back down. those held. so that sort of price action can be something that can bring some buyers in off of the sideline. you could see early money but it's focused. so i don't think you want to dive in just yet. >> gotcha. shawn, appreciate the time today. thank you. all right. that does it for "overtime." "fast money" begins right now. >> right now, crude tumbling nearly 8% for the first time since early may. we'll hear from the top energy analyst who said the price could fall to $65. plus, one economist said we

could have mary ti this summer. ahead i'm melissa lee. this is "fast money." we start off with that dollar move, 20 years in the make. the euro falling to a nearly two decade low reaching parity. it falls below zero for the first time in three months. oil price closing below $100 for the first time since mid may. check out how it played out in the stock market. the nasdaq rising nearly 2% so. what does this tell us? >> it was confusion. i think the outperformance of the nasdaq is saying something.

so you had a good old-fashioned rotation. i'm going it take stock of all the things you mentioned. think about this. we had crude. the 10-year treasury and the nasdaq rallying. the flip side we have that move in the dollar. that's something we'll hear a whole heck of a lot. then that yield curve inversion. the last three times we've seen that, we've seen recession, bear markets. the last one. look at the bank stocks. the money centers made 52-week lows. there's a lot of cross currency. some of the names had been so pressed down into this holiday week or so. it makes sense to relieve a little pressure there. i think we'll continue to see rotations. >> take a look at the move in

the dollar, ken. that tells you this effort to provide price stability is good. that's what the fed wants. that helps them in doing that. so maybe they back off a little bit. >> the dollar is a major force to take on inflation and it's certainly another one of those forces out there. we came in after a nice long weekend to see decimation in the energy sector. biden talking about tariffs. the dynamics participated what he's trying to do in the mortgage market. the administration has to do everything they can. what you're seeing here is the same rally that we've seen over the past five days. this is the recession rally. yes, the yield is exactly flat as we close today and into today it was certainly when we

started it was a day of yields continuing to die but the positives are, you saw an almost 4% turnaround in the semiconductor, so i will mention that again. i don't think we're in a place where it's something we'll see but down 40% off the highs from really before we started the year on semis is a place where things probably got way overdone. i think there's a lot of positive in what happened today. it's in the a surprise that stocks are rallying in the face of with are lower rates. the assumption now that the fed will have to pivot. we'll be reminded of the fed's mandate. the market is doing a lot of the fed's market for them. today was the day when we heard that goods inflation is over and maybe this is a market where the labor is strong and

the consumer has a lot more power going into a row session. >> here's the central question, victoria, is your view of what the fed might do changed. >> i think he was right when he ousted the word confusing. look. there's concerns over growth and reception we get that. we've seen that from the pmi numbers. but we have this labor, this strong labor market. we'll get reports on friday, so i think the market is trying this decide do they want a good number or not so good number from the labor market. its it say financial conditions are tightening. the market is dog the work for the federal reserve. again, we keep going -- we're flip-flopping on everything. does that mean inflation expectations are no longer anchored. i think there's a lot of uncertainty. one of the things we have to

watch is the consumer. we talk about the consumer all the time. we have it focus on the high and consumer f you look at may, high end consumer spending was down. that's the first hadn't we've sewn that happen. we know they change their spending habit when their net welt changes. all of this together tells us we may have more volatility. if the fed changes, that moans more vol tilt as people decide what the path forward is. >> we got a glimmer of what high-end spending might be like with restoration hardware. as you view all of this going on and the banks hitting 52- week lows, the yield curve reverting, what are we seeing.

>> maybe being insulated. american express making fresh relative lows you're seeing it in different areas of the market. the bottom line is we will print another quarter. look at the tracker. i think it's predicting negative 2.1%. it was light in q2 of 2020. we didn't know what was going on. the average miss from that is 3 points. we will be talking about a, quote, technal recession when the numbers come out. that could be self-fulfilling in an environment where the consumer is already concerned. i mentioned american express. there's nothing cyclical going on right now. i may be talking my own book but i've been talking about

