we'll see if there's real softness with the consumer or just category by category. >> if people have to keep living in older houses, is that good for them -- >> it is >> yeah, okay it >> it is, yeah, the old housing stock is usually pretty good for home depot they don't see the overall trend being a problem, even if there's some moderation. >> okay, courtney, thank you that's going to do it for us here an "overtime. >> "fast money" starts now right now on "fast," don schumers keep piling on the debt and it's at a new record level as the major retailers get set to report this week. how worried should investors be? plus, a banking battleground shares of bank of america falling more than 20% in just the last three months and down more than 16% for the year why is this money center monster being lapped by the competition? and later, activist trying to shack up with shake shake inside the monster move higher and can you trust the chinese stock rebound? i'm melissa lee. on the desk tonight, tim see

your, courtney garcia, guy adammy and we start with the staggering number on just how much the u.s. consumer is carrying $17 trillion and counting. this, according to a new report from the new york fed. debt is now at record levels and jumped nearly $3 trillion from its pre-covid levels despite comps as the nation's biggest retailers set to report earnings of those retailers, only walmart is trading higher over the last three months so, how worried should the markets be that the consumers are getting close to some sort of spending limit? tim? >> well, i mean, they should be concerned about a couple things. there's a disinflationary trend, dh which is great for the consumer, but not for walmart. to the extent that not only do you have the $17 trillion debt number that's just kind of scary, but you are now with credit card debt over a trillion, so, they're happening

at the same time the consumer is drawing in university of michigan saying on friday you are down 9% month over month a terrible empire manufacturing. we know manufacturing's near not only recessionary lows, but you know, effectively near all-time lows so, how does the consumer hang in there they have a job. how do these trends continue i don't think they do. in fact, walmart's comps are expected to be 6% to 7%. they've been downgraded. but a lot of companies are really going by, you know, their rallying off of less is more i look at a home depot, and we can argue, their multiple is very defensive, guy talked about this on friday, i would make the same argument, 16 times, low's around 13 times. these have priced in a lot of weakness and a lot of weakness in the housing market. but we haven't gotten into consumer credit issues we're going to talk about banks later on in the shows they are all wound up together. >> there's good news/bad news here, guy. the good news might be, if you want to be on the sunny side of the street, that they continue

to spend and so that bodes well for the retailers in terms of the quarters they will report. the bad news is that if a lot of that is credit card, and we are hearing from retailers that a lot more consumers are using their credit card, those interest rates are getting higher, because rates are going higher which side of the street are you on >> i'm always on the sunny side of the street, mel i mean, come on, of course, why wouldn't one be? but i'll -- here's my push-back to that. the federal reserve is fighting inflation with raising interest rates. the united states consumer is fighting inflation by adding to debt levels. 36% of u.s. adults now have more credit card debt than they had savings. in context, that's up from 21% a couple years ago and we're talking about staggering numbers and forget about u.s. debt to g gdp. in 2008, was 65% now it's north of 130%, approaching $32 trillion so, you talk about debt

problems, absolutely does the market care no and we say all the time, the u.s. consumer will absolutely spending regardless, until something happens that catches their attention. and quite frankly, nothing's happened yet >> i think it's that u.s. debt to gdp number that really kind of tells a bit more of the story. because it's a relative number $17 trillion is scary, but that is a nominal figure. it's not necessarily adjusted in real terms, so, like, explaining it with spending power, what debt load truly is what's more concerning is that you're not seeing the same type of refinance or home-related type of debt levels. those are actual life servicing, or allowing one to purchase an asset. you are seeing, as melissa pointed out, a shift into more consumer debt, and i think that is very concerning and the last thing, the walmart versus target debate the reason why you are seeing walmart outperform recently is because they sell a lot more staples as percentage of their revenue versus target, which is

a bit more -- i don't want to say discretionary, home goods and decor and clothing, things that you can argue are a bit more discretionary so, i think that is the way of the market telling you that the ability of the consumer to continue to spend at least on a discretionary level is reaching a stressing point. >> yeah, and i think just to argue kind of the glass half full here, i think at the same time you're seeing the debt levels are higher, cash levels are still at highs right now a lot of this debt right now, the $17 trillion is going to be marriages. we have clients all the time, 2%, 3% mortgages, don't pay that down, it's basically free money. keep that going. and you are seeing a lot of that is student loans, which people were not required to pay for the last several years, so, the balances have remained high. but i think a lot of that is, people got very nervous during covid, they want to keep their cash and prefer to put debt to preserve their cash. but starting to see more go on credit cards, i think that trend is a little concerning i don't think it's at overly concerning levels at this point.

