>> i love tony's line, something to the effect of innovation doesn't have a calendar. >> exactly. >> it happens when it happens. all headlines have been dominated by downsizing. here we are talking -- >> they want to send that message. >> thanks. we'll see mike tomorrow for his last word. that does it for us. "fast money" is now. right now "fast," how a market is struggling to end its addiction to fed policy stocks as the chair signaled inflation is starting to ease but then hinted rates are still likely to rise so where do we go from here, plus the president's war on corporate wealth from chastising big oil and how they use their profits to tonight's state of the union call for a massive tax hike on stock buybacks should american business fear that smooth sailing for cruise stocks disney riding high the options action ahead of earnings i'm melissa lee. this is "fast money.

we're live at the nasdaq marketsite and have a full house. tim seymour, dan nathan and guy adami and start off with the roller coaster ride. the s&p taking a big leg up as fed chair julie erome powell ki off an event saying disinflationary process has become but a reverse course after he noted continued strength in the jobs could mean higher numbers ultimately they closed near the highs of the day, three major indices more than recouping yesterday's losses, if the gains hold it would be the nasdaq's longest weekly win streak since january 2020 so did powell really give traders a green light this time around think about what has happened since he last talked we got a hot, hot, hot jobs number and still had the opportunity to come out, be hawkish. >> well, he also tried to explain away the jobs number not enough people -- so i get it and this disinflation theme, great job, by the way and since

the beginning of december clearly this market has me confused and i've been dead wrong but a little bit of math because why not start the show with math. where the s&p closed 4165 or thereabouts, put in 18 multiple on that which historic decent -- talk about s&p earnings of $231 which i don't think anybody thinks we'll get to. probably 13% overvalued and i would submit 18 times in this environment is probably two turns overvalued so explain to me, you know, how it makes sense just in terms of the math that the market's trading here. continuing to invert to 80 or so basis points on the way to 1%, i think, so the backdrop isn't great. the market trades like everything is fine. >> like everything is coming up roses, in fact, tim. >> coming up roses because he gave the green light because he didn't give the red light. you have the dynamics we all know unbelievable payroll number. i'm going to say it's backward looking data as most will and i don't think the job market is

that strong but again the last week's data parade that was an incredible ism and eci and payroll number and fed to say we're data dependent, i think he balanced it out by saying this is reflexive in either direction and could be hiking a more aggressive lead, the data tells us this but gets back to where i think markets have this falling inflation backdrop they have a better than expected job market they have, you know, janet yellen saying something along the lines of you don't go into a recession if you're at 53-year lows in the unemployment rate, yeah, except that probably topped the labor market. i think the s&p could get to 43, 4350 a lot is -- guy's math is right. i don't think earnings are great. i don't think the world is in a great place and probably going into a recession but look at positioning and where we are and i look at the triple qs outperforming the s&p and the smh outperforming the triple qs

is a formula where you have a lot of market cap that can take you higher. >> yeah, earnings haven't been great. they haven't been terrible and that was the fear. you could argue that was in the base says going in if you extrapolate decline 4% or 5% declining earnings growth and multiple expansion which those two things don't reconcile as for your question did powell give the green light i don't think he has even when he used disin disinflationary 15 times i don't think he's given the green light. we continue to run red lights and the market has continued to outperform but i think what i saw from powell today which is a bit of a change of tune is his acknowledging what the data is saying if he pushed forward the sentiment of neel, we would have felt he was tone deaf so for me i at least saw someone taking in data here's the possible two 359s

forward and are, in fact, in tune with the releasing coming out which gives it more credibility and offsets the credibility issue they had leading up. >> dan, ray the traffic metaphor so -- >> you know i don't play -- >> you know, it's interesting. >> by will play, i know. >> yeah, he will listen, what are we discounting with the stock market where it is, you have an s&p that's up almost 9%. you have a nasdaq that's up 16 1/2%. i mean i think when bonowyn mentioned earnings, the major names in the nasdaq and what they had to say about their visibility, the way they're cutting costs, i don't think they think it'll be a great economic environment in the next three to six months. stocks, wherevaluations are an guy just mentioned here what they're pricing for $230, i mean it just doesn't seem very likely here, so if we have the slightest bit -- powell said this and the market has not

