infrastructure act that was passed late last year. a lot of those have just started. they will continue to start into next year. we like the fact they have that visibility. >> yeah. they do seem to. that stock, even when they went down something like 24%. ayako, i appreciate your time today. >> thank you, mike. >> that would do it for overtime. fast money picks it up right neck now. ♪ ♪ >> write back now, it is tumbling. more than 4%. it is falling almost 1300 points. it is all about inflation's stubborn grip on the economy. the fed will have to pull up interest rates at next week's meeting. we will break down what is next straight ahead. a major strike just days away if the white house can't get union workers to reach a

deal. we will go inside the ripple effect. later, drilling down on the energy trait, how crypto handles the trade off. be brutal trade. tonight, -- welcome, julie. we start off with a major turning point. june 2020, 10 of the 11 now in correction territory. it is showing that it rose in august, despite the drop of oil prices. food, medical care, all higher than in july. the harsh reality that if that give it -- it is not coming anytime soon. they are expecting a 100 basis point hike at the meeting next week. now, nearly 3.8%, its highest level since october 2007. what is next for the market? where do we go from here?

that pivoted. a lot of people were holding out hope. now, it is just couplet? >> yeah, it is. it was here tuesday morning of last week. wow. this feels like a totally different thing. this is not what i expected at all. are they a little cooler? are they meaningfully cooler? clearly, that is not the case. i don't know if the next cpi report will give any comfort. i really don't know. you obviously, no pivot for short. is it possible 100? i don't know. i don't think they need to do 100. they can do 75, 75 again. i am kind of surprised. it goes on a lot of points.

they went up, but they didn't seem panicky. i like when it feels like they are just puking things out. we are not there yet. >> yeah. the last week of august, we saw a huge spike. we didn't see that spike today, julie. we all thought it would be okay because they have come down so much. everything else went higher. >> yeah, i think it was pretty surprising to see how much it went higher. also, seeing the categories continue to climb. we don't get to undo that very easily. it would not just simply be -- it is hard to see how we will have and to end in sight if we continue to have the sticky categories continuing. >> it when i do it all for us. especially when electricity, the price of heating your home, all of that is going higher. it will be winter and called out very soon. i am wondering, karen said it

could do 75. most people thought 75 most week anyway. then introduces a whole new dynamic. it would start easing off of the hikes after that. >> yeah. if they do 275 in a row, i think that would be a mistake. despite what the cpi says today, we have seen wage prices go up, unit production costs go up. those are things that don't change. we'll talk a little bit later about some strikes and whatnot. everybody is asking for a wage increase. that is what will keep the demand up. not only that, on the energy side, we are coming into winter. we did see a little bit of demand when gas was over five dollars a barrel. it is really easy to decide not to drive down the wallet worth. it is hard to decide not to

heat your house, unfortunately. they will say, hey, by the way, we are -- i have only been doing this for 30 years. i haven't heard anyone take a big order and let the world to know where they will buy it. they want $90-$100 bread. you will not get a relief in that. the problem the fed has, they have raised almost 300 basis points in less than a year on engine economy that is highly levered. i think that is what the market is just starting to rise in now. >> it does seem that. there all the people out there who think the fed is caught on the backlit. they have another feather in their cap when it comes to that argument here. >> yeah. the cpi, as we know, 6.3%. if you go back to february 2021 -- we have been funny on fast money, maybe this is and to 18 month her. we have had 15 over that, too.

we haven't had that for 20 years. as we have been talking to it here, the broader persistence of where the inflation pressure is coming from, i think we said two things, the market is already for another inflation pivot. i had to say, i thought that headline number would be a tail end. i said it. i said they would be something that gave this cpi number -- karen brought up the other really important point. all of the work coming into this number, where we go, and the same thing with interest rates. that was a 6% move into the cpi point. we are back in terms of interest rates, think about the meeting, that was the last real kind of breakout move in rates. then we spent the next three months retracing most of them move. let's see where we go. inflation is obviously not going away soon.

we talked about this yesterday, too. this is your peak from 4:30 in just one day. i think we probably retrace some of this in the next couple of days. >> karen, we said at the top of the show that it was a dramatic turning point. would you agree, it feels like something changed today, in terms of how the market perceive the path? >> yeah. i guess it is sort of thinking about, okay, the fed has these tools. do they address these issues? right mac. you could destroy some demand. some of these more structural things, that is a lot harder. you go, okay, you have to think about, does the fed give up on the 2%?