>> that's an interesting point the study was noting there's usually a seasonality, fourth quarter, you go out and spend, you're buying presents and they you get your tax refund, you start paying that down, they're not seeing that this year, so, the seasonality is not playing out, tim. so, that is what is different. it may go to courtney's point in terms of wanting to keep a cash cushion or it may go to, we don't have the funds -- >> we don't have the funds we're getting anecdotal irs tax receipts that say not so much. i also listen to a number of the ceos that we've heard announce over the last few weeks almost boosting about their ability to raise their prices it's not necessarily great in discretionary land, and it gets back to companies like apple, the largest consumer company in the world. these are trends that at some point, i think come home to roost. and that's the dynamic walmart, i'm long walmart, i'm

less long walmart than i was three to six months ago, because i've been selling upside calls and slowly getting called away walmart is one of the most crowded trades out there you have to be careful when you own something like this, and if you look at expectations going into earnings, people are preparing, though i don't think walmart is going to disappoint, i think they have already seen some downgrade on the eps. so, again, be careful of these crowded trades we know walmart is defensive it's been defensive. >> and if we believe inflation is coming down, guy, should we be in a trade like a wall smart? gas prices are down 30% year on year, and so, if we are seeing these things come down, maybe you want to switch out of the staples kind of trade a little bit. >> i think, that's what, to tim's point, people are doing. we talked about it on friday the fact that you've had the stealth rally in walmart, taking

us back to its all-time high and that's somewhat cou counterintuitive a couple quarters walmart was taken out to the wood shed inflation is coming down, and i guess, paul tudor jones used the term, the fed can take a victory lap, claim victory, something to that extent. but my push-back is, yeah, it's coming down. we've had 500 basis points of hikes. i don't think the stock market and/or the economy has felt the full impact of that yet. when it does, that's when we're going to get the residual impact on the market, we're just not there yet, so, yeah, they can say, you know what, we tamed inflation. at what cost and i think you're starting to see it now >> there is a difference, too, between the consumer that will spend and earnings there's a difference between, you know, where consumers spend, they may spend a lot some place, but it's not a great investment, so, how do you separate that in terms of, for instance, you know, tim's quandary, walmart's a great stock, it's probably

positioned well, but there's been a huge rally in this one. do you still want to be in it? >> i think it's a good point we're kind oaf addressing half the issue. we've really kind of coupled inflation and the fed fighting it along with the market, right? i think what's happening now is that there's increasing focus on recessionary pressures, right? if you look at the loan portfolio manager survey, the dallas fed, what you're seeing the loan contraction credit quality slightly erosion and really what you're starting to see is credit standards start to rachet up all of that speaks to economic activity and so, for me, yes, the inflation side of the equation might have startled to abate, but the recessionary side of the equation is starting to creep up that's why a trade like walmart might be something that you want to look into doing >> i was going to bring up the same point i was actually optimistic that we're not going into recession, but sentiment is that we're going into recession

if you look at the a.i. consumer sentiment surveys, they are extremely high right now people are basically overly bearish for over a year and a half and they are waiting for the recession to happen, it hasn't happened and they're preparing for that that's where people are a lot more frugal and still getting that trade down effect, like a walmart of a tjmaxx. and that's going to continue, if the recession happens or not, if people think it's going to happen, that's where they're going to be spending >> perception is reality at some point, right >> no question i guess i just worry about corporate credit dynamics playing in here. i'm not necessarily worried about corporate balance sheets. but i worry about margins that have been coming from companies that have been able to finance at almost zero rates and the capital markets that these folks have done. the floating rate market is one of the largest sources of financing out there. borrowing costs are up 15% so, the profitability of