reacted on two cases over the last week about -- we have bostick saying this. >> yeah. >> so here's the deal. if we have inflationary readings start to tick up and the jobs market stays where it is or -- what do you think will happen to stocks so i do feel like the higher we go, if we go to your 4300 i think it could set up for a dangerous situation and last year we talked about this, on a year where the s&p was its lows was down 25%, nasdaq down 35%, it was orderly on the way down it was never -- we never had a bit of panic here. the vix was only above 30. it felt like for a few minutes, you know what i mean, when it did that and that was the time that you bought stocks, right, we had these huge big rallies. i think we're in the midst of these rallies, the disregard for the fact that the fed is telling you rates will stay elevated longer but pricing in something different. >> right now things are okay doesn't it feel like there's a path higher. we're through the bulk, right, the heavy part of earnings

season here, we're through, you know, the fed meeting the next one is in another month or so we don't have much else to go on. right now it looks like the markets want to go higher. it's like a rorschach test and everything is possing butterflies and not moths. >> dollars peaked. rates peaked inflation peaked the fed has peaked but it doesn't get back to the math, dan, 4300 is like 2 1/2% away. look, i think the markets are overextended i think they'll go higher and i think those are the reasons and i think sentiment and positioning and cash levels. look at those bank of america fund manager surveys over and over again and see where cash levels are institution community. you don't get fired for losing money on the way down but for not making money on the way up i'm telling you this is how -- >> my wife will fire me? >> i'm not getting involved inside your house. >> she hasn't fired you so far >> i'm doing okay. >> but the point is i'm not saying it deserves to go higher

or should be higher or anything like that. right? because the way the market trades is the way the market trades where you think it should be is another story. >> what is the catalyst with all these things now in the rearview mirror what is going to take us down so it's a fair point look, tim -- >> could we be in a speed trap here, guy? >> the bottom -- you can run all the red lights you want. alt a certain point you will get clipped in the intersection, so we've been fortunate to run these red lights and nobody has been coming the other way. >> trapped in a traffic circle. >> which would happen -- >> you do enjoy this gotcha. >> a great scene in "european vacation". >> look, kids, big pen, parliament >> we've been through this age march, april, june into august, october into december and each case when we were at those relative highs up 15% to 20% in each situation, no one could actually see everybody was calling, that was it okay, so, again, sooner or later

somebody will be right and take off and make new highs and blow through 4800 and have a new bull market here and i guess i would just say this, as long as i've been doing this i've never seen a bear market bottom at 17 times s&p earnings and i've never seen the market bottom when rates have risen as much as they have over the last year and, you know, again, i just think that this stock market is pricing in a fed that's going to be cutting by the end of the year and maybe if they do, you know, we're talking, what, 25, 50 bips but why will they be doing that >> keep in mind powell doubled down as well and said, listen, he doubled down on the % level and said we expect to see meaningful moves toward that this year. so to me, maybe i'm parking a little bit too much. this is going to take time and be a protracted situation for us to see the effects of monetary policy and for him to put a time line on when they expect to see those results kind of trickle

into the market is saying, listen, if we don't, then we're going to be more emboldened to continue to take action, so they're not going to wait and see. we can think what we want about the market and up seems to be the path of least resistance them putting a time line on there is saying, listen, if they're not able to reel it in within this calendar year then look out. >> all right, for more on powell's remarks let's bring in joe lavorgna and the former nec chief economist. joe, great to have you what was your take on powell >> he didn't say anything new, which is good. i think that's why the equity market liked he didn't get more hawkish. the reason for me he didn't do that, melissa, because the senior loan office's survey which they look at closely tells us we're going into a recession because we saw massive tightening across the board, commercial real estate loans, cni loan, consumer installment