>> i don't know. i don't know if they should do that. we have a long way to go to get there. i'm surprise. >> i think the thing that is really challenging, it is not just a case of the interest rates being higher. that is a tool that they can be using and thinking about. we have never than this. this is to experiment that has never been done. longer terms, what we have said is dependent on what the prices do. >> it sounds like, julie, you would be in favor of let's just see how this unfolds? >> i think it makes sense to the data dependent, like they said they would. i think it is hard to set up these long-range forecasts because we end up in a place, like we are now. i think it makes more sense to

not set a long-term course plan, but to take in the data. also, continue to use the other tools like unwinding the balance sheet. >> he is the chief investment officer of the advisory group. it looks like a beautiful day there, peter. good to see you. what do you think of this and what this means for the feds path? >> i think they will still do 75 next week. there is an interesting situation where the markets are really focused on the data they see right now in terms of commodity prices. some of the real-time rent figures that rate of change is moderating. they are seeing used cars prices slowing down. how it captures that. that is how we have this two lane highway with both sides going in opposite directions.

the markets are driving in on one side. unfortunately, the fed is also lagging in how they are reacting. overall, where rates go from here, whether it is 3 3/4, 4 1/4, i think after next week's rate hike, we will see this with the economy. the next rate hike will be the second time in 40 years that the rate will exceed the prior peak in a cycle. again, we are getting into treacherous waters, i guess, with this aggressive. >> i'm curious, if that is one of the reasons why the feds should wait. we don't know how this will impact the consumer.

from the consumer perspective, it is not just the stock market. it is their home price, as well. we don't know how this will pan out when it comes to the jobs market, yet. >> they are starting to say, yeah, we have had this incredible amount of tightening. not only in rates, but the stock market, as you mentioned. housing going down. we are just barely seeing the cracks in housing. if that comes down, people like they have less money than they did before. we don't know what that would do to the economy. i am on the side of peter here. listen, after the 75, the 75 might even be a mistake. we know there is a lag. we know they are sticking with inflation. leave it here. let's see what happens. be ready to cut rates at the economy comes down.

first, the stock market asked to decide that margins will come in i am earnings will be lower. >> we have seen a glimpse of that in trend by analyst at this point. i am wondering where we should be? i'm just speaking broadly here. they should've gone sooner, harder. it seems like a lot of you are little bit worried about the impact because we haven't seen it filtered through yet. >> that is fair. the credibility, lack thereof, over the last couple of years. maybe the last number five, 10 coppin --, in 2018. that actually turned the market where we stepped back in and begin the process. what we are talking about here is a fit that said something

unprecedented. this is a fed that had that july meeting. we don't know what the impact of the rate hikes will be. that led to a lot of this pivot. absolutely fair. we went from eight place where we couldn't raise it, let alone in difficult times in a global energy geopolitical crisis in a labor market that was nowhere near a strong four years ago. i go back to safety labor markets are the biggest problem for the fed. it is a really big deal. it is important for the country that the minimum wage has changed. that has only gone higher. unionization. pressure is only getting higher. you have a housing market that still -- i don't think 25 on the margin, whether it is 50, 75 or hundred next week will change the trajectory of and to economy that still has not adjusted this. i don't think they have

digested this. >> yeah. we are only adjusting them come in right now. peter, how do you think about equity valuations with this backdrop? >> obviously, we have rated -- that is typically the first. will we realize that earning? i think tim brought up a good point. over the last 50 years, you can have a pretty tight relationship with labor cost and the direction. based on the services, labor cost being almost 70%. at the same time, in the face of the slowing economy, you have further cuts in earning estimates at the same time.

