to have this week's debate who is in the right with the hollywood strikes, creators or executives bob iger says that they're being unreasonable but fran drescher begs to differ >> all right i can't wait to see that debate tomorrow morning the dow finishing the day higher everything else lower today. >> do that will do it for "overtime. >> "fast money" begins right now. right now on "fast," from hot to not semis slumping, housing humbled, and two of this year's it stock, tesla and netflix coming back to earth after earnings is this the beginning of a real reversal we'll debate plus, winning time the dow now riding a nine-day winning streak and the transports struck an ire as well we'll chart the next news for the averages coming up and later, the barbie effect could the movie give mattel a lasting bottom line boost? we'll go inside the numbers. i'm courtney reagan in this evening for melissa lee. this is "fast money."

we have karen finerman, guy adami and carter worth of worth charting we talk about the ai tried shares of taiwan semi falling more than 5% today the world's largest chip maker reporting its first profit drop in four years. swan semi putting pressure on, the index dropping 2%. kristina partsinevelos is here with the semis slump >> let's talk what the message is the ai hype can only go so far that's exactly what management paraphrasing said really early tonight because ai only contributes 6% of total tsmc revenue. yes, that 6% should grow to double-digits in five years, but it's is not growing fast enough to offsee the weakness we're seeing in smart phones as well as pcs, which is a much bigger percentage of industry revenue they fell 5% but brought down the sector like the smh, a good

barometer. other equipment names you're seeing on the screen got hit hard because tsmc reiterated its capital expenditure spend at the low end of the range tsmc also plans to low down production of its arizona hub due to lack of skilled workers here in the u.s., highlighting another issue for equipment makers so now the time to buy the dip, especially when demand for electronics continues to be weak in the second half of this year, according to tsmc? morgan stanley, mizuho both say buy since tsmc's long-term growth remains unchanged jp morganthinks gains over the next few years ak long-term hold. bottom line, artificial intelligence commute demand exceeds supply we've seen that with nvidia's conversations, but the pc smartphone business continues to remain depressed, especially in the near term. court? >> kristina, this so much. dan, you've been talking about the high premium for all things ai for some time

what did you make today of some of the comments and the small percentage telephone business that exists right now? >> that's really the story i think karen has been really articulate about this the last couple of months this is going to be a secular trend that is going to play out for a very long time in the market cycle we're in right now, it's drawn a lot of enthusiasm it's pushed valuations in this space to a place that you're not usually that familiar with when it comes to a chip company hearing this from a company like that i think is really important. 6% of their sales. and you think about who are some of their biggest customers apple is a 23% customer. nvidia 6%. qualcomm, amd high single digits these are things that should seep in through the industry a little bit because i think we have gotten a little excited guy will tell you on the amd, i'm going to kick it over to you, what's happened in that stock in the last three months since they last reported so to me, this is a lot of what we're going to hear during earnings season, a lot of stocks run it valuations have gotten a little

extended what is going on in china is not supportive, specifically in this space for the valuations and the price appreciation we've seen. >> from a ceo, i'm going to read for a second this is of taiwan semi "while we have seen, observed an increase in ai-related demand, it's not enough to offset the overall cyclicality of our business." that's taiwan semi we said this i believe it i think it's one of the fife most important companies in the world. market capital backs that up to a point. when they make comments like that, and karen can speak to this, we're not discounting the fact that ai is here to stay with tremendous secular headwinds. i think what we've been trying to say is the valuations have gotten themselves off kilter so nvidia traded off today i'm surprised it didn't trade off more but i think they're telling you it's going to happen, but the hype has just gotten way ahead of itself right now. >> so karen, that's a good point. is this not a trade? is this a long-term hold as some of these analysts were kind of looking at here today? >> for me it is. yeah, i'm not going to trade

around it. i do believe in the ai being transformative and nvidia being right in the heart of it i don't think it's going trade at fair value all along. i wouldn't be surprised to see m more weakness continue if anything, i think there is more demand for ai everywhere wants to have an ai presence in some way and i think there is going to be more and in for nvidia and whoever else may come along the compete. but right now it's just them staying with the trade, i absolutely could see it trading down further that wouldn't surprised me at all. we have august 23rd i think is when the they next report. and even though it's a little over a month away in this world, that's a long, long time, right? a lot of things can happen but i don't think anything is going to happen enough to make me say i don't want to be in the ai trade anymore so i'm just going to stick with the volatility i wouldn't be surprised given the run the whole space has had. this is just a small pullback.