this value no growth. the move is definitely driven by rates but investors want to be in companies that are insulated. so that's how we've been positioning our portfolios. >> tim, i'm wondering -- we hear the argument particularly from investors and bank that the balance sheets of banks are fantastic that they do necessarily rely on the shape of the yield curve or whatever. intellectually i get that argument but they still trade on the yield curve. they still trade on the spread what is the case at this point for banks? >> well, i think it's a mixed story. if we really thought banks were confined, we would be piling

into banks. balance sheets are around the corner. we know the balance sheets are strong but certainly the trend right now for banks, banks want it pay back as much as they can. there may be some strength in the net interest income. and higher yields and higher rates are certainly great for banks. again, i recognize we've priced a lot of bad news no banks. to me we have not gotten the credit hit. i will say in you look at high yield spreads we're up to 565, 570, 580. this is level we vice haven't seen since 2016. young it's time to run for the

door. >> the lower they go, the more likely they will bounce out of it. we had hint of what they will be doing in terms of capital return. we saw them make new 52-week lows. car vanna up 50%. these are some of the worst stories. it gives you a sense of what some of the investors are looking for. i don't think anyone expected to see a this month the way it did. so to me this seems like a lot of chasing of names that are come pressed lower. >> all right. our next guest says we're in the middle of the perfect storm for the year. let's bring in data founder and ceo. so there's a lot to sort of walk through with this drop in

the euro. it does seem like the ecb is in quite a predicament and its on currency dropping like they are and bring the yield down. so what's next here? >> so the key focus right now and the reason why the euro is trending so poorly is because we have an energy crisis. today is perfect example. we talked about. we have a specific phenomenon and we used to have trade surplus. now there's a deficit. for the ecb it's a major, major challenge. it's the first time since the euro was created that they have

a challenge this deal w they haven't started hiking yet. so it's an extremely challenging situation that ecb is facing. >> the impact on the u.s. dollar and rates is challenging. jens, we saw a spike up more than a percent. we saw a drop in rates. if we see a drop in bonds, traditionally that has been an anchor. >> yes. so it is very often the case that when you have essentially global growth expectations going down, the dollar benefits. that's exactly what we've been seeing over the last several weeks and i have to say at this specific juncture, the global cycle is in trouble and different central banks around the world are trying to tighten

into a weak growth environment. that is really the key argument to be constructed on the dollar in a bearish environment. i think we'll probably see more of that in the next one to two months. we could even see a situation that the fed is going to relax a little bit what happens if payrolls are strong this year. what happens if cpi is inflated in the next reading. so this rally. if the fed pushes back, they will have to continue to push back. it's going to be a big, big issue. >> jens, let's play that out little further f they become more hawkish and they're unable this get the rates to move the

way they want, the currency to move the way they want, what is the worst case scenario. >> well, the worst case scenario is that we just have an inflation die familiaric, so before the euro is credited, we had what was perceived to be a credible currency and kept inflation under control. and that goes out of the window, it will be a huge problem for the euro itself and political problem and that will exacerbate the challenge to the euro. that's really the spectrum of possibility. it's a quite serious situation. >> jens, what's your forecast for euro dollar. do we break parity? >> yes. natural gas prices will be

elevated. i think it's realistic that we break parity very soon. if the gas continues to flow better, then we could see some relief. we're watching literally the natural gas flow hour by hour f this goes south we'll have a full blown energy crisis. >> jens, great to have you with us. tim, can you trade this out for us? >> well, and we didn't get a chance to ask jens about his namesake. at some point, again, you have central banks that don't have the kind of credibility. european banks, we talked about

our banks, it broke to fresh lows. the question really is for the mull toy nationals. i looked at some of the big names. it was about rotation, but i think this really is a case where those companies with the strongest international franchises are the ones under the most pressure. young we priced this into the upcoming earning season. we'll hear about it time after time. dollar strength is death for multinationals. i'm not going to play dollar strength. i think you priced in an enormous amount of mismatch and you have to be careful. >> the question is have companies priced in this dollar strength. they came out with a filing boo citing fx impacts.