companies, companies that have had pricing power, companies that have had the top line working for them, a lot of retailers care a lot more about the top line, as we talked about, there are multiple trends that add up into that eps downgrade that we're talking about that i'm not sure we've even had >> all right our next guest plans to watch the retailers very carefully tony, great to have you with us. >> great to be with you, mel >> what are you going to look for? consumer continues to spend. >> because they have credit available, as timmy said, that's hitting a new level, so, at some point, you're going to deplete your cash and the money supply data, the movement of money out of deposits into money market funds and the use of credit cards is going to hit a level that's going to be unsustainable, so, i think we're close to it. >> are there are particular retailers that will give you the best read in terms of the economy? >> it's the more defensive ones. and i totally get, you know i'm typically the bull up until the

last 15 months, but i went back and i looked, because you are getting such outperformance in the defensive sectors that it made me think, maybe it's already priced in, but when you look at pre-recession periods before, they're usually outperforming going into a recession and then outperform in the beginning of it, and then reverse hard once you hit that low. and that's really -- sol -- mel, that's our game plan is to stay light in exposure and a little bit more defensive, without getting too negative, because it's when bad news becomes bad news is that final leg lower that you typically get. >> tony, it's tim, great having you. where are we in this eps downgrade cycle that we've talked about we're in that earnings recession, if you are, again, technically going by recession numbers, and i guess i just -- i just am concerned that companies aren't worth what they were yesterday in a rising rate environment, not only for the math that you do here, but because of that eps. >> good to see you, timmy. according to my earnings wizard,

yes, i have an earnings wizard, when you look at the operating earnings margin, it doesn't drop because of cost. so, you know, everybody goes into the earnings season thinking, okay, kcosts are goin to be up, of course, that's been true to a minor degree what really crushes margins is when the top line begins to weaken we're currently at about a 10% operating profit margin for the s&p 500. prior to 2019, in any environment, you were never in a double digit level, you were in the mid -single digit level. the way i'm looking at it, if you look at the earnings yield, for those that are unfamiliar with it, the reverse of the pe, the ep, you can compare it with six-month treasuries, getting an equivalent six-month treasury yield that you get using mill $210 estimate. but not armageddon level, it's

210 versus 220 with that reason, there's no reason to make a major bet >> just seeing what your positioned in, tony, looks like you are in a bunker, i mean, by tony dwyer standards, you are. if you are an average person at home and there are plenty of people out there, you invest main si in indices, do you invest for the next six months in an index or do you invest in a -- >> i think it's the next three months in the t-bill this is a levered system when it decides to drop, it's going to do it really quickly. i think the debt ceiling debate, you know, somebody asked me today, what's the catalyst and we're all so full of it. we don't know what the catalyst is you never know what the catalyst is, or you wouldn't have this massive drawdown it's going to be something that's unexpected in some way. here's what i do know. the bull story is kind of that october was the low and was discounting everything the nasdaq a.d. line, all the

biggest stocks are in the nasdaq the nasdaq a.d. line made an all-time low on friday the volume a.d. line for the new york stock exchange is making a new low. these things don't typically happen when you're coming off of a major bear market low, so mel, we're looking for one more push lower and it going to be nasty and you and the team, the last time the yield curve inverted end of 2019, you and the team, we had a video on behind me, a picture when i was in studio of the grim reaper and it was the dwyer doomsday clock it's all about money when it's not, like now, you just want to stay on the sidelines. >> tony, good to see you thank you. >> great to be with you, mel >> tony dwyer. >> tony is the reaper. >> apparently he's the reaper. going to be quick and nasty. guy, i know you're in that camp. >> yeah, but blue oyster cult

once said so famously, don't fear the reaper, because -- >> don't fear. >> because when the reaper comes, it doesn't matter anyway. tony, it's amazing, he gets painted in such corners and his work is extraordinary in terms of what he's doing he's not a per ma anything, he's just per ma smart. and he's talking about the things we've been talking about. and those advance declines, throw this up there, as well microsoft and apple combined are more than 14% of the s&p 500 that's extraordinary and maybe that can continue. maybe the market can continue to be dragged up by a handful of names. i don't think that's the case, though >> all right. coming up, eu approval microsoft's act vision deal getting the okay from european regulators we have other details straight ahead. but first, shake shack shares jumping as activist investors get involved more on the food fight next. don't go anywhere. "fast money" is back in two. ahhh! icy hot pro starts working instantly.