if you pull back from where the charts have been, there is still a lot of downtime. i'm hanging in for the long-term. >> um 53% today. even if it was down today it probably doesn't break out of the trend. >> it's a small theme in a very steep uncorrected move the question is, is this finished typically one day doesn't solve. so we know sequencing is important. independent of what one's long-term view is, if you're ever steep uncorrected, just as if you're plunging, you get counter trend moves. look at the banks that were plunging what are they doing now? they're recovering if you get too steep, you get a pullback pullbacks are not likely to stop after one day. since june 1, the russell 3,000 has almost tripled in performance in stocks. the russell 2,000, excuse me, the small stocks a question of big names that are struggling >> you mentioned apple being an important question to tsmc what's the read there? how should we think through that >> hates nothing to do with a lot of the ai stuff is really

about smart phones and about chinese demand i'll just say this about nvidia. since it last reported, it's gained more than $400 billion the market cap on a four billion revenue beating the quarter. this is the poster child you can time stamp it right here for this bubble we're in it is a bubble i'm not tell you the tech won't materialize and transform a lot of businesses and we won't see higher rates of productivity but the near term, think about this think about how much demand there is for these chips to go into these products, these massive big platform companies need to be competing we heard from apple. it was boomberg story earlier in the week that they're rushing to catch up to put something out to compete with microsoft and google i don't have you the chinese who can't buy the chips who are buying them at exorbitant prices in the gray market there is a bubble right now in demand for these things. there is really no commercialization for these things now when you finally do see top line revenues coming in for these products that are using these chips, the cost to compute the cost of the chips, the margins

might not be great on that sort of thing this may be the thing that takes the whole nasdaq down at some point in the next year or so if you want the buy these things, you tell me how much of that tesla move over the last month and a half, hundreds of billions of dollars were associated with this ai picks economy dust i think a lot of it too. i think there is a lot of stocks that are massively inflated right now, and we're not going to see the benefit i think it's going to be benefit over years it's not going to be benefit in quarters, in the next couple of quarters or so >> and obviously the nasdaq well underperforming today compared to the other indices dr horton reversing. starting higher, before then dropping into the red. and the reviersal hitting the broader home base as well. the moves come as june home sales dropped to their slowest pace in 14 years as the housing market still struggles with short supply guy, you flagged this reversal interesting moves. dr horton, pulte hitting all-time highs before selling off. is this more about valuations

than fundamentals? >> i don't necessarily think it's a valuation thing carter can speak to the reversals, what they mean for technicians and chartists. pretty significant reversal. when pulte homes reverses down four bucks, dr horton on decent amount of volume, two, three times normal volume, that's what we've been waiting for i'm wrong all the time about a lot of different things. but one we've collectively gotten right and s this home builder move, and it's extraordinary. you've been waiting for something like this. because when it turns, the turn is going to be precipitous and fast now, i dent want to make too much out of one day, but if you've been waiting for that type of move, today has it in spades, courtney. >> what do you do with this kind of move, karen >> well, so i own something like whirlpool which is down 4 or $5 today. nothing really changing in the space. to me the multiple is very low clearly it's has a nice run. but i still think that there is more to the story.

