parse through that, i think. >> yeah. well, great stuff from vegas today. safe travels, see you back on set here with me tomorrow. in the meantime, major rally for all of the -- all of the averages, all the stock averages today. we got claims tomorrow, xuexistg home sales, walmart. that's going to do it for "overtime. "fast money" begins right now. right now, the major averages posted big gains and the banks are bouncing back, one trader says there are new signs of trust in the system the details and the ripple effect straight ahead. plus, elon musk sounding the alarm on china, saying that beijing's rising tensions with taiwan should be a concern for everyone is he right? we'll debate that. and later, building a mystery. mortgage rates keep climbing, but so do the builders and then the monster options action for bausch health this is "fast money," i'm

melissa lee. on we begin with the markets, posting strong gains money center and regional banks leading the charge semis and travel stocks marching higher while the equity markets are cheering, the credit markets are starting to sing a different tune small private companies are defaultin ing at an alarming ra. and repeat bankruptcies, companies that have defaulted once, are now defaulting for a second time, they are also on the rise, reaching their highest levels since 2009 and near all-time highs add in that, lending standards are nearing historic levels of tightness and one trader fears trouble could be right around the corner michael, this is your expertise and you say this is a red flag >> sounds pretty bad, doesn't it >> it does >> it is a red flag. i mean, let me start with what i think the big issue in markets are today. like, everybody either wants to think we're in recession or that recession is never going to happen and we're not in recession currently, right, but it clearly is the beginnings of a slowdown. and we're seeing that, the 500-plus basis points of hikes

that the fed has basically enacted here, is having an effect in the market you're seeing lending conditions tighten, that's what's supposed to happen. that's why the fed tightens. it's to bring down lending conditions and as lending conditions tighten, spreads widen, cap-x slows, what happens? companies start to default the weakest links go first and that's what we're seeing >> yeah. karen, you sort of were -- have been of this belief for some time and we're starting to see the cracks now >> right well, so, i've been thinking that the high yield spread that this credit spread would widen and so, i'm sure hyg as kind of a hedge to many things, but i have been surprised with how little it has actually worked. and so, as michael said, we're starting to see the worst ones i feel like if your business is doing okay, even if your balance sheet isn't great, there's almost always a way out. there's a way to extend, there's a way to issue equity.

i don't know if we talked about specific names, it's a business probable and a balance sheet problem. and so, i would have thought we'd see more of it, but we haven't, around -- i don't know if it's rates calming down or the idea that the end of hiking is near, maybe maybe some will be able to roll over debt that i wasn't expecting they'd be able to. >> remember, karen, we had seven bankruptcies -- >> but they were all tiny companies. until we see a really big bankruptcy >> well, that's how it starts, though >> as a tiny bankruptcy? >> well, certainly, yes. small companies tend to lead large companies. in any sort of environment and i think that's what we're starting to see. seven bankruptcies in 48 hours is nothing to sneeze at, when you haven't had, really, any for the last year. and that's concerning to me. you enter into a situation where all of these hikes start to take effect, and you have the regional banks that are pulling

back on lending even her and what does that mean for credit i just don't think it means good things >> and through the lens of the stock market, we've been talking about small caps they have the issue with the highest cost of capital or access to credit right here, so we're seeing that reflected unchanged on the year, the russell 2,000. the zero interest rate environment here, how many spacks have we seen go from ten basically to zero. there's dozens, if not hundreds of those not the same thing that we're not talking about, but a lot of those are going to be delisted, and a lot of investors think of that stock is going away there will be reorganizations. and the other thing, before all of this happened with silicon valley bank, there were lots of very prominent vcs calling for mass extinction events to start this year. well before there were any issues with silicon valley bank, because basically, how these companies were created, and how they got funded, and what they were doing, was not going to be sustainable.