i don't think they bottomed out. i don't think this markets ends with the 17 -- i don't believe it will be 15 or lower, which is a longer-term average in the last 20 years. >> yeah. it is amazing we are still stuck at 17. it has come in a little bit. julie, how do you think about where we are in the markets? i love it when people say, the stock is down 80%. it is down 40% from its highs. maybe it should never have been at that level? it is almost sort of -- i don't know. >> that is exactly right. it is in the name. it is a correction. it wasn't priced correctly in the first place. i think if you look at this, most of the economy, they have gotten to points that have made no sense. they were driven off the narrative, rather than true --

i think they continue to look expensive. i don't think we have nearly begun to do the re-evaluation's of the investments. they haven't really come out much. the supply train makes everything more expensive. fx has meaningful impact. not just the constant currency checking, but it makes our products more expensive are broad. it has and to actual real-world impact. i think that has not at all been filtered in to estimates. >> quickly, karen, we just scrolled through the technologies. apple resolved down about 19%. how do you think about the names that you known? >> right. >> yes. i love to say i love when things are dropping in -- it is

not the same. that is where it is kind of a trigger for me. as painful and scary as it seems, then i want to buy. >> too early right now. >> yeah. you are nodding? oh, peter, too. who thinks it is too early? raise your hand, please? too early? raise your hand. it could be tomorrow, though. >> it could be tomorrow! >> it could happen tomorrow. peter, we will let you enjoy the day off. great to have you. if it can tomorrow, tim, is there one name that you would scoop up? >> i was giving you my royals wave. it is not as simple as saying it is too early to buy. i think there are companies like google, like meta, like

apple, like amazon. you should be building a position here. i don't think it is tomorrow. to me, it is a case where we had to digest the earnings quality that is coming up in the third quarter. i haven't heard a demand warning . >> this doesn't feel like to environment where they would keep up spending, the same amount of spending percentagewise, whatever it is as years have passed? >> right. look at what the stocks did today. they got decimated. you name it, they got decimated. not only that, we have a tight labor market. we are going to have some layoffs here which basically means you need less computers for your people. right? i don't think we have seen any of those effects yet.

we haven't seen any layoffs. the unemployment rate is basically unchanged. you have a lot of factors here that have just started. in the short term, you have things absolutely falling, that is a trading signal all day long. i think we have a couple of other shoes to drop first on the economy. >> coming up, the looming barreling strike toward us. fragile economy. we will bring you the detail straight ahead. we have more for you on today's major market follow. we will drive into the mortgage rate and the hurt that this is coming on the housing trade. a special edition of fast money. stay tuned.

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mortgage rates spiked again. >> that is the reason they are so battered today. this is a 14 day highway hit in june. the rate pulled back in july and started rising again after last week signaled that he would continue his tough stance on inflation. when rates go high, they go low. pretty high on this chart of another homebuilding versus the 30 year fixed. these are some of the biggest names. they closed down between 6-8%. not usually quite is dependent on mortgage rates. that first bike in june -- we will see if we will hold it at these levels this time around. >> diamine -- diana, thanks.

do you want to give up 3%? for 6 plus percent? >> i think that is absolutely the point. you have a great mortgage and there is no reason for you to ever get out of it. if you look at australia, 70 or 80% of their mortgage are variable rates. i think longer term, if you think about it, it would create some real stillness. people have gotten use to the idea that their home is worth a lot more than it probably is right now. >> what does this mean for home depot? furniture stores? et cetera? >> right. i think for home depot, it's a get on the 10 today. it would be about 10% since mid-

july. you may want to reinvest in your house. the one thing i get asked by investors is where our interest rates going? you think about revolving credit , this is a painful now time. even if it is a couple of hundred dollars a month of interest, i think that hurts. we just got numbers from home depot, recent enough where we know some of their business likely pro-business is alive and well, the technology and -- are really paying off. i do think you will give home depot -- i think 250 is really that level we started to hover around. they should at least be watching. i don't think you need to do much before that. >> the other part of this trade, they are just saying today that he expects 30-35 percent drop. this will be far and wide by many of the lenders.