so it's going to be a little bit bumpy. i'm going to stay with it. i tend not to trade around too much because i'll never be able to get out at the right time, get back in at the right time. hopefully have gains and be able to make enough spread to pay taxes. so i get why it's cooled but still, the fundamental supply demand dynamic being very out of whack, we dent have enough houses is still there the fundamental story i think is still there. >> what are the charts telling you, carter? >> again, if you consider whirlpool, this is a bombed out name that is bottoming in relative strength to the market where home builds are steep uncorrected. consider this. the all-time highs the home builders subindustry group, but from their peak, the housing bubble peak from what we retreated to the financial crisis low, they're almost half the performance of the s&p the problem with buying one-year extended is you often don't ever recoup those relative losses when we started this conversation is still below its

dot com peak on a live basis. >> for more on housing and ai trade troubles, let's bring in our next guest a cnbc contributor. peter, thanks to so much for joining us you've probably been listening to some of this conversation what do you make of what you heard from tsmc in terms of what's going on in chip space, the broader and hype about ai. it's a small part of the business, albeit there is a lot of room for growth down the pike. >> it's one thing to have the hype of ai and excitement of it in q2. it would make people forget about what was going on in q1, and that's what was a slowdown in chip sales to pcs and smart phones and even if you look at the big cap companies, they all grew single digits. the ai craze, the hope that the fed is done raising interest rates sort of whitewashed q1 and allowed these hopes and dreams to develop in q2 and earnings now is sort of a reality/gut

check for what's going on the ground most semis going into pcs and smartphones, and those end markets are still contracting. ai is very exciting. nvidia is obviously a huge beneficiary of that, but there is a huge chunk of the semi business that is not selling into ai. with respect dh horton, one of the old rule of thumb when it comes to home builders, you buy on one times book or less and sell at two times. dh horton is trading at two times book you have to wonder how sustainable is the housing strength when mortgage rates are at 7%. it's been good so far, but i think investors are just wondering for how much longer. >> yeah, and to that point, i understand when you're looking at the housing market, you just look at it and think it's a little bizarre, the fundamentals we have going on right now. >> for sure. when you have existing home sales that outside of covid are near the lowest level since 2011 so it's a rather bizarre housing

market but affordability is still the overriding issue, both in terms of the price of a home rising 40% over the past several years and a doubling of mortgage now home builders have been able the take advantage by buying down mortgage rates, but creating teaser rates. but, again, the housing market needs that first-time buyer. and that first-time buyer right now is very strained from an affordability standpoint raising those sustainability questions with new builds. >> it's karen. let me ask something how do we see an equilibrium i understand obviously prices of homes are higher, and there is this odd existing home versus new homes. but it's been a while now that rates have been higher for mortgages. how do you think this stabilizes or plays out >> i think you need a decline in mortgage rates, or you need a decline in home prices you need one or the other to make home buying more affordable within the existing home sell

number, first-time buyers made up 27% of purchases. the record low is 26 unless you get that first-time buyer, you sort of clog up the housing industry and i think you need to see some alleviation on the affordability side, whether on the rate side or the price side. and right now we're not seeing really any give on either. >> hey, pete we're probably what, 20% through s&p 500 earnings right here? we saw some big reactions today. both up and down and i'm just curious to get a sense of what you thought of the move in tsm and netflix and netflix that ran into their quarters but there is a johnson & johnson on the other side that was weak after that had a great day i'm curious. early readings as far as what you're thinking as far as earnings season and how it's shaping up >> i think positioning is huge here and we know we've created a very high bar for a lot of companies to leap over when it comes to earnings but i think, again, we're getting a reminder that overall,

it's still a challenging macroeconomic environment. and that's not coming from me. it's coming from the companies i heard that throughout q1 earnings calls i'm hearing at in q2 earnings calls. and when you a run in the stock market that is solely based on mu multis, you need to substantiate the p part we're not seeing that yet as earnings continue to decelerate. coming out of the first quarter, earnings estimates in the s&p were closer to 220 now they're under 217. interest rates remaining very sticky at high levels, and you have obviously a move higher in the multiple so i think the challenge is here for the next couple of weeks as we digest more earnings, it's going to be tough to exceed these expectations look at taiwan semi opened up down 5%. and apple, one of their biggest customers opened up in the morning. obviously closed down, but i think there is some issues that need to be reconciled let's say