so, we hear that expression zombie companies were really kept alive in this zero interest rate environment, and that's what this all culminates it doesn't matter there were seven small companies, it is going to be a trend. i think every company tries to hang on for as long as they can, but sooner or later, if we're going to have higher for longer and tougher access to capital, it's just not going to work out great. >> julie, small, mid cap is your neck of the woods. and that is the area that will have a little bit more difficulty securing the financing. >> yeah, i think that's right. but to pick up on dan's point, you know, the bankruptcies that we started to see were really in february and not even before silicon valley bank was happening. and it is very much tied to what's happening in the vc community in terms of saying, hey, we want our businesses to be profitable. for me, as a small and mid came investor, we really try to focus on businesses that have zero debt and it's for this reason. you need to have the level of cushion that allows your business to kind of power through any kind of recession.

so, i think having businesses that have good, durable earnings are great, but a pristine balance sheet, there's no price to pay for that. >> how long, is there like a typical period where you are starting to see the canary in the coal mine and it goes to full-blown sort of, this is what it is? >> yeah, it tends to be about 6 to 12 months so, you're in a range now where, in the back half of this year, the first half of next year, you should see more and more stress. this cycle is going to be a little bit different, because so much of the lower quality debt out there was financed through the loan market. and the loan market has floating rate debt. and so, companies had a choice many years ago, do i want to lock in very low interest rates for a long time or issue floating rate debt and what do they choose to do? it was to issue floating rate debt and now they're paying a lot more for that. >> michael, is there anything we should look in the the private equity market, funds that are set up to take advantage of this environment and, again, are there things that investors

should be looking for, you know, certain activities, like, funding, you know, again, we haven't seen a lot of huge down rounds in the private tech market, but things that maybe in small cap land we might see in the public markets with private equity companies >> well, listen, i think looking at the publicly traded private equity firms out there can be a tip a little bit, so, you probably want to pay attention to those especially the ones that have big private credit and private reexposure >> let's get to retail now, turn to target. the retailer wrapping the day more than 2% higher despite warning consumers are getting kaushgs on spending. they raised quite a few eyebrows when they said that theft-related to organized crime totaled more than three-quarters of a billion dollars in the last year walmart reports tomorrow morning. so, are we going to see a similar message here, karen? it was pretty good, considering we were thinking it wasn't going to be a great quarter for them >> yeah, all things being considered, it wasn't terrible they had this persistent

problem -- they were sort of the first one last year to really have it kindof on a bigger scale, and then we saw it from a number of other retailers, though they seem to have the worst problem. and i can't help but think, they haven't quite fixed it, so maybe they'll continue to have the worst problem of the group, but i thought it was decent, you know, they didn't -- the guidance was a little softer than i would have liked, though it wasn't terrible but they were talking about, march was difficult, which we expected, given what's happened with the banking situation april was a little better, okay, sort of, and may, they didn't give us a great feel on may, so, i'm long-term, i'm kind of surprised it held in as well as it did >> when you piece together what we heard so far from the retailers, you really get the picture of a tradedown going on amongst consumers, peari parrink m projects with home depot >> we see the consumer savings data and not going the right direction, relative to consumer

credit right now, and so, again, we have unemployment at a 70-year low. that's the one piece of the puzzle that hasn't come in line with what the fed would like to have happen with the economy if it starts to tick up, i have to think you're going to see that in the retailers. even though they've gotten their inventories in line, we're going to start hearing more and more of that and i think that could be, like, a little bit of the canary in the coal line. i know we're going to be talking about in a recession, not a recession. we are in a profits recession right now. and as soon as we see unemployment start to tick up, it's going to be reflected in these retailers. >> the consumer is hearing all this talk about recession, they're going to pull in, they're going to be battening down the hatches in case of a recession. >> i think that's very much what the fed has in mind, in terms of thinking about not just inflation, that's actually happening, but the inflation that's being imbedded into customers' behave yore and you see that at target, you see people choosing nondiscretionary items, because

they are concerned about higher prices going forward you have a report out today that says 38% of people out there are struggling to pay their regular bills. it's starting to really hit them it's interesting, i do think there are pockets within retail that are investable, even in a recession. tj is a great example of that. if you go to a tjmaxx, you'll notice that customers aren't just shopping on need, they're shopping as entertainment, and i think that holds true. you get a tradedown customer and great traffic is the life blood of any retailer. so, that's an interesting business to look at right now. >> for me, let's bring in terry lundgren, the former ceo of macy's and neiman marcus terry, welcome to the nasdaq market site, welcome to the show >> happy to be here. >> how do you think the consumer is going to spend, you know, some level, to some degree, during even tough times? so, as we enter this sort of period of sort of unknowns, how do you think the consumer spends, how should we think about the retail landscape >> you have to look at it by income level so, as much of this conversation