loans and that's conditioning his thought process. he was dovish and didn't push back against what the markets have been doing and he didn't highlight the fact he thought the employment report was really something that was going to be sustained. >> what does that tell us in terms of what you see in the senior loan officer survey and the tightening they are reporting and the lagged impact on the jobs market we had a hot number friday when do we expect to see that -- if businesses aren't getting loans they won't be expanding or hiring, et cetera. >> yeah, i mean, the data suggests that the recession literally could start any quarter. and i know the unemployment rate is low job number is the last few cycles continue to lag, broader measures like gdp, but we have gone into a recession with the unemployment rate only up, you know, a tenth or two in its lows so a downturn this spring, melissa, is still very much on track in my view the yield curve is extraordinarily inverted the market is telling you that the fed is too tight, senior

loan officer's survey confirms that powell is aware of it but doesn't know what the outlook is we're all making projections and doesn't want to be too dovish, too bullish on rates but i see them going lower >> we went from 81 basis points inverted down to below 50 basis point, back, i think, we got up to -- doesn't matter we're at levels we haven't seen in 40 or so years and i think we're going to 1% inversion. what does it mean? so many say it's different this time what is different about it >> nothing really. i mean the thing is the curve is inverted it basically means, guy, your financing cost is more expensive than what you could lend at. when that happens credit tends to dry up which is why the survey is so important if the curve inverts more, that would suggest the possibility of a much deeper and prolonged recession. if the fed doesn't heed its message. right now as you know the fed is focused on the labor market. that's a mistake to me i don't blow too many jobs causes inflation but that's the fed's focus so

until that rate goes up, the fed will continue, if not to hike rates certainly keep rates elevated >> joe, real quick, when you talk about breaking the back of inflation, or you talk about the potential that the fed is pushing too hard on conditions, what's more important here to you as an economist for this economy, though? at least, you know, wiping out the concept of inflation and if the fed has to move too far too fast much in the way they were asleep at the switch, isn't that a good thing in the long rung? >> well, they were asleep at the switch tim, the inflation expectations, ten-year break even rate is down about 220. the five-year inflation -- all the surveys of inflation expectations, they all tell us that inflation will moderate significantly. to me the fed should be focused on growth and should be focused on where it thinks the economy is going and to me they compounded one mistake by as you said being asleep at the switch with now another mistake, thinking they'll keep rates on

hold through most of 2024 which basically, tim, would say this is going to be on hold as long as it was following the '04, '06 tightening cycle which was very slow, very, very gradual this one as you know has been very aggressive and eventually the economy is going to really feel it. we're just not there yet. >> joe, just quickly, i'm wondering how if at all china re-opening factors into your forecast of inflation here >> it does to me china is going to help on the good side because of things still in demand on semiconductors and help autos and things of that sort. china will not have the same sort of expansionary growth in commercial and residential real estate so demand for modties isn't going to be as high so to me i look at the china re-opening as a supply driven story that will actually help cause disinflation, not inflation. >> all right joe, thanks. joe lavorgna. >> thanks, everyone. >> great to see you. that's an interesting take on china. >> yeah.

you know, i mean, listen, we talked about it last night it sounds like the china trade in some of the inputs we look at to measure, it seems like it's cooling out a little bit and, again, to me i think if a large part and i think tim kind of differs a little bit of the enthusiasm about our market, our multinationals has to do with the inflation trade with china and i think that a lot of the things that will go on with cold war as you -- economic cold war getting hotter here, i think that they are inflationary deglobalization is inflationary. i think if you think about natural resources and the way we're thinking about, you know, all of this reshoring and everything like that i think there's a lot of things on the horizon that could push us into a recession and joe seems to think it's happening sooner than later. >> we got some news here on job cuts over at ebay. seema mody has that. >> another tech company announcing layoff, ebay announcing it is cutting 500 jobs, 4% of its workforce. the company says it will let employees know over the next 24

hours made in a release to the s.e.c. and in that filing, ceo jamie ionon talking about how the macro situation that's being considered by the company and how it best invests so we can continue to be successful are needed it's spiking higher by 0.8%. ebay cutting 4% of its workforce. >> seema, thanks we heard from zoom also cutting jobs it saw a big pop in the session as well on this, guy. >> a lot of these companies overhired. but with all that said you're not just seeing that out of technology companies you've seen it on the manufacturing side of things, as well all the different verticals will be affected and that to me does not suggest an economy that's growing. it's one that's slowing down rightly so, by the way, again, what are you willing to pay in an environment where the market is slowing down, the economy is slowing down, margins are contracting and heard from a number of different people with interest rates elevated. it's not a historic market