imagine what the fx impacts are. victoria, how do we look at that playing into the earning season? >> they will use the dollar strength as part of the reason for their outlet bringing down those expectations. we've been waiting for expectations to come. they've been keeping them higher but those discretionary names are coming. when we talk about trading it, i agree with tim, i don't think you need to do a trade specifically on the dollar strength. i think we could see this turn pretty quickly, especially if we get the ecd raising rates. i they there are a lot of fierce with the change we've seen, the direct meetings we've had over the last ten days or so where they will continue to see it with natural gas.

so i think you need to be careful. we're short those names. i wouldn't make a trade on it and i wouldn't sell. you should continue to hold because of the strength of the balance sheet one way it trade could be consumer staples. you look at the xl. you note big names. it's proctor. it's coke. it's pepsi. they were make all-time highs a couple months ago. that's when the dow was hanging around 100. i think you will see them guide lower. if i'm looking at the xl. right here 73, a double bottom of 68. so xl seems interesting to me. coming up, a check under the hood. could there be a u turn coming. plus a huge drop in oil.

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quarterly sales missed analysis expect tailings. tesla starting the day deep in the red. you're watching ford. >> it's not a stock you want to own. we have slowing wage growth. we have inflation, lower purchasing power. we're seeing it in confidence numbers. there's a whole host of things going on. even when you get good news, we heard from car max. their sales were up 21%. you mentioned the chart and ford. $10. that has been a key level for a

long team. if you go back to 2010, 2011, it will support. it then became resistant. we're right back down this that level. five to six times forward there was an interesting some of the i like what they're doing with their ev spend out to 2026. i understand there are challenges with semis, production and all of that. >> did tesla go up because the growth went up? >> probably. it wasn't trading well right out of the gate, mel. i note production numbers were decent but they will not be good this quarter or at least this month. they talked about shoulding down those money burning furnaces. i don't know you had that helps the story. i know you're looking at me. >> the money burning furnaces.

>> well, he called it that. >> i was clarifying for the readers. >> so they're doing. that i don't know how the q3 will be much better than q2. we're keep hering about some of these incumbents really going after. it i don't have a position. why like this story. jeff just talked about the chart in ford. think this $600 level is massive going back a year. >> i understand the incumbents going back after the market share could be a problem for tesla. i fully get that. but it's in the an easy road to go down with ford in terms of preserving margins. there's in margins. it's not easygoing for any of these companies to compete. >> although everything we're talking about on tonight's show is positive, everything from

copper to metals to energy prices. they came out, unless we don't believe companies anymore, they reaffirmed 650 to $750 a share. if we have oil prices into gasoline, i think those things are incongruent. in terms to communicate with what's going on with their business, so for they told us this is company they want to own. >> there's more to come. >> recession fears continue to grow but how much further can crude crumble, the details next. plus, speaking of recession

fears, a big warning from the bond market as the yield curve inverts and one group is feeling the pressure. you're watching "fast money," live from the nasdaq site in times square. we're back right after this.

crude closing below $100 a barrel for the first time since may and citi calling for more downside. they said it could fall it $65 by the end of the year. let's bring in edmore ris, global head of commodity rich.

ed, great to have you with us. so it's a bear scenario. what do you think is the likelihood of that scenario? >> the likely odd of the scenario is growing as the row session is growing. i guess the experts call it 38% on average but there will be one. we still think the market will be week and we're calling for prices to go down to the mid to high 80s by the end of the year. >> when you say a recession, i'm assuming you think u.s. recession. what does this look like if it falls into a recession with the euro plunging to 20-year lows guess the dollar? >> if the world as a well goes into a recession and looks like it's moving that way overtime we look at the recent macro

data, it would appear that commodity prices tend to go down to whatever the cost would be. that gives us the $65. at that level of demand versus supply, that helps it get into balance. we're seeing selloffs in the grains and they're all well below where they had been at the end of the quarter. it's a function in part just of high prices. >> hi, ed, it's victoria. i understand the price of oil going down from a larger macro perspective if we go no a recession by struggle with not having enough supply. we look at opec. it's in the enough to have a

substantial or meaningful addition. we have china coming back. so it feels like our supply side of this equation is still going to struggle. so even if demand comes back a little during a recession, it should pop back quickly. how do we keep oil prices from shooting back up. >> you need to look at the whole supply, what's coming in various parts of the world and what might be happening with russian supply and with iranian supply. it is true in the opec plus countries go through with their projections of where they will be in september, there will be something like 2 million barrels a day. that's low compared to where they've b it's also the case we're seeing increases of supply from canada, from the u.s., from brazil from other