>> yeah. this is sort of the money center once, it really lessons their mortgage business by a lot. absolutely. we saw a big widening of the inversion today. that was very substantial. we also saw the -- if they expect to crack. >> here is a lot more fast money to come. here is what is coming next. the little engine that could it. what does this mean for an already fragile supply-chain? count on crew. it is more resilient than you think. we will go off the charts with the name he is building in to. you are watching fast money,

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♪ welcome back to fast money. let's take another look at the massive falloff. nearly 1300 points. the snp, nearly 30%. down more than 5%. following less than the less of the market. our next guest says that can be a place to hide out. let's go off the charts with -- great to see you. which tarts are you looking at? >> i think we have to look at

the action of the day. what we saw on the broader market. when you are in a bear market, a downward slope 200 day, the risk to his surprise tends to be on the downside. we have been talking about this 3900 level as major support. let's talk about this a little bit differently. let's talk about leadership. if you look at this the last 4 or 5 days, what underperformed? what lagged today on the way down? this market is more about calling levels, recognizing what is and is in leadership. the triple q's, that is not what we want to be in this market. where can we hide? where can we find relative value? i still think the energy stocks provide a really good example of this. energy has disassociated itself

with -- obviously have it over the last several months. they have been able to disassociate themselves. they are more important than perhaps the headwind of lower prices. if you look at the flow picture, what we have really been surprised by is the degree to which investors have liquidated their xle's. just complete liquidation. there is a lot of skepticism. i think, very importantly, in a market where it is really hard to find good charts, 95% of the energy sector is still above the 200 day. we like to hunt in the areas that are most brutal. two names, what is most

important for us in the downmarket that is right at the highs. it is back at the absolute highs. this is a tough market. seek out leadership and avoid that. >> going back for just a second, chris, the technology broadly, if it is no longer leadership, what does that mean for technology in terms of performance? >> i think that is for almost two years now. that dates back nearly -- it has been, avoid these semis. they have been finished. they are not leadership anymore. nvidia , major in both the --

>> all right. chris, great to see you. just extrapolating, they are the leading indicator of the economy. this is what you tell me everything will time, 10. here we are. just saying forget them! forget them. >> some people -- redundant. it actually took out the september number one roads. that is where they are going on a big run. we love chris. let's be clear. he is talking about the fundamentals. as an investor, not a traitor. if you think about what has been going on in the energy sector, something else i would like to harp on. we will pay down 6 billion in

debt and we will buy back 20% of stocks in the next three years. that is $80 oil. 20 year highs, 18 your eyes, whatever you want to say. it equals a 3% move lower in oil prices. oil has been trading in this environment. >> yeah. what you are saying is true. for sure, there are businesses that no matter what happens, they will be sound. they have everything they need. they are phenomenal players. they are mission-critical software for, for example. when i think about the fundamentals of those, even in a difficult economy, they are better positioned. when i think about energy, and let's say of suddenly putin decides he will pull back from russia -- from ukraine, what does that mean for the oil prices? is that a fundamental driver?

not really, no. i'm trying to pick businesses when they are masters of their own destiny. >> meantime, let's talk about crypto getting hit even harder today. they also dropped, that is expected to undergo a merge later this week. that will change the way the coin is designed. what does this mean for crypto? what do you think? >> yeah. it is not great. we are still correlated with the nasdaq, right? as high as 78% in the year. it is down to 50-60% now. today was very clear. the only thing that matters to crypto is the macro news and what is going on. there are a lot of things going on in crypto that are interesting. it is changing the way and will

use a lot less electricity. it would create what looks like some kind of yield. not really, but for tv purposes, let's call it some kind of yield. until we get through this macroenvironment where it is just risk off, no liquidy, it will be harder to rally. >> the last time i asked you a question over tv, i said, do you think the moment has arrived as a lot of these crypto blowups that we saw. where are we to that moment, or not? >> what did i say the last time? was i right or wrong? >> i will just go with you are right. >> i love that answer. i don't think we have reached that. i think the next stage, what i will be looking for is some kind of minor distress. a lot came to the u.s. because

there was free energy. all of these things in texas. now, those costs are higher and probably permanently higher. they will start shutting off machines. i wouldn't be surprised if a couple of these we have seen already -- the type of operation. to me, i think that is the final leg down here. i do think we get to a point in time where inflations days high, the fed has to pivot. that is the buying opportunity for rip though. we are just not quite there. >> are you short of the bid coin? >> i am short of the bid coin. coming up , how should you protect your portfolio? we will dive into the tips for that. what to do tomorrow? we will bring you a master class. stick around for that, much

