, and we do with china now with regard to the $360 billion of tariffs that trump put on, it is beyond me why the president of the united states does not lift those tariffs today.

now that is not the answer to inflation. but inflation today is very different in terms of the cause and the effect of inflation in the past this is a global issue >> let's trade it, guy yellen today did confirm the white house is at least considering reducing tariffs on chinese imports. but why are they tormenting us like this? >> why are the politicians tormenting us? because that's what they want to do. >> they do or don't. every other day we're thinking about it >> i think, listen, not being a politician, they're probably licking their finger trying to figure out if that's politically expedient or is it going to not play well to their constituencies i don't know what i'll say is a couple of things howard schultz one is talking his book starbucks reopened 600 of the 940 starbucks in shanghai. so clearly they have an ax to grind there. number one, i totally get it and i think there is some truth to it. i do think he believes that.

politics notwithstanding i'll say this in terms of starbucks quickly. stock is down 40% from its all-time high this time last summerish. i think starbucks is actually a pretty compelling story. traded actually pretty well today. and now you're sort of getting away from the zero covid in china. i think you can buy starbucks here on valuation alone. >> steve, i asked cramer about this morning you look at the fxi has done over the past month versus the s&p. why wouldn't you take a gamble on nike, starbucks, yum china given the reopening? >> yeah, i mean, i've watched alibaba with those price swings. everything that you've just discussed, if you look at -- first of all, when you talk about -- i'll bring you back really quick to tariffs. it's probably not a position that president biden wants to take ahead of the midterm elections because no one wants to be seen as soft on china. these were unfair trade

practices and intellectual property theft that's at the root of it number one number two, just trading those names you just said on china reopening, to me is a home run alibaba specifically look at that price swing look at yesterday's rally. look at the way it pulled back a little bit here. if you can get any substantive rally or any substantive -- anything other than zero covid policy out of china, everything china-related is going to rip higher to your point >> we'll see if they come around on some of that stuff. we'll get more on that interview "sawrrow morning on quk box. when we come back, your final trades

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it's time for the final trade. let's go around the horn guy? >> higher rates means insurance go higher. not allstate, but prudential >> julie >> i like insured tech businesses that support insurance companies. so duck creek technologies >> all right steve? >> for all the reasons why i said i loved lockheed martin, i'm going switch and go with northrop grumman same sector, same type of chart, on fire.

northrop, buy. >> bonn wine. >> a buy a few weeks back. three times, hyg continue to be a sell other after that one. >> we're going watch that closely. finally, a one stat about cpi. three headline cpis have come in below expectations in the last two years. we'll see what happens tomorrow. thanks for watching "fast. my m make you money i'm here to level the playing field for all investors. there is 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 edition a west coast edition of "mad money. welcome to cramerica other people want to make friends. man i'm just trying to save you money. anion is to entertain and to teach you and try to put this part in context be