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welcome back to "fast money. shake shack topping the tape today, soaring 8%. highest close in more than a year stock jumping on a report that engage capital has amass ed a

huge stake and is requesting three seats on the board it was curious to see the statement, basically saying our stock is up a lot this year, it was down a lot the year before and i think that's what engage capital was concerned about, tim. >> well, management's been very focused on profitability, and you've heard that in the earnings call, and they should be, but maybe now we kind of get why. again, three seats possibly in play, a voting structure, a share structure that could be streamlined, made more interesting. i just say this for the stock and the move that it's had, it's been extraordinary and i would also point out that it's not just where the activist investor and a lot of investors are looking at the stock today much of the street is coming around to a doubling of profit story over the next three years. the issue is the operating margin, and that really gets into the crux of the activist argument about, they could be more profitable.

so, again, i think you had a big move in the stock, i think you priced in a lot of news and i'm not sure i'm chasing it here >> court >> i wouldn't be chasing it here, but i think this is good news clearly this is what investors want to see is the return to profitability, which they have not been able to show so far a month or two ago, there was a survey that came out, and they were one of the ones that people felt they were getting less bang for their buck people were saying, i don't know if it's worth it any longer, rather go to fast food or go to restaurants. and that's interesting, you are starting to see consumers pushing back on that they've had a very strong pricing power, which is very impressive from them, but i think a lot is priced in >> how much is that burger, guy? didn't you used to work there? >> yeah, i did i know -- rhetorical question, because you know that i worked there, and, i mean, if the crack staff back in ec wasn't, like, flipping through a "people" magazine, they would put the

video up i'll spare them up and say, yes, i did, number one, and i think we pointed out in december, the stock traded down to levels we saw, i think, in march of 2020, 37 and change. i didn't think it would double, but here we are. valuation is a problem they need to -- there it is, by the way. >> where's the hair net. >> no hair net >> or gloves >> oh. >> wow >> yeah. >> he's using his hands, isn't he >> i'm sure shake shack was not thrilled with that >> no, can i say -- >> disclaimer, disclaimer. >> that's a great job by our crack staff back in ec i will tell you that the stock went on a multirun move after that, just for -- just put in perspective. but the stock needs to grow into the valuation, i guess is what i'm saying to stop here at 70 for awhile makes sense to me. >> you owe this crack staff, by the way, an apology, because they're not flipping through "people" magazine.

>> i'm -- it's a joke! >> i know. >> does anybody -- of course they're not. i know that. i've been in the control room. they are laser-focused >> i'm sure. >> they do an amazing job. that's why i call them crack staff. if they didn't do an amazing job, i wouldn't say it counterintuitive, i know >> and they probably don't even print "people" magazine. a lot more "fast money" to come here's what's coming up next. gaming go ahead. european regular late tomorrows giving the microsoft/activision deal a big thumb's up. but the bat is far from over the details next. plus, financial flop one money center bank lagging the group. so, is there more pain ahead, as rates keep rising? you're watching "fast money," live from the nasdaq market site in times square. we're back right after this. what do you see on the horizon?

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welcome back to "fast money. european union regulators approving microsoft's $69 billion takeover of activision blizzard today a major win for this potential deal, when was blocked in the uk due to anti-trust concerns the eu saying microsoft offered remedies in the cloud gaming business that staved off anti-trust issues. could this be good news in terms ofs getting u.s. approval is th question >> marginally. you still you have the uk that voted it down, you have the eu and they purportedly came to some, i guess preliminary agreement for a ten-year licensing agreement. you essentially have activision, which makes these games and microsoft, which produces the