over the next couple of weeks when we get earnings because, again, that's the reality check for the market that has been somewhat forgotten over the past three months since q1 earnings were reported. >> peter boockvar, thank you so much for joining us. let's trade this guy i want to go to you and what we learned today from tsmc, maybe from what we learned in netflix. what can we apply to big chip semiconductor names when we're looking at alphabet, microsoft, intel. >> in terms of taiwan semi specifically, they told us, which we should have known, they're still highly cyclical businesses and there are uptrends and down trends and they're suggesting things have been slowing down on some of their core businesses, which i think we all knew. and the ai phenomenon is not enough to offset the slowdown we've seen ai notwithstanding, that shouldn't affect names like amd, qualcomm valuations do matter apple at this point trading

probably north of 30 tiles next year's numbers with mid single digit revenue growth, i don't know that sounds a tad expensive in this environment, especially when you have a china slowdown as precipitous as it is. >> we've got a news alert we want to get to quickly on digital world acquisition corpse let's get to eamon javers. he has the details what do you know >> courtney, that's right. the s.e.c. is announcing a settlement of fraud charges against that entity. the entity digital world acquisition corporation. that was involved in a donald trump-linked transaction it was proposing to purchase an entity called trump media and technology group corp. which in turn owns donald trump's media organization truth social, his social media platform that he uses today now that the s.e.c. is saying that that entity digit tall world has grid to pay a potential 18 million penalty

here for misrepresenting itself to investors they're saying that these charges are now settled, and that penalty will be paid in the event that that spac goes through with the transaction in the future >> got it. thank you so much, eamon javers from washington, d.c is the pharma stock the right prescription for your portfolio? we'll debate it next and tesla tanked nearly 10%, making it the biggest drag on the nasdaq 100 is the electric run finally copping to an end? more on the ev stock don't go anywhere. "fast money" is back in two.

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welcome back to "fast money. johnson & johnson topping the tapes, jumping over 6% over better than expected earnings and a hike to the full-year forecast men tech business boosting as the need for nonurgent surgeries rebounded during the quarter karen, what do you make of this one? i guess it's a good thing people are getting back in to getting the health care they need. >> a lot to like a big day theother day because they said their medical loss ratio was down there wasn't as much spending. all right.

good for them. they also have the kenvu swap coming up. people are excited than. i don't know what to make of the story here, how much to penalize it or if it's already baked in i'm not sure i dent own it. it's been a good run, but not for me. >> a lot of settlements or litigation still in process. what do you see in the charts for j&j? >> one of the things we know is when you have a mature growth company, you don't generate a lot of -- this is one of the highfliers, greatest commercial enterprises, brand names in america. it's been underperforming the sector forget about the market, its peers since '08. it's just been a dud on the screen, this is a relative performance chart of j&j two its peers, lilly, merck, pfizer it's straight down today doesn't change much. i have a day the day chart that looks like a ekg chart last time i went to the doctor.

up, down, up, down it's nothing. >> that's really interesting what about the kenvue spin out johnson & johnson still owns 90% of it. how should we be evaluating that going forward, karen >> i think it's a chance to basically do a buyback, which i think would be good for them i don't know that that changes the overall story that much. >> okay. all right. now to a major buzz kill, check out shares of discover financial nose-diving after missing second quarter estimates on the top and bottom line biggest single day drop in more than three years disclosed it's undergoing a federal probe of the misclassification of certain car products guy, this jumped out at you this is a big fall for this name, about 16%. is this an accounting issue? a fundamental problem? what is going on >> accounting issues, it's sell first, ask questions later so that's clearly a big part of this but the other part is you hear

capital one a few months ago talk about reserves for credit qualities. this enyou start to sort of connect the dots and say discover financials sort of on the precipice of that as well. a lot of this move is predicated on the accounting. but there are other things at work here. i look at, this and i say you know what? was what does it men for american express that we're going the hear from? and obviously that a completely different customer but as credit becomes the concern, it manifested in moves like this. this is not a small company that is a $25 billion company so when you see a move like that of that magnitude, i think it's got to give you pause at least for what's going on potentially for the consumer and the credit markets. >> what would you do, though, if you were a holder of discover on this move? is it going to fall further? you hang on to it? >> one of the great early "fast money" participants jeff macke asked a similar question what position would you have and he said the fetal position one of the great lines in the history. and so to a certain extent, that's what you're looking at right here this stock probably still has significant room to the

downside so to answer your question, i'd be selling the stock still despite the move. >> okay. after the break, what charges up must come down. tesla's big run hitting a wall as investors mull over those results. details tonight slimming margins the cybertruck concerns, all that has traders grabbing for their seat belts today plus, we're watching some transport stocks after howards cxs and we're life from the market site in times square. we're back right after this. i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. [coughs] good to go. yeah, i think i'll get a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. no. i'm going to get a second opinion. with innovation refunds, there's no upfront cost to find out. so why not check like i did for my small business?