multiple and it's certainly not a multiple nearly 20 times what the market is forecasting for next year. >> all right coming up, a burrito burnout we all thought it was blow-out chipotle sinking after earnings and headlines out of the company's conference call next plus bing bots big ai updates what the ceo had to say on the future of tech more "fast money" in two my dad was a hard worker. he used to do side jobs installing windows, charging something like a hundred bucks a window when other guys were charging four to five-hundred bucks. he just didn't wanna do that. he was proud of the price he was charging. ♪♪ my dad instilled in me, always put the people before the money. be proud of offering a good product at a fair price. i think he'd be extremely proud of me, yeah. ♪♪

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i screwed up. because advice worth listening to mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please!

you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. welcome back to "fast money. chipotle, shares dropping after they reported a miss on the top and bottom line and same-store sales are coming below expectations pippa stevens joins us with the latest pippa. >> that's right. it seems consumers are finally reacting to the aggressive price action chipotle took last year, same-store sales rose 5.6% during q4 while analysts were looking for 6.9% brian niccol saying it was a tough quarter. he noted the chain didn't see the pop and momentum they typically see around the holidays he said that went hand in hand

with softer retail sales transaction trends did improve over the course of last year and turned positive during q1 but is ag against omicron numbers. menu price increases and lower avocado prices offset elevated across the board, most notably for bean, rice and salsa for the first quarter chipotle expects pricing to be between 9% and 10% higher year over year, melissa. >> all right, thank you very much pippa stevens. don't miss an exclusive interview with chipotle's ceo brian niccol on "mad money." let's trade this burrito burnout, the first time we used that term, blow-out good or bad we say >> we traded up to levels we saw basically in the fall and we're failing here it's a margin story and margins are now contracting unfortunatelily and when they contract the first thing you look at is valuation the answer is probably no. the question is, is this a

one-quarter thing and some of these head winds will abate? apparently so. i wouldn't know about beans because as you know, i don't get beans in my burrito. but some of the other things are clearly on the sorry side of peak prices so i'm inclined to stay with this trade i can totally understand why people say it's an old story. >> they can't raise prices, i mean i guess they could but have raised prices three times. >> they've done a good job raising prices and get away with that and they're helpful, dining, casual, whatever camp you put them in have been able to pass on pricing and the loyalty program, they pressed every button correctly to me, look, this is a bit of a small, small tiny vindication. i've been so wrong on the stock for like three years i don't think it's supposed to trade at the multiple it trades at in this market. i think that's what guy is saying in terms of where the margins are going so i think it goes lower and this is a case in point for where you should not be overpaying for a company who

has had great pricing behind them. >> not a huge move given the context of its being close to its 52-week high on the back of a double miss. >> and how much it rallied what i think is interesting, we spend so much time talking about over the last few weeks all these announced layoffs, guy just mentioned it, margin compression. here's margin compression and they announced a week or two ago they're hiring 15,000 workers in north america and that actually got -- i mean that's kind of turned around a little bit, if you think about it but, again, i think the run that the stock had, up 24% of the year i'm surprised it's not done more. >> your take >> i tend to agree unit productivity and empowerment of employees and you've seen all types of moves in terms of like management moves and now what you're seeing, price hikes exhaustion and the same thing with a lot of the other consumer goods and services companies and i think it's a similar situation here. i think this has lagged and outperformed for some time i did think for awhile they did deserve premium multiple but now

to guy's point asmargins start to compress and as -- there's a limit. i mean, guy, i know you don't eat certain things, you don't eat beans, you don't eat rice. >> tomatoes. >> it's not that he chooses not to but for safety reason. >> no, i will tell you -- >> everything else around. >> no, you have to be respectful of the panelists on the desk you don't want -- i will tell you you don't care i know, but i had cheerios for dinner, it was not a particularly good idea. >> no one wants you to eat cheerios, beans or tomatoes. >> i think that's what you're starting to see. >> there's a lot more "fast money" to come here's what's coming up next >> the power of ai microsoft announcing some big bing updates but can smarter search give it an edge over the competition? the traders are chatting up the future of tech plus, a war on wealth? president biden going after corporate tax rates and shared

buybacks what his state of the union means for the state of your money. you're watching "fast money" live from the nasdaq marketsite in times square. we're back right after this.