places around the world. we're look at 2 million barrels a day plus. we're looking at over 2 million- barrels a day of nonopec production growth. that plays against our current outlook for the 2.4, 2 money 5 million barrels a day of demand growth. we're seeing an incredible buildup expected on the inventory side. that's a critical number. we're already seeing that inventory grow in terms of product. we've had more than a month worth of diesel supply. we've had two weeks of gasoline demand showing inventory b we're seeing a significant supply response as well as a demand response. it's the balance between the two that makes you look at the

opec capacity number. opec has to think about cutting production to keep prices from falling. >> ed, when you look at the decline in stock prices, i won ger if you think this is had lasting decline. i thought it was an issue of crops weren't being planted when they should be because of a war going on in the bread basket of europe. doesn't that impact next year's crops. we play not see this decline last very long. >> you never know what will happen from one year to the next. russia is having a bumper crop. they will be selling it no matter what happens. it's looking better. it looks like the southern hemisphere crop come nothing our summer will be more than okay and even with chinese inventory builds, there's

something about the near 50% drop or drop in wrote prices from the peaks that we have in the fall. clearly some of this has to be looked at with a little bit of skepticism. we're in a very low liquidity environment. that might have some exagation on it but the market has gotten much more complacent, much more satisfied that supply is there and not just the commodities, but the metals as well. natural gas going down to 550 is fare market value.

>> $140 for crowd and ed morse says $65 for crude. what camp are you in? >> tigers and leopards don't lose their stripes on both sides. sides. ed morse has been doing this a long time. i'm not sure demand falls off a cliff. the president of uae said it public but top france we've got zero swing capacity. we think saudi's got 150. there is in the that much. u.s. is down probably a million barrels a day from its peak. i think there's a floor at 550. at some point you have support. i think the change for the demand, i think this is

consumer that's adjusted their demand habits in the because they have to but because they want to. i think that will be different. it's already been priced in. so i guess i feel the lack of investment is something that's with us for sometime. i would take the over rather than the under. >> jeff? >> like tim said, ed knows more about oil than i do. there's a 90% chance that oil remains above $75 through 2023. it's a timely long. it's the first time in a really long time you can see energy is oversold trading above the average. 20% is the cutoff there. so certainly oversold. the valuations aren't that demanding.

i think you could be early here but at the same time maybe the most important thing is that credit in the energy space remains very well behaved so. that tells me the bond market believes energy prices will remain high enough to support the fundamentals of the energy sector. >> coming up, as the key recession gauge goes up, it's putting pressure. can you trust the row bound. we're breaking down the move when "fast money" returns. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create

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to receive fifteen hundred dollars off your kohler® walk-in bath. and take advantage of our special offer of no payments for eighteen months. welcome back to "fast money." a warning that a row session could be around the corner putting pressure on the banks. i don't know, victoria, how do you feel about the banks these days? >> at the very beginning of the year, you probably don't remember but mine were jobs. jpmorgan and bank of america. the middle of january i was

feeling good about those. i haven't been feeling so well about that lately. so we we look at the financial sectors as a whole, it comes when that two to ten year is below that basis point. we're flat but look at where bank loan balances are. ten years ago the mortgage of the majority were mortgages. now they're credit cards, auto loans. you look three months to two year and you have about 100 basis points there. i like the financials. the balance sheets. they're raising narrative dent, but we have to admit there will

be tremendous volatility until things start doing better. i think you have to be very choosey. bank of america, the retail banks, goldman sachs. the o and s. >> o'reilly and shock wave. bear activity in one name. mike, what did you see? >> we're looking at essential lit marquee bank. jpmorgan traded 1.2 times. that wasn't as interesting as what they were trading. the june 2023, 75, we saw over 3700 of those trading. the reason that stuck out to mow because the level, the 75 strike is well out of the money. it's below the level we saw if

march of 2020 if the early pandemic decline. all right. thanks, mike. for more tune in to the full show friday. coming up, it's been rough year for caterpillar shares. he will break it down. today's growth stock probund a good sign? why you may want to think save. don't go anywhere. "fast money" is back in two. lemons. lemons,