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welcome back to fast money. options traders putting on a huge set of bearish bets. a potential bigger downturn in the market. mike, where did you see the biggest trades today? >> yeah, in several places. i will just provide a few examples. that is where we will start. we saw on the october 7th, weekly purchases. a few books to get -- we saw a very big purchase there. over 30,000 of the 176 expiring early in a little over 10,000 at a piece. esa, which is the -- index etf. that will be the developed markets. there, we saw a

purchase of 52,000 of the january 2023 5245 spending for those. those are examples. >> karen, what did you make of the trade, giving you just recently got into germany? >> i like the trade. i want to buy more. i mean, i hope this is as bad as it gets. maybe it isn't. it is compelling to me. i am looking at their sheet, relative to ours. we are an embarrassment. just in terms of debt to gdp. they are at half. their rates are half as much is ours. disappointed. >> mike, thank you for that. be sure to tune into the full show. coming up, position yourself for tomorrow.

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♪ welcome back to fast money. starbucks just released updated guidance. rising the last few minutes. kate rogers has been following. kate? >> they just announced accelerated earnings growth of 15-20% annually over the next three years for the coffee giant. that is up from the previous guidance given in 2020. poll of 10-12% growth. 7-9% fiscal year 2023 will be on the high end, depending on how china performs. she says by 2024 and 2025, that is also above the company's previous guidance of 4-5% growth. u.s. growth increase of 7-9% annually over the next three years. she also mentioned china will

have a performance in 2023 and in parts of 2024. it will be laughing booth lockdowns in the market. expect in the range of -- in 25. so far, the day has been about the reinvention of starbucks for the future. he was laying out his big vision after admitting the company kind of lost its way. he said cold drinks are about 80% of the summer portfolio. now about two thirds are asked to be customized. the company are reinvesting. next year, to modernize them with new equipment, more efficient setups, and reduce complexity with automated ordering. we will also be reducing the portfolio with more pickup, drive through, delivery, and mobile order and they will be coming to airports, stores and supermarkets. they plan to go to 2000 locations by the u.s. in 2025. they are just over 2 1/2%. back to you.

>> kate, thanks. kate rogers. at the same time, you sort of don't want to hear it. putting out bullish guidance may not be anything you want from an investor to hear from a company at this point in time. >> or hearing that they lost their way. all that some of that is a real stretch. the first code beverage i had from starbucks, the next one will be the first one. i think about what they have to do to improve the efficiency. it is great they will clean it up. and portly, let's focus on the national growth. the store growth internationally will be 30%. that to me, it is not china reliance. that is leveraging off the new ceo's international prowess. that is where you will get the girls out of starbucks. the u.s. is really the cash cow that has been supporting this business for a long time. >> a few things. we often see a new ceo who sort

of resets the bar. we didn't see that. that is sort of interesting. what is the right multiple for starbucks? there are still headwinds -- i don't think one can rely on china coming back to where it was. i think tensions are much greater now than they were. assuming they get out of -- i think that will happen. it is not for me. the market multiple is, i don't know -- >> with the lockdown ending, it is this sort of punishment perhaps because it is an american brand. >> exactly. for 20 years, so many brands that have gone into china have found tremendous growth. i think that is behind us, not so much in front of us. >> if you even ignore china, they have such a problem with labor as it is. right? they are under tremendous

pressure from unions. a quarter of employees right now quit within the first 90 days. that is not positive in the ability to retain people. i think the changes they had to do to be more efficient are pretty meaningful. it will take a meaningful investment, in terms of labor costs, and also renovating a lot of these stores that haven't been touched in years. >> yeah. he has four dollars left for a venti coffee. i think that is large in fancy starbucks terms. i don't know. if labor costs more, and things cost more, they might have margin compressed, unless they are able to increase the price that they will pay. >> yeah. in a different environment, this guidance would be met with all kinds of cheers. stock will probably be up 4 or