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welcome back shares of microsoft zooming higher as they announce a bing home page you can chat with. satya nadella today -- >> the good news is we start in -- with already a business that is profitable and here's the interesting thing, the most profitable, large software business is search so i look at this and say, look, i just have

to earn one user at a time and incremental gm i never ever felt this liberated in terms of opportunity in the days ahead >> microsoft also saying it will make its chatgpt technology available for other companies to customize. dan, you actually use bing, maybe for the first time ever today just to see what this was all about. >> i binged chatgpt. and, listen, at the end of the day we know that like the search business and this is, you know, google has massive modes here. they're obviously making a lot of moves and feel like we've been talking about it a lot over the last few months and a lot in tech talking about it. i just can't imagine that microsoft is going to realize any big gains as it relates to this one product that they outlined today any time soon i just thought up 4% on this kind of news was a bit eye popping especially given the quarter that they've just released and the guidance they just gave. but it does feed into the narrative that's going on in tech right now and this is a new

exciting sort of thing and we're seeing lots of major platform companies make lots of investments in and around this and make lots of kind of comments about what this means for their businesses it's just not going to be realized right now any time soon. >> just the tip of the iceberg for microsoft. they're also talking about how ai will make software coding a lot more efficient there's so many different applications for ai, particularly when it comes to -- almost feels like we're at a point we'll look back on this day perhaps and say, this day is like the day that satya nadella went out and said azure and we're going into cloud and this will be the new business it feels like that kind of moment. >> okay, and the market is seemingly paying for that now because current levels, we're trading 25-ish times next year's numbers so they could be on the cutting edge of something. if they're right you have to wonder what it means for google. in some of the absurdity in price action they reported their quarter, the stock i think close to 245 was 253 like in a blink of an eye, we said wait till the

conference call. the next day it was trading 233 and now look at it now nothing has changed so i'm not really sure what the market is getting all excited about to dan's point so, yes, they might be on the brink of something but are you willing to pay 25 times forward earnings for it. >> these are some of the biggest companies in the world you're not suddenly buying them now based upon this news google, i said yesterday, google if anything, this has kind of knocked -- they spent so much on ai and learning and have the biggest language library of any company by far i mean they've been investing this forever should we go out and buy google tomorrow i think you should buy google because it's an attractive valuation for a world class company but this is not a reason to go out and buy any of these companies in my view by the way, we got another -- we got ernie which is the name of their -- it's enhanced representative knowledge something but call i had ernie for short. went up 13%. >> yeah, this is what reminiscent of the cloud related

stocks we saw in the middle of the pandemic where anything whether you had the mention of cloud you saw it double or triple in value and i do think whether they should or shouldn't we can argue the merits but i do think people are buying microsoft and the others purely based on these ai searches if you look at all these small "company"s with moves of 40, 50, 60% over the last week or so, i think you can infer that people are -- the retail community is once again kind of trading into this on the back of this news specifically >> coming up, president biden taking on corporate america. the latest salvo coming at tonight's state of the union address but can this just political rhetoric or should the wealthy be worried, plus, is lumber slumber over? the details when "fast money" tus. . and my banking relationship was getting... well, complicated. hahaha! so, i broke up with messy accounts and moved my money to sofi. now i earn higher interest on my checking and savings,

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welcome back to "fast money. another check on the markets today. stocks closing near the highs of the day after a seesaw session, the dow jumping 265 points breaking a three-day losing streak the s&p up more than 1%. the nasdaq leading the gains up nearly 2%. some of the names boosting the nasdaq, zoom up nearly 10% that company announcing it will lay off about 15% of its workforce.