consoles you -- that they would be played on so, i just don't know if the competitive landscape -- i really that's what's going to be the u.s. regulation's push-back, is the competitive landscape to justify all the other cloud distributors and gaming cob sole providers that would be using these games? and that's still a very opaque, not so my your detail, in my opinion. >> we have an ftc here, which is an activist ftc which is outspoken about deals. they don't want deals to happen, i mean, that's what we've been saying the whole time. big tech is not going to make any deals, because they are too big. >> they're not going to listen to this. i -- they can -- they'll listen to it, come in one year, but i don't know if it's going to move it i will say, i don't think this deal is -- is something that really pushes out all competitors. i look at microsoft's place in hardware, the console balance there, and their ability, also,

to offset a lot of these services, so, i think the deal gets done. and it's just -- leaves you with who is next to go down there aren't a lot of people left, and, you know, that may be the place to be looking for the trade. >> microsoft, as a shareholder, do you think that microsoft needs this deal now? it's got this -- it's got a.i. now, it's got a.i., and a.i. is going to add to earnings in so many different ways, courtney. >> yeah, i don't think they need this deal. i think they have plenty in their pipeline that are going to be beneficial to them. i think it would be helpful. i agree, i don't know if this is going to go through yet. i don't know if what's going to happen in the eu is going to trump the uk there was a statement that, this isn't going to change our opinion. i don't know if this is going to make or break things >> guy >> $70 billion deal for microsoft, $2.3 trillion company is not necessarily going to move the needle but i like where tim is going with this, and if you sort of

read between the lines, what's next electronic arts has lagged you have to believe they are on somebody's radar screens there's another simple out there whose market cap allows to speak to it. people will start talking about that, so, there are names out there that could be in play on the back of this this deal, if it gets done or not, i'm not sure if that's the story. the story is, who is next in line to sort of make moves like this to potentially could get done and to me, electronic arts has to have a huge bulls eye on their back >> like who? in the environment where big tech is not going to do the deal, or it's going to run up against road blocks, who does it >> maybe a netflix netflix has been talking a little bit about their parlay into gaming. disney's balance sheet is strapped here, but we've talked about the big media companies. coming up, focusing on financials as one money center bank lags, so does the rest of the group.

why one expert says it will effect all gerard cassidy will join us to talk big banks don't go anywhere. for "fast money" right after this. get your trades to go with the "fast money" podcast catch us any time, anywhere. follow today on your favorite podcasting app we're back right after this. did i say chicken wrong? tired of people not listening to what you want? it's truffle season! ah that's okay... never enough truffles. how much are they? it's a lot. oh okay - i'm good, that - it's like a priceless piece of art. enjoy. or when they sell you what they want? yeah. the more we understand you, the better we can help you. that's what u.s. bank is for. huge relief. yeah... ♪ - double check that. yeah... eh, pretty good! (whistles) yeek. not cryin', are ya? let's tighten that. (fabric ripping) ooh. - wait, wh- wh- what was that?

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so they can do more of what matters. benefits. payroll. compliance. trinet. people matter. welcome back to "fast money. stocks in the green ahead of more debt ceiling negotiations tomorrow the dow climbing 50 points the s&p up three tenths of a percent and the nasdaq up more than half a percent. sarepta surging after a gener arty drug was backed by the fda. we don't know if they'll agree with this panel, but it is likely they will, guy. >> yeah, likely that they will the vote was 8-6, and if you listen, if you read the commentary, wasn't like a resounding 8-6 i mean, there are clearly some people on the fence, but gene therapy is real. and this is a big win, clearly question is, how do you trade

the stock here we're right back to the levels we saw in march before it traded down 115 and here we are around 158. huge volume day, 8 million shares i will tell you, i would be inclined to stay with this, because i think it's probably going to sneak past at the end of the month but there's absolutely nothing wrong, if you had this buy their event on your bingo card, taking some money off the table i don't want to try to play both sides, i'm inclined to stay long, but the disciplined thing is probably to take some money off the table. let's turn now to a battleground in the banks. bank of america underperforming over the last three months the stock is down 22%, wells fargo is down 19%, citi is down 11, and jpmorgan down 6% so, why have investors been turning their backs on b.a.c let's turn to gerard cassidy great to have you with us. you say the answer lies in the difference between its bond