is right on track as far as i'm concerned. the lower household income consumer is buying needs and that's basically all that the paycheck is allowing at this point. so, they're rotating out of discretionary. that middle household income consumer, that consumer is trading down and so, we're starting to see the benefits that will, i think, occur here in the months ahead, in the quarters ahead for the offprice, even some of the mid tier department stores may benefit from the tradedown for them, may be possible some of the bankruptcies may benefit those. and the high end consumer, they still have money, less affected, but they're trading into experiences, and so, the airlines are full, the airports are full, the car rentals are, you know, sold out and, you know, the concerts are sold out, so -- you know, all of this is going to -- is going to impact goods. and we had a really nice uptick during the covid period where the consumer started buying

goods again, and i think that's shifting back to services, and so, i think it's going to be a challenging period here for many retailers in many categories over the next couple of quarters >> joufyou graduated from arizo way back when -- >> that's right. don't mention it just a few years ago >> so you navigated various periods. in your experience, when we are going through, you know, a credit tightening period to come, where, you know, period of tightening rates, period of maybe a recession, maybe not, how do the consumers react >> yeah, what i find is that the consumer takes in all this news and almost all the news that gets reported is bad news. we talked about earlier, i was listening to the program, talking about store closings, and, you know, no one talks about store openings, but for the last several years, there's been more stores opened than closed the big stores are closing, smaller stores are opening, but there's 800 more stores open this year than closed in 2023,

so, what they're reading isn't that they're reading all the bad news and so, that effects consumer confidence and when consumers are feeling like there could be a recession around the corner, i might lose my job, my company might not perform well, they might start laying off, when they start thinking that, they pull in their spending >> so, terry, you talked for a minute in the green room about the ecommerce evolution at macy's, but do you think that the sort of -- the push that the pandemic made on the e-commerce growth, has that plateaued and what do you think is the long-term, sort of, what's the right stable amount of sales that will be the -- >> it's a good question. it was something that we thought might happen and in fact is playing out this way prior to covid, '16, '17, '18, '19, the online penetration as a percent to sales was growing between 100 and 150 basis points

in penetration to total sales each year. and that was consistent. and then all of a sudden covid hits and we go from 11.5% online per chases to the total, to 20%, you know, because, hey, stores were closed by the government, and because that's -- no one was leaving home so it spiked this last report was now it's back to 14.7%. and if you do the math, it's basically back to where we were. it's -- back to the main so, i forecast it will be 16% fa year from now, and that will continue to grow, but at not the pace that we saw during covid. so, to answer your question, i think it's peaked to where -- back to the mean so, we'll continue to see growth, and what that means is that it will effect physical stores, and so, getting that balance right of physical stores is really important. a lot of that has happened

even though there are new stores opening, they're mostly smaller formats or offprice or they're, you know, individual specialty stores, not the big box format stores >> last quick question what is in the terry lundgren portfolio when it comes to retail stock >> well, i happen to like -- i think target did a good job, and you all mentioned that and you suggested that they did a pretty good job i think the most important thing with that, they got their inventory in line. it was out of line they got their inventory in line i give them credit for that. when you are doing that, it's hard to grow sales so, i think they put themselves in a good position and i actually like walmart very much you'll hear from them tomorrow i don't know what the numbers are, but i wouldn't be surprised if they surprise on the upside 55% of their business is in food, grocery, and they are the largest, you know, grocer in the united states. and that obviously still is benefits from inflation, and i think they'll perform well >> do you like target and

walmart over macy's in this environment? >> i love macy's and i will always love macy's >> you never know. >> always be the most important store, and bloomingdale's too. >> terry, good to see you. thank you so much. >> my pleasure >> terry lundgren. how about you? >> do i like macy's? >> yeah. >> well, something, you know, we often talk about is how smart the equity investors are -- the bond investors rather than the equity investors this is an unusual one i looked at the macy's debt and looked at macy's equity and the macy's debt is doing just fine it's just fine they're telling you, there's not a problem. the macy's equity is saying, oh, my god, there's a huge problem i think the disconnect is on the equity side. some of the multiples, i mean, 4 1/2, priced to sales, .4, these are crazy low numbers, and the debt is telling you we're okay