fintech fiserv hitting a 52-week high well, president biden just a few hours away from delivering his annual state of the union address. calls for higher corporate tax rates and fewer share buybacks cnbc's eamon javers has the details. >> we're going to hear a number of populist economic proposals from president biden tonight, maybe none moreso than his ide for a billionaire minimum tax. the white house argues that billionaires pay anaverage tax rate of just 8%. they want to change that so billionaires in biden's view, quote, no longer pay a tax rate lower than teachers and firefighters we'll also see the president propose the quadrupling of the tax on corporate stock buybacks. the white house says buybacks funnel tax advantage payouts to wealthy and foreign investors instead of paying out dividends that shareholders are required to pay taxes on and they argue that buybacks are a way for ceos to enrich themselves even if it

harms their own companies. but bear in mind, melissa, the president is facing a very different congressional landscape this year with republicans in charge of the house of representatives they're unlikely to go along with a lot of these ideas so the other thing to watch for here is the reaction on that gop side of the aisle as the president spells out all these details back over to you. >> eamon, thank you. eamon javers in washington for us guy, i know this has got you wound up i know -- >> listen, if you want to legislate and pass a law and get it through congress, no more -- all right, that's fine if it's the law of the land, i i'm fine with it when we start to pick and choose which industries can and can't do it, again, i mentioned it chevron, we talked about it that night, 20% of the market cap significant. facebook a week and a half later -- >> nothing. >> not a press release, i didn't see it what's -- explain the difference there is no difference so if we're truly this capitalist society we believe we are, then you can't pick and

choose what industries can do certain things pass a law that's fine. i'm all for it short of that -- >> what do we want to do nationalize the industrys? last time i checked this is what they're doing in emerging market countries and state owned companies. >> we have we did it with the autos and insurance companies and did it with banks and airlines. i mean we do it again and again and did it with energy companies. let's be fair. i mean -- >> i think that's where there's a right when there's lending that goes on to airlines or banks there have to be strings attached but that's not what we're talking about. companies that are profitable buying back stock are not villains companies that are profitable and goosing their eps is something you can figure out and kind of understand what it means and maybe they're not growing but actually able to buy back their share, share price goes up this doesn't make them bad companies unless they happen to have just borrowed $20 billion from the u.s. government during covid. >> you know, but they did. i mean like we threw trillions of dollars at corporate america during covid and before that we did a tax cut, right, in 2018

and you know what companies did, we borrowed a trillion and a half dollars from the future, right, and you know what they did in 2018 and '19, they bought back a trillion dollars worth of stock and made new records that's all i'm saying. we're about to have a fight over the debt limit, right. where do you think this all happens, right, like so, again, to me we can say it's partisan or this or that and eamon did a great point, these are political tal talking points he doesn't have the house. it's not going to happen >> i think a lot of the companies we're talking about right now under the microscope are not necessarily companies that were doing that i do agree and this is politics and it's not necessarily my politics or anyone's, there's no question the tax rates for corporate america are at a level i don't think we'll see that low again and gets back to where margins should be and multiples should be for the stock market rates were as low as they could go tax rates were as low as they could go and companies were as profitable as they could be.

i think that's part of the story we have why the stock market multiples should be as high. >> "more than you'll ever know" on wealthy americans and corporate america let's bring in ed mill, washington policy analyst at raymond james great to have you with us. you heard our traders pretty fired up about this whole issue as i imagine a lot of people on wall street, on main street are. but, you know, in reality is this just political theater gearing up for an election cycle? >> yeah, melissa, the state of the union, that's d.c. super bowl and what biden's trying to do here is trying to have a trick play to get republicans offsides it's all about that debt limit debate, trying to develop that straw man where biden later this summer will say, look, i'm willing to talk about the fiscal house of this country, but republicans, they want to let chevron buy back $75 billion worth of stock and don't ask them for one penny more of taxes. they want to let this country go to default but won't ask