portfolio and its peers' bond portfolio. >> yes, me lis sachlt when you take a look at the understood performance of bank of america, relative to its peers, i think the big hangup that investors have had is that they have a very large bond portfolio. the held to maturity part of that portfolio is about eight years. and so, that's weighing on the growth, the net interest income, since that portfolio's at lower rates than what you can get today. >> so, does that material, i mean, versus the competitors, are your expectations for bank of america, are they much different because of this difference in this bond portfolio? >> i wouldn't say it's much different, melissa, but in view of what's going on in the banking sector with what we saw earlier in the year with the failures and the big issue of the unrealized losses in bond portfolios, you know, becoming a concern for investors, you know,

bank america has those issues, as well, you know, the unrealized losses. but they'll manage through that. theportfolio will burn down, you know, in the years to comment and they have plenty of core deposits, so, we're not worried about that, but it may weigh on their profitability again in the net interest income line and i think people have moved to the sidelines because of that. >> hey, this is courtney here, thank you again for having us. i understand your point here and why they're underperforming, and i'm curious to how much, as you are seeing consumers who are nervous about banks, or heading to a jpmorgan, which is tried and tested, considered a safety play, so, i'm wondering how much plays into the underperformance, and how much is that priced in >> courtney, i'm with you on the last point, that it is definitely a buying opportunity, because it has underperformed. and as bank of america showed in the first quarter results, they saw an inflex of having deposits

like jpmorgan, so, nobody is avoiding bank of america or jpmorgan for that matter, and the entire deposit flight problem, as we move away from those failures of, you know, march, i think that's going to die down further as we go forward and the banks will start to regain some momentum as people understand that those banks that failed were really just problems and it's not reflective of the industry at all. >> to the banks regain momentum, gerard, simply because it will look like a bad situation that gets a little bit better, or are there real -- i mean, if you think about what is ahead, we've got a debt ceiling debate, which could drive bond yields higher, which would make it worse for the entire sector in general, we've got potential consumer under stress, tightening credit, banks have to pay out much higher interest rates to maintain that deposit flight, i feel like there was a reason that banks stuck to 0.1% on a savings deposit for as long as they could, until they had to

raise it to market rates >> no, you bring up very valid points, melissa, i would point out that, you know, the way that deposit baiters are working, you know, raising those deposit rates, very similar to past tightening cycles, and what's fascinating to us, in the last four tightening cycles, once the fed reaches the terminal rate in fed fund rates, you start to see the banks behave better. what's likely to happen, deposit rates stop going up one to two quarters after the terminal rate is reached but the banks are still reinvesting cash flows from the securities portfolio at higher yields and the margins start to stabilize. and we could see that by the end of the year. but you're right, you know, there is a lot of cross currents out there in the economy and that is certainly effecting the bank stocks, but if we really have seen the last of the fed fund rate increases, that's going to be, i think, a real positive catalyst for the banks on the next 6 to 12 months

>> hi, gerard, bonn that win here if you look at the investor calls, you hear a lot of discussion around loan growth, portfolio growth as we enter a more challenging loan growth environment, can you speak to how much we should be thinking about the large money center banks versus the regionals and who might be more challenged in that type of environment? >> it's a really good question, because as we've seen loan growth on a year over year basis, is still high single digits for the banks, but sequ sequentially, since the beginning of the first quarter, it's slowed down much more dramatically and this is not uncommon during this part of the cycle you know, the loan growth in the u.s. banking industry typically grows at the nominal rate of gdp. so, if we see nominal gdp growth this year of 4%, 5%, we should expect 3% to 4% total loan growth this year but in terms of money centers versus regionals, the money centers are driven much more by

consumer lending than the regional banks the regional banks are driven by commercial and industrial , and what we saw in the loan officer survey on lending, the demand for loans from commercial and commercial real estate customers have really fallen off so, it's a long way of saying, the money centers could be the better play on the loan growth aspect of owning a bank right now. >> gerard, great to see you, thank you. >> thank you >> gerard cassidy, rbc multiple choice. pay attention. get a pen out. >> oh. >> jpmorgan, bank of america, or none of the above. tim? >> boy having underperformed jpmorgan for the last six months by 30%, i'm going to take a, bank of america. was that it? or was that b? >> i think it was b. i'll take that you played well. >> at least i played the game. i did that in school all the time i got the answer right but i wrote in the wrong letter.