>> well, i obviously like the -- karen, your comment about the debt side being right. you know, listen, at the end of the day, i think there's a little bit of a disconnect oftentimes between how bond markets trade and equity markets trade. equity markets, to dan's point, are going to trade based on earnings so, maybe there's some uncertainty about how earnings are going to play out and the retailers across all sectors, but for someone like macy's, other balance sheet is reasonably strong, you sort of have limited maybe default risk, even if you have an earnings decline. and so, i think that's sometimes part of the reason why you get these diver jenses, but clearly i always think the debt's right. >> and smarter >> and smarter. coming up, watching afterhours movers. shares of take two and cisco on the move. plus, keep an eye on building home builders continuing to rally as demand doesn't seem to wane, but can the climb continue as the u.s. heads towards a

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welcome back to "fast money. take two interactive surging, while cisco dropping despite a

top and bottom line beat both calls under way let's get to steve kovach with the latest >> take two shares up as much as 11% earlier, but revenue beat and bullish commentary about the coming pipeline of games next year is what's driving the stock. revenue was a beat $1.39 billion versus $1.34 billion adjusted and the outlook was a little light of expectations, that's just starting this quarter, up to $5.5 billion expected versus -- anticipated versus the $6 billion expected. here is the unusual move, mel, that's sending the stock higher. very bullish commentary in this earnings release about next year, the company's fiscal 2025. the ceo giving outlook for 2025 and the earnings call, saying the releases next year will see a jump in growth after what he called several groundbreaking titles also predicting new games will bring in over $8 billion in net bookings if you allow me to put on my

nerd cap, this screams to me the next grand theft auto game that is the biggest entertainment property ever. it did a billion dollars in sales when it came out a decade ago and still continues to generate more and more sales for take two so, reading in between the lines, melissa, between this bullish outlook for fiscal year 2025 and the fact that some of that footage from the game leaked last year, it sounds like that gta game is actually going to come pretty soon. this is just speculation, they wouldn't say on the call, but based on the revenue outlook numbers, that's what it says to me >> your eyes lit up, steve >> i know, right >> talking about new release steve kovach, thank you. >> thank you >> interesting the company gave guidance, typically does not give guidance that far out julie, which speaks to me of the confidence that maybe the company does have about this pipeline >> i see it a lot with businesses where they know they're going to have some hard sledding in the year ahead, and so they give you two and three-year forecasts to get you excited and for longer term

investors like us, that makes sense, but i think in the near term, you are really having to look across the kchasm that's wide they have 87-plus titles they're talking about, and that's meaningful to their earnings growth i think what's going to be kind of critical to understand is how the cash flow progresses in this business and how they're able to manage through 2024, but it sounds like they are doing a very good job on their messaging from the stock reaction >> i agree with julie about the messaging. and i think, you know, you said, they don't normally do this, and i think of the ceo, he underpromises and overdelivers he must feel very confident and i expect he's going to overdeliver. >> except that this quarter was really bad >> the earnings are not that great. >> no, the earnings were bad the guidance for 2024 was bad. the gross margins, they missed by, like, 4% this is not a good quarter and then you put that together with th-- here's the quote.