billionaires to pay as much as teachers or firefighters, exactly what eamon said. so this is political theater it is all about that straw man trying to draw them offsides i think democrats hope biden is the tom brady, the old man but even tom brady has retired at this point >> so just to clarify you don't think this is really a credible threat, what do you think is the net-net end result as it pertains to the debt ceiling >> it's going to get lifted. cnbc had great reporting earlier today with -- interview with mccarthy where he said the united states won't default. i think that's the most likely scenario what i see democrats focused on are tax increases. what i see republicans focused on are some of the spending cuts i think what we get as a deal is probably that third way, is there something that provides economic growth? is there something that provides more revenues to cover some of the debt and the deficit

one of the ways you can do that is through an energy bill, and all or above approach something senator manchin tried to do last year and house republicans have led off this year. is that the path forward is what i'd be focused on. >> do you think, ed, that the message that corporate america is using their billions of dollars of profits to buy back stock, does that resonate on wall street? i mean, does the average american think about buybacks and how chevron is using its money? >> no, but there is a saying in politics that when you're explaining you're losing, so it's not about does this resonate kind of in wall street, but does it give democrats a bit of the upper hand? is it going to be putting pressure on republicans? i don't think there's going to be a minimum tax on billionaires but we have a 1% tax on buybacks we still see massive amounts of buybacks being announced so, you know, could that be part of a final solution?

weigh that much higher i don't think it's likely but more likely than other things as it relates to taxes. >> what do you think how are you gaming out the probability of an increase to that buyback tax >> i want to see if there is any tax component to a final deal on the debt limit and if it is, this would be high up on that list, outside of that, you know, we're not going to see a corporate tax increase overall we're not going to see changes to personal taxes. democrats have full control of d.c. over the last two years they couldn't do that. i think one of the undertold stories of the last two years is we're at a low for longer tax environment than what we expected if anything changes, it's on the edges, things that i don't think will have a significant impact on corporations or the market as a whole. >> all right, ed, thanks ed mills. >> thank you >> that's interesting. tying it to the debt ceiling >> well, if you think about where we spent money i think

this is where you're going we gave away 25% of the economy during covid and i think, you know, the debt at some point we're all paying for it. so, yeah, i think there could be some contingencies or at least tying in certain gifts to this type of restraint on spending and no question that both sides, i say this and you can attack me from either side republicans look like democrats and democrats look like republicans. they're both accuse the other of doing something that the other used to not do see that that's what we're doing. >> coming up, the number on lumber prices on the rise even as home builders cut back on demand. the nuts and bolts of that trade next and during february we are celebrating black theritage here's james reynolds. >> when i think about the significance of black history month for all america and we think about the role that blacks have played in making the united states the most powerful, most

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edward jones welcome back to "fast money. lumber prices up 32% in the past month even as demand seems to be softening. what's behind the move diana olick is here to help break it down. diana. >> well, melissa, it's been a roller coaster look, lumber prices jumped dramatically in the first two years of the pandemic then fell back last year finally giving home builders a bit of a break but now up again nearly 33% in just the last month. why? well, home builders' sentiment finally ticked up for the first time in a year and investors see potential for increased demand in the coming months costs for other building

material, though, are still rising, but not as fast. the annual gain in building products was just around 8% last year compare that with a 19% gain the year before. that's a 60% drop in the gain. but, again, they're still gaining. g gypsum, your wall board, it was more than three times the 25-year average, it was substantially lower than the 23% increase seen in 2021 and other materials like copper, steel and cement are also up, in fact, residential construction material costs have increased 36% since the start of 2020, higher construction costs caused the median new home price to jump from around 328,000 in january 2020 to over 442,000 at the end of last year and that is why builders just can't lower their prices very much, melissa. >> all right, diana, thank you diana olick. so, what do you think of the housing trade, bonawyn >> i think they can't catch a

break. when you look at the housing sector, it's made a meaningful rally from the lows here and we around and get rates that start to not only come down but start to stabilize and that's what it is these companies have the hedge when you see a bit of tumult in the commercial real estate market and looking at home builders saying, listen, this might be a leading indicator, a bright spot where there might be upside and i think this might just be -- might be the qatarry in the coal mine that leads us to see a pause in these housing-related names in the short term. >> when you think about -- when i thought about lumber prices i thought go what international paper had on their earnings call trying to restock their boxes so it's all sort of this little ecosystem we're seeing. >> inflation is starting to rear its ugly head again and, you know, we tried to -- one of the things we did i think in the fall is the simplicity in the housing trade and i know it's frustrating but if rates are going to go lower which they did, then almost by definition some of these home builders would go higher, dhi, $75 a