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welcome back to "fast money." the nsa nasdaq is back. our next guest warns the comeback is on borrowed time and believes the best place to invest is halfway around the world. dan, china is the only place you're constructive on. >> well, hey, melissa, i don't know if that's the way to put.

it we've been seeing some pretty good opportunities. in this environment where profits are, that's near the market. we've been very positive on but if you lock for things that are bucking the trend, things with a lot of positive upsite from here, china sits in that camp. if you think about our process, which is about profits, it's almost the polar opposite. yes. sentiments are bad. you see the first signs there may be signs of bottoming, which is critical and that's the opposite of what you're seeing. >> if we think there's going to

be a recession, are we still positive on china? i'm hinking about the u.s. and europe. >> absolutely, melissa, if we're in a global slowdown, this is not the time to put pedal to the metal. this is the time you want to be prudent, take down your overall risk profile, your beta. if you can find the diversifying as set it's a great time. you could have this environment where, yes, things are slowing. they could be on the precipice of a bull market so long as the profits, you see some carry through in the profits. >> hey, dan, it's tim. so talking about some of the high multiple tech stocks we

paul know have been at the center of the storm. you've got names like zillow, crowd strike that are up from 40% to 80% off of their lows. the dynamic, markets getting ahead of things, any places you can be constructive a crowd strike that has 35% cash yields. or is that something the market will not touch. >> broadly, i would say, you gnome, it's a kind of do not touch story. whatever company you want to pick, whether the cheapest companies, the one with the highest quality companies, the one thing they have in common is they benefit tremendously from record liquidity. it basically create as bubble.

as the bubble deflates, the fact they benefited, there may be pressure from that. i think this will continue. if you think about the environment today, if we are going to see signs of a bottoming of profits or seeing signs that liquidity will get pumped back into the system. profit growth will continue to slow and liquidity will continue to tighten. there's in the a good environment to be jumping into the speculative bubble stocks. the things you were talking about, what do they have am common, it's all about liquidity. it's a sign of tightening liquidity. the strong dollar up 50%. a sign of liquidity, you're seeing that in the market. tightening liquidity is not going the right direction. that's a big negative.

>> dan, thanks. dan suzuki. >> thanks. >> i think all of that makes sense. at some point, though, some of the bigger names, tim was mentioning a bunch of stocks that no doubt benefited from the liquidity but will the of the stocks have lost 70% to 80% of their value. maybe that doesn't matter but why are we sitting here looking at the five names in the nasdaq that make up 35%, 40% and they're only down 25% or so. they are going to be impacted or maybe they have already of that kind of earning deceleration scenario but the management and all that sort of thing will keep them buoyed. i don't think what the fed does or doesn't do over the next year is going to really impact

it. i'm perfectly prepared this buy them lower. i look at a name, even meta. i was talking to a friend. really. the stock fell 60%. i think there's a lot of that sentiment where it's within 10% to 20% of that being over. >> coming up, caterpillar inching lower, more than earning. shares dropping. one trader said there could be more pain ahead. we got the details when "fast money" returns. a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. ♪♪ age before beauty? why not both?

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welcome back to "fast money." caterpillar is down. so should cat and deere be thought of as good safety plays? jeff, what do you think. >> if you look at transport, year to date they have outperformed. to your question, can you look at safety in those names, i think the answer is no. in cat, the 30-year chat, on

cue. the shorter one breaking to now one-year low the. you can look at cat, deereunp. i think these are your new underperformers from now until the end of the year. >> victoria? >> machinery stock has not been performing well. names like he tis and couple mins. for now we're avoiding those names. >> up next, final trade.

time for the final trade. tim? >> in megacap tech of all the big boys and girls, amazon. >> victoria. >> we this military program services spending will go up.

i know this is "fast money." >> jeff mills. >> play a little defense with cigna here. the chart looks good. i think it holds welcome to mad money. just trying to make some money. my job is to teach you, call me or tweet me.