explains a lot >> that was your excuse? >> just did it right there v verbally >> guy, what would you say >> first of all, that's not true he got -- he got it wrong, i mean -- when you're wrong, you're wrong >> that's fair >> i'll play your reindeer game. i'm with tim on this one i don't know what letter bank of america is in that brief multiple choice, but i'll take bank of america, just in terms of the mean reversion trade. >> all right we want to get back to leslie. >> i wanted to make a correction on the 13-23 f filing we told you that they added to b positions in bank of america and citigroup. they added the bank shares actually stem from holdings ownedubsidiary and beginning with today's 13-f

filing, the holdings of gen-re will be included in the 13-f filing u.s. to clarify, berkshire did not buy any additional bank of america or citi shares during the quarter. those were inherited through this affiliatedubsidiary >> thank you. a check on the econochinese consumer the latest from beijing coming up. plus, tesla gearing up for a shareholder meeting tomorrow we'll hit the options pits for that trade ahead ick around ick around more "fast money" in twolay they design cars that look like swords... (engine accelerates) gladiators... the future... ♪ or... wow. nissan knows what thrill looks like. because they design it into every car they make.

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welcome back to "fast money. chinese internet stock jd.com rallying more than 6% today. fo. so, what is going on in the minds of chinese consumers eunice yoon gives us an idea look >> reporter: for this beijing used car salesman, business has never been this good he sells nine cars a month before the covid controls, he would sell four. "in the past, people wouldn't even consider buying a used car," he says. "today, it's all about price."

while sales of new cars dropped 7% in the first quarter from last year, sales of used ones rose 10% to 4.3 million. popular chains like chinese tea brand put of ref deuced price versions of their standard menu. signature drinks sell for $4 its new simpler options, $2.80 but some people hurt so badly, they're looking to get things as cheap as they can. a hot trend is selling nearly expired food at bargain basement prices, like at discount retailer hot max or grocery outlets backed by alibaba. discounted by at least half, and often up to 90%, depending on the expiration date. "the pandemic has changed people's mind-set. people are panicked about the economic outlook, job security, and falling income," this shopper says so, we want to save more april retail sales are out tomorrow the forecast is for double-digit growth, but that's compared to

last year, when the economy was tied up in pan decking restrictions melissa? >> eunice yoon, thank you. she's live in beijing for us tim, what is your take the chinese stock market tells us there's doubts about this recovery >> there's doubts about the recovery, but on a relative basis, there's no question about where we're going here and we're hearing this out of ma macao, in terms of where they are at least over the last six months, the improvement. i look at alibaba and really not necessarily about the chinese consumer they are about the chinese government so, baba is going to announce, they are expected, their gmv, to be down about two points from where they were about a year ago. none of this is a major surprise i do think that the second half of the macro story in china is going to be a lot better than expected not going to be 9%, but not going to be 5% i think it's going to be on the higher end of expectations but i still don't think chinese

stocks are trading on that sentiment. i think baba is very interesting. they announced the spin-offs of the business units, those will be catalysts when they happen, but we're still waiting. >> eunice is talking about price sensitivity, to the point of consumers buying nearly expired food for massive discounts, and we heard from all of the luxury reta retailers that reported very good sales, and -- >> killing it. >> yeah, they're doing very well, thanks to the china reopening. >> that's what i was going to bring up unfortunately, inflation is kicking in, after covid reopened you are having the lower income consumer is hurting more and they're having to trade down, they are having to look for discounts, but the higher end consumer has not been hurt as much and that's what you're seeing in china. luxury brands, like in france, are doing fantastic, but people have to buy nearly expired food. so, that obviously is a horrible discrepancy, but that's exactly what's happening there and i think that is what you want to look at going forward is, interesting article in "the