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back of last night's earnings. ceo elon musk raising some eyebrows by saying deflation, not inflation is now front and center, adding it could be a big headwind for markets like china where demand can be hugely influenced by a stronger dollar. you keep talking about the margins here and what did you make of some of elon's comments on the call? >> i think he sounded crazy. we were sitting here and wondering why the stock was unchanged. it didn't sound like a particularly good quarter when you look at the operating margin nearing 10%. that gross margin which keeps going lower. the fundamentals of this company are not improving. and then you have the ceo comes on he didn't make a heck of a lot of sense go listen to it. he is saying things like the value of the company could be up ten times what it is right now let's be clear it was just south of a trillion dollars the other day, okay. so what's your time horizon for that it didn't seem compelling to me. and if you look at the way the

stock started to trade once he started speaking on their call, it didn't see an uptick all day long, okay so closing down 10%. i suspect it guess lower but again, the stock rallied 100%, 100% from the lows after its call three months ago. so i have no idea what it could do but him sounding off like this at a time after the stock has rallied like this is very curious. it used to be, remember a few years ago he would often come out and say i think the stock is overvalued here. i think it sounded weird to me. >> some people will look at tesla and say this looks like an until 2008 and 2009. what do you think? >> i don't remember what was happening with apple in 2008 and 2009 everything seemed to be working. which was ai, tesla, netflix, faang today was not working. and i wouldn't be surprised if that is as you said more than a one-day phenomenon that we see a rotation into something else >> carter, can you make sense if tesla moves in charts? it's seemingly all over the

place. >> but so many stocks are. what about meta? 315. >> good point. >> or g.e. tripling off its low. what we do know, and it speaks to what you heard, a first drop in gap in very heavy volume, it's tempting to say hey, i missed this. i shouldn't buy some tesla it's hugely wrong. and some people believe in a three-day rule forget all that let the dust settle. >> the deflation comments for sure tesla accounted for nearly 10% of all options trading today let's bring in mike khouw because he is going to break down the huge day of action. what happened here, mike >> tesla is usually the busiest single stock option, but nearly doubled its volume today that meant that it represents a close to 10% of all options volume, more than 15% involve single stock options volume. calls did outpace puts by nearly 2-1. but i would describe the sentiment overall as fairly mixed. now if we exclude options that expire tomorrow, the next busiest contract with the september 400 calls, 85,000 of

those were trading just under a buck and a quarter contract. and my guess would be that this is just market participants who have a fear of missing out in the event that it does somehow miraculously rebound to the lat 2021 highs. >> thank you, mike for more "options action," tune in for the full show tomorrow at 5:30 p.m. eastern time coming up, csx and knight-swift on the move we'll dive in next plus, should you bank on the financials the regionals outperforming the bauder market over the past month as earnings roll in. is this a spot to park your money? we'll debate it, when "fast money" returns get your trades to go with the "fast money" podcast follow today on your favorite podcasting app we're back right after this. good luck.

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welcome back to "fast money. stocks closing out the nasdaq dropping more than 2% the s&p down more than what half percent. but the dow climbing more than 160 points for the first nine-day rally since 2017.