5%. i don't know what kind of cold drinks they are thinking -- drinking. there is nothing i see in the road that looks like an environment where you were gross sales for a four dollar venti. i believe 10 cost $20. >> it is 2 3/4%. it looked like the supply chain crisis was easy with the getting back to normal, there is a new threat to the system. we are three days away from a potential massive strike. they are about to have a mandated 30 day calling off period. look at this mean? everything from cars, chemicals, energy, fertilizer could be stuck in rail yards, causing damages to the economy each and every day. where do things stand right now? >> we have noon news this evening, melissa.

the association of railroad spoke to me saying that if an agreement is not made by friday, they are not locking out the workers. that is really important. it is really up to the workers if they want to come to work on friday. the other thing, i am seeing a change in tone, if you will. union pacific, their, 24 hours ago was much more corporate, saying they were looking to have an expedited decision made. now, you see more want -- once coming into this. that is when it comes to this whole measure of them wanted to have unpaid days off so they can go to the doctor. >> couldn't that mean, in your view, that it would just be more difficult for them to come to an agreement. they will sort of be a little nicer to the other side, so to speak? >> what what they are telling me with knowledge -- i am hoping they find my discussions with the head of the labor union

if we don't get these three days off, so to speak, we are going to strike. i'm hoping we are trying to see a meet in the middle. >> just quickly, if it happens, good other workers strike in sympathy? could this be more? >> absolutely. there other railroad workers in other aspects of the industry. we are hearing that there are some possible strikes that could arise at some point. >> we know that hazardous materials, already those shipments have been halted. what is next year? >> pretty much, starting tomorrow, you are not going to have -- they will start rejecting the cars going into the port. you also have amtrak stopping certain passage. they have actually stopped

receiving exports as of the 15th. there really is a trickle-down effect, if you will. remember, that is very hard to turn off and turn back on. every time you have something shut down, it just adds to the restart time, if you will. >> laurion, thank you so much. she has the very latest on the strike. it feels like investors on factoring this in too much, in terms of what it could mean for the consumer at the grocery store. psychologically, you are paying more for everything. you may be paying even more if it is in shortage. >> yeah, and you can't get it. even if you want to pay more. i think this is a big risk that a lot of people are looking at. the hope is that -- particularly from the union side. what they said this weekend, it was pretty tough talk out there. i think they are very serious. listen, they were already shutting this off.

it is going to happen. a little bit of the impact, it takes days and weeks to turn this around. in the bigger picture, this is exactly why inflation is sticking. they are getting wage increases. every union out there is getting wage increases at this point. your demand, at least for the stuff you need like oil, gasoline and heat probably stayed relatively stable, which means prices stayed pretty high. if you add in some kind of supply shortage, then you would definitely have a longer-term > miation impact. >>cong up, your post selloff set off. ♪ ♪

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♪ welcome back to fast money. they have at their worst they since june of 2020. dropping almost 1300 points. the s&p 500, falling more than 4%. the question on the investors minds, what did you do tomorrow? what is the first thing you look at on your screen tomorrow? karen, would you think? >> i want to see if people really start to panic.

starting to buy things, something safer. >> julie, how about you? >> in about how they have handled other recessions. i really think i want to protect myself. durable earnings are what i am looking for. >> tim, overnight trade, it is also very interesting to watch. what are you thinking? >> it will be. i'm not overreacting to the interest rates. i'm expecting it to adjust a little bit. don't get high-tech multiple stocks. >> yeah. how about you? >> yeah. i think only very short-term, you want to watch the opening tomorrow. after a big drop, you might get a pop. i think you want to save that. >> okay. let's get to the final trade. tim, what do you say? >> i am also looking at energy stocks. i think it is probably the most

efficient energy name out there. i like that. >> brian kelly? >> i think you want to buy things people need. >> julie? >> yeah, i agree. i'm looking at -- that will probably make our earnings better. >> karen? >> on top 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 seattle edition of "mad money" from starbucker headquarters. my job is to the just to entertain but put days like today in