extext of the development timeline for several high profile -- they are pushing out all the things that it trades at this well above market multiple into 2025. that's not the thing i would be paying up 10% in the aftermarket for. >> all right. let's get to cisco here. bertha is here to take us through the numbers. bertha >> hey, melissa. cisco crediting higher pricing, the action they took last year, now starting to kick in, providing a beat on both the top and the bottom line with revenues up 14% year over year and stronger margins for secure and agile networks division. due to improving supply constraints, they were able to cut down their backlog, though they'll end the year with double the normal levels. on the call, chuck robin says lead times have come down 40% over the last two quarters in terms of orders and user demand, he said, is driving growth customers are implementing some

of their prior tech investments now they've gotten it and he says they see growth opportunity as they enable hardware and software and he said that they already see early design wins in a.i. infrastructure and predicts that they'll see some market share gains there. still, robins said they expect modest revenue growth in fiscal 2024, they will grow earnings at a higher rate for both the current quarter and fiscal 2024, improving margins, he says, and strong expense management are the reason for that. but he also admits that they'll continue stock buy-backs at higher levels. that often helps on the bottom line, as well, melissa >> all right, bertha, thank you. bertha coombs. >> he mentioned a.i., and the stock is down, dan what is going on >> you know, it's interesting. this stock sold off really hard, if you remember last month a couple of the disappointing results by some of their competitors here, and so, the fact that it's not up, they beat on the operating margin, the

gross margin, looked like a decent quarter, especially with low expectations and i was going to say this in the retail conversation, there's a lot of stocks that look really cheap, even if you can discount a tough slog over the next cupful ocup f couple of quarters >> cheap in a good way or a bad way? like trap? >> they could be value traps if we found ourselves in a recession. they are expected to have earnings declines, that means they are in an earnings recession, and the multiples reflect that right now i don't think there's a lot of downside risk in a name like cisco right here, unless you have a much deeper recession than a lot of folks think we're going to have. >> my question, dan, would be, i mean, tech is cyclical i think a lot of people forget that tech is cyclical, because of what happened during the pandemic during the pandemic, tech became defensive. and when you look at cisco and the other companies in the sectors out here, i mean, they still are tech if you think we're going to go

into recession, cap-x is going to decline, what does that mean -- >> that's a really great question, that's why we have smart debt guys on the desk here if you look at 2019, this company earned like $3.15. you know what that earned in 2020 $3.20. in 2021? about $3.30. so, when you think about the cyclicality of some of the businesses, here is a company that's kind of figured out how to smooth along, across geographies, across government, across enterprise, telco, that sort of thing. this is probably a bit more predictable. >> julie, value trade or trap when it comes to cisco what do you think? >> well, i think -- i agree with dan, i think this is kind of an opportunity of a business that probably powers through. i think there are lots of techs that can do this i think of tyler, which has, you know, a software business that serves government. it tends to do just fine in economic drawdowns and so, not all tech is the same and you just have to be really careful and it's helpful to have

the older businesses >> all right, here's what's coming up next on "fast money." elon's china warning why he says everyone should be concerned. and it's not just tesla caught in the middle. more on u.s./beijing tensions ahead. but first, talk about a strong foundation. home builder stocks keep climbing, as demand stays strong, despite rising rates but can the buildup continue you're watching "fast money," live from the nasdaq market site in times square. we're back right after this. - what? - especially when it comes to your finances. - are you a certified financial planner™? - i'm a cfp® professional. - cfp® professionals are committed to acting in your best interest. that's why it's gotta be a cfp®.

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welcome back to "fast money. home builders extending their

rally today. dr horton fueling gains in the s&p home builders etf. a mixed bag of data. housing starts rose 2% in april mortgage demand dropped 5% so, how can the builders keep climbing really unusual circumstance here >> it just speaks to the massive su supply/demand imbalance. we were able to recall so clearly, the great financial crisis, so, so much supply and it has been out of supply -- supply has been out of whack with demand for a long, long time now, so, that's how it can keep growing it does seem odd, even with rates going up and, you know, we're near highs, not quite at highs for mortgage rates, but still -- and the companies are not overlevered like they were, they weren't over their skis in terms of how much land they had, how many speck buildings, so, it's a different world >> sentiment is at ten-month highs, you know, the numbers