stock-ish around halloween it almost made a new all-time high now is when things get dicey because are rates headed back up or are we going to stall and ten-year yield will go back down if you've been in the home builder trade to bonawyn's point now is the time to trim and take profit. >> coming up cruising higher royal caribbean jumping on the back of earnings is it smooth sailing for the space? details ahead. plus, could there be some disney magic on deck? the company set to report earnings tomorrow and traders won't let it go. how they're playing the name next back in two. let's get started. bill, where's your mask? i really tried sleeping with it, everybody. now i sleep with inspire. inspire? no mask? no hose? just sleep. learn more, and view important safety information at inspiresleep.com

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welcome back to "fast money. royal caribbean shares cruising higher after the company posted a smaller than expected loss for its latest quarter the cruise line issuing bullish guidance for the year saying it believes it can continue to price packages above 2019 levels amid strong demand tim, you're watching this one. >> the momentum in bookings is out of hand. i guess we're just getting into wave season, so, you know, i do think if you look at the

re-opening trade there are certain sectors that have not really played through. this is part of the reason why the airlines are in my lags acronym and i think if you look at the cruise lines they are not all created equal. balance sheets are not the same. carnival is, in fact, a carnival i think royal -- >> in a bad way. >> yes, yes, it is >> some think carnivals are great fun. >> they're not bad clowns are weird sometimes but you got to be careful about that i think there's more to go i think this outlook is fantastic and margins are improving. the labor market improving for them that they can actually get people and those hiring costs have stabilized. >> wave season by the way is when typically you book for future trips like the summer, so you book now for then. >> casinos quickly are in the same vein and wynn got above triple digits which is probably cheap at these level. >> disney which reports after the bell tomorrow. the options market is betting on a big move higher for the

imagi magic kingdom. >> calls outpacing puts 3-2. the options market implying the move of a little over 6% by the end of the week following earnings slight i higher than the 5.4% that the company has averaged over the last reported quarters one of the contracts i was looking at that saw a lot of activity today was the weekly 115 strike calls we saw over 5300 of those trading for $1.80 and buyers of those calls will see profits if disney finishes 5% or higher up after earnings >> dan, do you like disney >> not into the print. we talk about some of these companies that have, you know, they have more wood to chop here, bob iger came back here and i can't imagine he wants to get over his skis as far as guidance and makes sense to reset the bar lower. i would not be chasing disney into the print tomorrow. >> bonawyn >> i wouldn't chase it but long-term time bullish iger will get things turned around and they and netflix and maybe a couple of others will

end up winning this streaming war and also have the dtc in the park so i think it's a name worth owning yeah might be a little choppy in earnings. >> tim >> well, i think the momentum for the media companies is back and i think disney, which got probably way too much credit for growing its streaming business was not profitable and challenged them all to make money, i think disney is well positioned here and they -- look, i'm long netflix as well disney has to outperform here. >> mike, thanks. mike khouw for more options action tune in friday 5:30 p.m. eastern time. up next, final trades. "options i friday 5:30 p.m. eastern time. up next, final trades. " tune in friday 5:30 p.m. eastern time up next, final trades.

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if you only knew what goes on in the commercial breaks. time for the final trade tim. >> yeah, it's fine 1991 nba draft, we've done this in between commercial breaks disney will do it in earnings staying long in the magic kingdom. >> bonawyn >> yeah, i'm looking for an opportunity to buy any weakness. >> dan >> we surrounded that trade last night and carter was emphatic. traded pretty well. >> yes

guy. >> oddly enough larry nantz was the best in that draft he's a big "fast money" fan. schlumberger, stay in energies. >> thanks for watching "fast money. see you back here tomorrow at 5:00 for more "fast. ad money" with jim cramer starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm trying to make you a little money my job is not just to entertain but teach you how this works call me at 800-743-cnbc or tweet me @jimcramer. we have two markets,