and we've got an earnings alert on csx and knight-swift are both burning rubber after reporting reports. >> that's one way to put it. let's start with csx, down about 5% after hours reporting earnings exactly in line with estimates at 49 cents a share. revenue missing slightly at $3.7 billion. some other troubling bits from this report, though, csx saying intermodal volumes were down 10% while prices were down 9%. csx ceo saying in a statement along with earnings that despite those headwinds, the company looks forward to, quote, meeting opportunities ahead in the second half of the year. now over to the trucking giant knight-swift those shares also down about 3% after hours after missing on the top and bottom lines revenue coming in at $1.55 billion versus the $1.6 billion expected earnings share were 5% short knight-swift blaming soft demand and an uptick in driver turnover

for the misses the company also cutting its full year guidance to a range between $2.10 and $2.30. that's down from its previous full-year guidance of $3.55 at the high end of the company's estimated range, court circumstances thank you very much, steve for a look at those two transports before these results, the transports had been trumping the s&p over the last couple of months carter what do the charts tell you about the road ahead pour the sector you found some interesting nuggets here >> this might be fun take a look. we've got some comparative charts these are time frames that might or might not be interesting. i think they are the first one, two lines, this is from the covid low. who won? transports look at the next one this is the absolute low of '09. transports or s & p? transports this is from the peak of the.com, march of 2000 who is ahead the blue line. transports

the beginning of world war two, 1940 who is ahead the transports there is this thought that this is a cyclical area of the markets and it cannot keep up with great growth names that dominate the s&p but going back a very long time, transports have outperformed but here and now chart, we know this transports peaked before the market, right. so the market peaked on the 2nd of january 2022. transports peaked two months prior. and when did the market bottom it bottomed in october of last year, and the transports bottomed in september. they're leading. right now i don't think they have a lot of upside. >> guy, you were nodding your head. >> the make up, union pacific,ups and uber you know pacific is three times the size of serious. so it stands to reenrionegro the csx's woes will be union pacific. they can lead on the way up. they can also lead on the way

down they missed on volumes and pricing, which is not particularly bullish so i think it speaks again the slowing economy. you start to connect all these dots iyt, which has been the lead attorney way up could start to be the leader on the way down. >> from the rails to regionals and the big banks too. let's check out this chart of the kre, rallying more than 8% big moves in zion, western alliance and goldman and more. you mentioned banks are starting to catch a bit do you think that this move can last is this a relief rally after what we heard from march what's going on. >> something we've been talking about for a while. what we said in the absence of bad news, which we have gotten none since -- well, march, april, these banks, regional banks will sort of levitate higher just as people look for valuation in things that seem to be interesting on a value basis. that's exactly what's happened but we had sheila bair on the show two nights ago, and she thought, and i happen to agree with her that there are more shoes to drop. so the question is how long can

you stay with this trade until the headlines get in your way? i don't know the answer to that. it's been a pretty decent run. valuations are still compelling. i just think there is a tape bomb coming at some point, ooh, a tape bomb. >> i don't own the region analysis jp morgan is my biggest bank position by a lot. that's had a very nice run really, really good earnings bank of america was fine the earnings were fine, but this has more to run i think because it's underperformed by a fair amount so i'm hanging on the that as well i just think -- i don't know if there is another shoe to drop or not. but i still would rather be in the relative safety of the big banks is so vastly different to me it creates a different risk-reward. that's where i want to be. circumstances there value in some of the regional names that have fallen pretty far as you see deposit normalizing? >> probably. what we learned in march is the fdic got their back. one of the things i'll just say, karen made a really good point she has been steadfast on these large money centers, and they have been a great place to be.

you look at wells fargo getting back up towards its 52-week highs. jp morgan is making consistent new 52-week highs. bank of america has been a big laggard, but it's had a big run here to be frank, i had a small put position into earnings season in just the banks and the xl, thinking if there were any hiccups there, there would be a space that people are probably keeping on a very short leaf but the fact that they were good results and they kept on going, it's kind of good to see that if you're in this broadening out camp but i think to guy's point, it's also value right now where it's probably hard to find good value in other areas and that might be one of the things why people are picking at energy here too after a difficult first six months of the year >> well, coming up, netflix with its worst day since december, but the stock still up 100% since last jy.ul carter worth set to give us his review of the charts, when "fast money" returns

welcome back to "fast money. netflix under pressure on the back of its q2 reports shares dropping over 8% today as wall street looks for clarity on how the streaming giant plans to turn new subscriber ads into revenue growth the stock seeing its worst day since september, but shares still up 50% this year is there room for netflix to