yesterday showed >> i think karen hit the nail on the head this is really about the imbalance. for all of those who think there's a slowdown that will come over the coming 6 to 12 months, you look at the home builders telling you the exact opposite we have never been in a recession when the home builders are doing what they're doing now, so, i think it's something to watch, but i do think it's a bit of a unique technical situation out there. >> it is interesting that whirlpool, so, if you build a home, you got to put, a washing machine in it and stuff like that >> sure. >> whirlpool is down from $185 a year ago, it's trading at $131, it's very near its 52-week lows. that's emblematic of the stock market we're in. everything that doesn't make sense that's positive in this scenario, there's also plenty of things that you can look at. look at masco, nowhere near its 52-week low. it be a unique dynamic

investors thinking about areas that are cheap that i can feel comfortable in, but whirlpool's cheap, but trades like that. >> i agree with dan completely i own whirlpool, it does trade like death, i do own it. i think for all the reasons you said they've done some interesting things that nobody really cares about, they've gotten rid of their european operations, their production facilities, they bought insinkeratro, but no one seems to care. coming up, a winning trade why the analysts say the best is yet to come for this casino operator. and elon musk weighing in on u.s./china relations in david faber's exclusive interview last night. why he says everyone should be concerned right now. tus.n asmoy" whe"ft ne rern

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welcome back to "fast money. stocks rallying as debt ceiling negotiations seem to be trending in the right direction shares of wynn resorts popping more than 5% after an upgrade to overweighed barclays analysts saying the best is yet to come. macao fundamentals are keeping them bullish airlines riding the bullish wave, as stocks all soaring

today. united, american, delta, others with solid gains and this goes, dan, to your point of, for every one thing that seems to be positive, there are all sorts of negatives so, we pointed to two positive things, outlines and casinos do you have the negative to counter, you know, what can be made for a case for the consumer still spending on travel, et cetera >> i think terry made a great point. we're going to start seeing -- well, we have been seeing services, but we're going to see that slow down, we're going to see really difficult comparisons to 2022 and some of those things, but wynn is a good example. again, a large part of this move since, i guess, the fall, is predicated on china at some point would reopen, we know, like how they're dependence on macao here to me, i don't know. the china thing, i don't know how it's going it doesn't seem like it's that great. i don't know if i want to own a name like this just for macao, especially when we see how the chinese reacted to covid and how they might react to some sort of

dustup with taiwan, i mean, this would be -- this would be ground zero in your portfolio for any sort of, you know, invasion or anything that, you know, china and taiwan, so, it's not for me. new concerns rising about the rising tensions between china and taiwan and tchina and the u.s. elon musk says it needs to be taken more seriously >> the official policy of china is that taiwan should be integrated one does not need to read between the lines, one can certainly read the lines >> do you think -- >> so, i think there's some inavoidability to this situation. >> that would not be good for tesla, conceivably, or for any company in the world, frankly -- >> yes for any company in the world i think most -- almost no one realizes that the chinese economy and the rest of the

global economy are like conjoined twins. it would be like trying to separate conjoined twins that's the severity of the situation. it's actually worse for -- for a lot of other companies than it is for tesla, i mean, i'm not sure where you're going to get an iphone, for example >> here now to way in, the senior poll icy at longview. great to have you with us. do you agree with musk's take? >> thanks for having me, melissa. listen, there were a set of built in assumptions about the outcome of taiwan's future that i do not necessarily share he is correct that it's china's policy, and intent to integrate taiwan into the people's republic of china, their capabilities, melissa, are growing to do that their national level of confidence is growing about their ability to do that, but china's not the only actor here. there are other actors who have a say, the u.s., taiwan,

specifically, partners and allies, but also, melissa, global corporations have a say here and i think it is time for people to speak more clearly, like elon, about the potential outcomes and make it clear that they're uncomfortable and start to vote with your feet and by that, i mean, derisk your supply chain, try and decrease your dependence on china, and make it clear that the heightened geo-political tensions and specifically the threat to taiwan is a concern. so, i don't think that this is imminent, but i do think it is fair that companies should heed what he says it is their intent, but it doesn't mean it's going to happen and certainly doesn't mean that it's going to happen in the near term >> it sounds like you're saying to companies that they should pretend that it is going to happen, that, in fact, it is, and you should pull out of c china. if it is china's intent to integrate, and it is the u.s.'s policy to recognize taiwan, then