wall street journal" today about how investors are worried about the chinese government and what that's going to mean for chinese stocks so, people are looking to luxury brands in europe and the u.s. as a way to invest in the chinese consumer without investing in china. which is an interesting idea >> and not just the government in terms of putting the foot on the throats of investors, but the relationship between the u.s. and china, guy, which is something you've been talking about for a long time. anything with taiwan and, you know, i don't know, it could be very unpleasant for u.s. businesses over there. >> yeah, i think so, and we don't say that to create panic in any way, i mean, you just sort of reading the tea leaves and the rhetoric continues it doesn't go away and i don't think one day you're magically going to have something between the two countries. if anything, it's going to get racheted up as the year progresses i think there will be a couple of the u.s. companies that fine themselves in the cross hairs. i thought it would be starbucks, it hasn't happened clearly apple is probably the poster child for that, it hasn't

happened the question you have to ask yourself, is it a matter of time, or are they going to skate through? i think it's a matter of time. >> yeah. bonawyn? >> yeah, listen on a valuation basis, there is a compelling story to look at across all the names you laid out there you really have to ask yourself, why do they continue to trade at these suppressed levels, after we've had the reopening. one, it just shows, you know, i don't want to be rude, but the whimsical nature of some of the g geo-politics the risk between us escalating, as well as decisions they make that seem to be happen on a whim you have a profitable company like baba, like tim mentioned, that was tripped down to bare bones. are you willing to deploy capital in a meaningful way where the rules can be changed overnight? coming up, one options trader is making a bullish bet on tesla speeding higher here. we'll bring you that call and much more ahead on "fast money."

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do not miss cnbc's special presentation, david faber sitting down live with elon musk tomorrow, right after tesla's shareholder meeting in austin, texas, talking tesla, twitter,

a.i., spacex and much more that's at 6:00 p.m. eastern time right here on cnbc tesla's options seitzing a huge amount of action today mike khouw has all the ction mike >> yeah, tesla, as usual, the biggest single stock option today. the options market implying a move of more than 4% after that about yule meeting the busiest options were the 170 strike calls, the ones that expire at the end of this week, but the biggest single trade was a purchase of nearly 9,500 of the may 26th weekly 170 calls. the buyer of those paying $4.75 a contract that's $4 million in premium betting on an upside move of 5% by the end of next week. >> thank you for that, mike. guy, if you were able to sit down with elon musk yourself, what would be the first question you would ask him? >> oh, oh my goodness. >> what -- what is the financial -- what are your requirements to continue with your bankers and your debt holders in terms of this twitter deal like, what are you on the hook for? i don't know how i would phrase

it, but it would resolve something around the debt load around the twitter deal. >> so, the implication of that, does he have to sell shares -- >> sell more tesla stock >> right, right. tim? >> correct >> i would be interesting in where he really cares on margin to be aggressive against the come petition. and really, you know, i think i know what he would say when i would say, can you continue to push prices lower, and i think he'd say yes >> except that he's been raising pr prices, which is a strange pricing dynamic. price cuts and then slowly they creep higher, court. and we heard from the earnings call that he looks at these prices every week. >> yeah, which is amazing you can do that with everything he has going on right now but i do think that it is something, they have the ability over their competitors, they are able to reduce prices to get demand where they need it or raise it when it's going up and i think they have that benefit i do think it's good, actually, that he's getting a ceo into twitter, so that will put more

of his focus on tesla so that will help their stock going forward. i think it's still pretty overvalued here, so, it's nothing i'm touching, but we'll see how tomorrow goes. >> yeah, i mean, my question is simple what is your target market share? so, you're looking at these prices every week and you're changing them seemingly trying to take market share away from competitors, but what is the threshold you're trying to get so so we maybe understand what the strategy is behind the fluct fluctuations >> all right, we'll find out tomorrow for more options action, be sure to tune into the full show friday 5:30 p.m. eastern up next, final trades.

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final trade time guy? >> alcoa off a multiyear deal they just signed >> tim seymour >> the first time we got blue

oyster cult into "fast money." >> really? >> yeah, i think so, i hope so but don't fear the dollar. eem. >> courtney? >> home depot. h earnings lowered before it comes out this week. >> bonawyn >> three-month treasuries. >> thank you for watching "fast. "mad none" starts right now.pla >> "mad money" starts right now. thanks for watching "fast. 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 just trying to make you some money. my job isn't just to entertain but to educate and teach you so call me at 1-800-743-cnbc. or tweet me @jimcramer. over the weekend we got very positive but unsourced stories about how a debt ceiling, well, deal could be, i don't