run? let's ask carter worth >> back again we're talking about the same principle over and over if something is trading and then it has a shocking move, news-related, up or down, the specials on the floor couldn't get it open. 9:38, 9:41, and it would gap or down the biggest gaps are fda approval you have epic moves. this dropping app no different than that and tesla. they're very rarely confined to one day. let's look at the charts and see where it might go. the first here is with the 150-day moving average that's annotated 360 the trend line in effect since the low is the same exact level. that's quite a bit ways down from here. final chart. my hunch is we get to the mid point of this very well defined channel that you see here. so that's another up to 7 to 9% from here. >> there is a lot of news going around with netflix of course with the earnings but also with the strikes that are going on in

hollywood. how do you put it all together when you look at netflix as a trade opportunity? >> we were talking about last night as the news was coming out, the narrative had been that these guys are going to be able to weather the storm, better than let's say some of their other competitors and the like here i think the north american saturation thing, it goes around every couple of years. and then they actually defy it a little bit i think to cara's point, if you're thinking about this as an investment and karen bought this last year when it was down 70%, valuation was really good, it's less so now. and now the headwinds are a bit more challenging the uncertainty about a strike and how long that's going to last and what's the content they're going to have to hold up to me, i think it makes sense. as a trader, let it come back to that moving average. let it come back to that uptrend. because we're seeing this again and again now. how many stocks just went parabolic in the last couple of months getting divorced from the fundamentals of the company? if that stock was trading at that moving average, still up on the year, let's say 25, 30% of

the year and put the quarter up, it probably wouldn't have soild s sold off. >> i don't even know which plan i'm on i should probably look it up and see how many people are using it i guess they can't as much anymore. coming up, it is a barbie world starting tomorrow for mattel the stock is already up 17% this month in anticipation, will it continue to translate into lots of green "fast money" is back in two. hi, i'm john and i'm from dallas, texas. my wife's name is joy. we've been married 45 years. i'm taking a two-year business course. i've been studying a lot. i've been producing and directing for over 50 years. it's a very detailed thing and the pressure's all on me. i noticed i really wasn't quite as sharp as i was. my boss told me about prevagen and i started taking it. i feel sharper. my memory's a lot better. it just works. prevagen. at stores everywhere without a prescription.

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welcome back here is a unique peek at the cramer cam jim was talking with the kre of sap. catch that at the top of the hour lights, camera, barbie estimated the bring in $140 million this weekend that number keeps going higher while the movie has everyone going pink, will it be enough for mattel as it tries to build out of the beginning of a toy movie universe let's bring in andrew to discuss. thank you so much for being here whatever happens at the box office is not necessarily material for mattel as the ticket sales dollars, but it's about this barbie halo

i think it's probably a little bit about trying to reinvigorate older women remembering the days they used to play with barbie so perhaps they'll buy them for their children >> that's great way to think about it thanks for having me you're right the actual revenue from the movie will be largely very little they get a very small licensing fee. after the movie makes a profit so really the opportunity here for mattel is threefold. that branding, building that strong brand, reinvigorating it with the audience, reminding the audience of the greatness of barbie and you see that through all the licensing products we found somewhere around 100 products that are being licensed from barbie this year. toy sales is another one and then the last one is if this movie is very successful, mattel is sitting on a large cat look of ip that they could all bring back to the movie and kind of replay what they're doing here >> so i want to kind of break it

down you talked about -- i did a story on this myself and mattel does have over 100 brand partnerships for products. and they get a licensing fee from them. a flat fee and some percentage of sales it depends on how the deals are structured is there any way to value that opportunity for mattel >> a very loose rule has been in the licensing world. when you license ip for a movie, the license products typically do between 1 and 2 x the box office if the movie does $600 million, that means the licensed products would do somewhere between 600 and 1.2 million. simple math. and they would get between 5 and 15% depending on the product and the structure. as you start to do your math, maybe it could be a $50 million opportunity. maybe a $200 million opportunity. it doesn't sound like a big dollar value, but licensing revenue is very high margin and goes straight to the bottom line >> and of course, all of this to