it is an inevitability that there will be conflict there would you agree with that? >> well, i want to make clear that u.s. policy is not to recognize taiwan as an independent and sovereign state, so that is clear with respect to china, it is indeed their policy to integrate taiwan, and so, yes, i think companies should take china seriously, and by that, i mean, you know, don't naval gaze and whistle past the graveyard here. there is a possibility -- and it may not be an invasion, melissa. we talked on the shore here about several different possibilities to bring taiwan to heel so, it may not be an invasion. so, i think businesses do need to start to take this serious. have a plan, and, you know, if i'm a board of some of these companies with exposure or an investor, i'm going to start to really press for what this plan is to derisk your supply chain and so, i think if nothing else, the interview should really fire that shot over the bow that you

should take this seriously to my point, it's not imminent, but you should use this time between now and when a scenario may be one that china could execute, to plan and get prepared for this, so, i wouldn't sit back and wait i would plan now >> what do you think of the precedent that was set by a lot of u.s. multinationals when russia invaded ukraine say it was an invasion, some sort of economic blockade or something, there would be a lot of pressure on u.s. multinationals, and it's not just, you know, the sales, but it's also the production, as you mentioned, the supply chain. our companies, to what elon said, we're kind of cojoined right here, and it's not an easy fix to kind of, you know, sever these ties, whether it be from a selling standpoint or manufacturing standpoint >> yeah, i think you're absolutely right, and he is, as well, about the conjoined nature of the global economy to china but look, i think ukraine gave us an example of all of the possibilities, both on the hard side, as well as on the economic

sanctions, export control side and so, i think if i'm going to start to plan for a potential outcome, i really take the ukraine /russia example as my base case, but as you know, dan, this is -- this is nothing compared to that, if china were to invade taiwan or there was to be some sort of an economic sanctions against china, so -- it's a complex scenario, for sure, but businesses need to start now, because i don't think it's imminent. i think there are too many problems at home in china that they have to deal with in the near term, nor do i think their capabilities are such that they are assured to win an invasion scenario, but to me, it means, use this time to figure out how you untie this knot. that's my view of the situation. >> always great to get your views. thank you. >> thank you, melissa. >> karen, what is your take? because if companies have to start thinking about this and

investors have to think about, and we've talked about this many times, about what to reward companies that are, in fact, already in the process of derisking and what to discount companies that are in there and not dealing with issues yet. >> right i think of like a nike that has actually changed the mix of where they produce their goods and i think japan -- china's the third -- third now, vietnam, we all know india i think, you know, apple -- i can't think of some company that is more in the cross hairs, both from, you know, consumers there and as production there -- i don't -- that should be -- i don't know how much of a discount, but probably there should be a bigger discount on -- who knows when, if this is going to happen, but it's c cataclysmic if it does >> there are two ways to look at this from a cyclical perspective, it never makes sense to invest based on politics.

if you didn't invest in u.s. equity market because you were worried about president trump taking down, you know, the u.s. economy, you missed out a great bull run if you didn't invest in energy when president biden came to office, you missed out on one of the greatest runs in the energy sector and so, when we look out across the global landscape and we think about this, i think a lot of the uncertainty that exists on a cyclical basis, near-term basis, is going to already be priced into stocks on a secular basis, though, i think it means deglobalization likely continues along that path, which means you have higher inflation and likely higher rates over the long-term. >> yeah, which brings you, julie, to your onshoring trade, which you've always liked. >> yeah, i think you continue to see more of that, and look, i mean, we already had a dress rehearsal for this in covid, right? where we had may injury delayed supply chains and i think everyone woke up to that and now we have this conflict, you know, we had a military strategist in our office who said something akin to, you know, an invasion

in taiwan is inevitable, but the u.s. can delay it indefinitely, which sort of felt like a taylor swift lyric written by chatgpt to me, but i think, you know, i do think that it's something that everyone has to kind of keep front of mind, a little bit almost like this debt ceiling, where you want the -- you want the results to be clearer. coming up, a healthy stock surge. shares of baush jumping after a drug patent ruling and the move has options traders piling in. w eypling the name next "fast money" is back in two. as sleek as it is... spacious. as smart... as it is beautiful. introducing the lucid air. experience the best. ♪

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welcome back to "fast money. bausch health soaring after a delaware district court ruled in favor in protecting its patent in a popular ibs drug. kevin kelly's got the action kevin? >> hi, melissa today there was a lot of activity, given the ruling we started out the day with 2.3 times the amount of puts it started coming down after the ruling and that's because you saw a really big block of calls looked to appear to be sold, about 10,000 of them, all the way out in july, the $8 calls, catching the upside and they were sold towards the

ask for about 77 cents, so looks like someone was selling calls against the shares they own. >> all right, kevin, thank you kevin kelly. kelly intelligence karen, you flagged this move >> yeah, so, there were two catalysts for this stock one of them is this, the very important drug, irritable bowel and some other things. this is a big drug, a protection due in 2029. the other, the most crucial part is, can they spin bausch and lomb they are desperately trying to do it. >> for more options action, be sure to tune into the full show, friday, 5:30 eastern time. coming up, more musk the ceo is known for saying what is on his mind, even if it comes at a cost. stick around more "fast money" in two n diffes i should be trading.

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well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. welcome back we talked about elon musk's fears to china he told our david faber he will keep expressing his opinions on twitter and say what's on his mind, even if it comes at a cost >> there's a scene in "the

princess bride," great movie >> great movie >> where he confronts the person who killed his father and he say s, offer me money. offer me power i don't care >> so, you just don't care you want to share what you have to say -- >> i'll sail what i want to say and if the consequence of that is losing money, so be it. >> investors didn't seem too rattled by those comments, excited about a lower cost tesla coming to market in the next year or so tesla closing up more than 4% today, but while musk is willing to take hit, if you are a sh shareholder, shouldn't you care what elon musk is going to say, if that's going to alienate

customers? dan? >> let's hope he doesn't quit his day jobs, okay, because, you know, we saw him on "saturday night live," we saw his reading right there, he's doing a great job in the other places. that's one of the big concerns if you are a tesla shareholder, you don't want the extracurriculars that have the ability to distract. he's had issues with the s.e.c to me, i was really surprised. to each his own. if he was just the ceo of privately held twitter, you can do whatever you want, but he does have a responsibility and he does have actually some restrictions about what he tweets about relating to the company given the s.e.c. agreement that he has. >> right but he can tweet about -- that still leaves a whole vast amount of stuff that he can tweet about that could still alienate people out there, potential customers, investors. >> yes, it seems some what irresponsible. i wouldn't be happy. but if you are a tesla shareholder and you haven't been awake and you haven't seen his s.e.c. violations, his

ridiculous tweets before he was involved with twitter, remember the bankrupt sign, the lbo, funding secured, the -- not filing a 13-d, i mean -- you can't be surprised and expect for him to behave better >> and maybe this is part of the lure of elon musk, right, julie? you like this guy because he speaks his mind and he's a genius >> i mean, maybe, sure i think the thing -- i don't know, i mean, i think the real struggle with this is still what i kind of come to is, there is a lot of debt outstanding at twitter and for him to pay for it, it's not going to happen from twitter's economics, which he's done a great job destroying it's going to come from his selling shares he said, i'm not selling anymore stock, and then he does. so, it's a concern for shareholders up next, final trades.

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♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ time for the final trade julie? >> you know, tjmaxx is a business that's got great traffic and that is good >> michael >> european equities, the u.s. tech sector is going to fall in the back half and long-term treasuries as growth declines. >> karen >> yeah. find myself agreeing with dan -- >> what? >> yes, i know whirlpool. too cheap here >> i thought you meant on the tesla -- >> we could go on and on

>> all right mine is snap i think it's still a net gap from earnings. >> all ight, thus for watching "fast money. we'll see you back here tomorrow at 5:00. michael, great to have you here with us. "mad 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 make friends. i'm just trying to make you a little money my job is not just to entertain, but the days like today into context. call me at 1-800-743-cnbc or tweet me @jimcramer. everybody thought they could get out of the market and jump right back in at the per