your point, kind of lays a blueprint potentially for mattel to look at the rest of its intellectual property and see what they can do with it how do you value that? and what would be the difference because when i'm looking at something like barbie, yes, anyone can play with barbie of any age and any gender however, it does tend to skew toward younger females and i don't know that the other intellectual property really hits that same demographic does it? >> i would tend to agree i think it goes by ip by ip basis. >> okay. >> the next movie is probably going to be hot wheels-related very different demographic, build brand, maybe not as big a license opportunity. but hot was at the forefront after that, you might get rock 'em sock 'em robots. currently not in the toy aisle if that movie would be successful, you tap in to nostalgia. all of the sudden it shows up in the toy aisle so it might be more meaningful to mattel on a movie like that than say a barbie and you look at some of their

stuff that has not been around in a long time, he man, they have an entire space astronaut line that's even before my time. so there is opportunity here it's not one size fits all but if you can start to show success here from an investor perspective, because that licensing revenue is so important to the bottom line, you could maybe start to see a rerating here in the stock >> andrew, it's karen. just to further that point a little bit, when you think about rerating it, it's sort of mid high teenish multiple. they've had a nice turnaround the last couple of years how do you think what value there could be this where could the stock trade? >> so if youthink about the to industry, right, multiples tend to be 13 to 16, 17 times mattel peaked at 18 times late last year. and that's because the toy industry grows at gdp plus 1 or

2% and that's it. it's a very competitive market and so if all of the sudden you say gee, there is new revenue opportunity that is effectively free money, right, that licensing and revenue goes to the bottom line, and they have a big catalog of ip, mattel is known for barbie, hot wheels, and that's about it, you think gee, maybe that ip portfolio can grow out, and maybe this multiple should be high teens, low 20s. the earnings growth can now be gdp plus something plus something else maybe mid to high single digits. and it becomes a more interesting story at that point. i would caution, we are neutral. though we see the opportunity here, the next movie, the next movie, the next movie is far enough outout, the issues in the toy aisle will probably still weigh on the stock before we get there. >> fascinating conversation, andrew thank you very much. >> thank you >> guy, first of all, did you have a rock 'em sock 'em robot

>> of course i did >> i hand tons of barbies. i'm very biassed in this conversation so would you rather mattel or hasbro >> yeah. well, i think listen, this is a secular declining industry go back to mattel's earns on april 26 was a disaster. you're talking about sales growth, negative 21% year-over-year it was just across the board ng. and that speaks to what's going on they'll get a bump off the back of this and maybe last a coupe of quarters. so maybe there is a trade here so the answer the question, mattel i don't think this is long lasting. maybe they'll do an american girl doll movie. sale sele this stock is the it rallies 12 to 15%. >> they need something to jazz up the sales of the american girl dolls stealth rally over the last month in anticipation perhaps of this movie i don't know >> might a bit j&j, a mature growth company, this is a mature no growth company. earnings the exact same they were in 1995, a walk 22.

30 years later with the same earnings results this is not the kind of thing to fool with. if you see on the chart we have a double top going back. the peak was 2013. and the one before that 1998 its relative performance in the market peaked in 1982. why do it? >> yeah. i think barbie sales peaked too in the late 90s. somewhere around there we'll see what happens after this movie coming up next, your final trade.

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constant contact. helping the small stand tall. it's already time for the final trade. let's go around the horn start with carter. >> buy inflation adjusted bonds, symbol itip, tips. >> karen, thanks for being here, filling in i'm long netflix was long going into today i'd like to buy more, but i think i got to wait at least three days >> dan >> yeah, and i love having carter on the desk because you're to buy it at that uptrend, just like you want to buy the smh buy at the similar uptrend.

sma a seller. >> amplify what karen said you're a pro you're not feeling great, but you came here to do cnbc's "fast money. that's the ohio in you >> you know it >> ibm i thought the quarter was pretty good as people rotate out of high growth, they'll get into ibm. >> thank you for joining us and watching >> my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always and i promise to help you find it. mad money starts now. welcome to mad money. i'm just trying to save you some money. my job is to educate and teach you. call me or tweet me. we got what we wished for. that is my take away.