the builders, public, are rebuilding their inventory, the privates are still running down their inventory, so, i don't think it needs to be an '08 type of event or the late '80s. >> well, kenneth, we'll have to leave it there. great insight. and that will do it for "overtime." "fast money" starts now. it does, indeed. jon, thank you. right now on "fast," major shrinkage in retail stocks. shares of dick's sporting goods suffering their worst day ever, as they slash their outlook over a massive rise in store theft. is crime the main reason retail names are getting punished here? we'll debate that one. plus, sales slump. housing sales fall again as supply drops to a near 25-year low and mortgage rates jump to a 23-year high. is this combo hammering the bull run for the builders? and later, charting nvidia's next move ahead of earnings.

and a bet that baba is ready to bounce back. good evening, everybody, this is "fast money," live from the nasdaq market site. on the desk tonight, time seymour, dan nathan, guy adami, and kristen bitterly, head of north american investments at city. going to call you kris? >> call me kris. >> good to have you. we start with a retail blood bath on wall street. there was red across the board in today's trading session. dick's sporting goods, macy's, nord nordstrom. you see the declines. dick's posting its biggest drop on record after cutting guidance for the year. one big contributor, they say, the sporting goods chain blames an increase in serious retail theft and crime. now, macy's, meanwhile, beat on the top and bottom lines, but disappointing third quarter guidance sent the department store stock to its lowest close in more than 2 1/2 years.

and the weakness pushing the retail etf, the xrt, down more than 2% today, worst day since may, it has now fallen, folks, in five of the last six sessions. even target, which saw a nice bump after its report last tuesday fell in sympathy. i don't know, can a stock really have sympathy for anything? i don't really think so. >> we should have sympathy for -- >> not allowed to do that. don't even say it. we get charged. we get in trouble. >> the big box retailer has erased all of its post-earnings bounce. how about that? so, is this all about the shrink or is that just the -- is shrink the new weather? >> setting me up there -- >> reason why you pointed to guy? >> you have good sight. >> i don't, tim, but there are pharmaceutical companies have addressed that problem, i'm sure you're aware of that. >> interesting. >> is it a problem? absolutely. is it the only problem? no, it's not the only problem. a lot of target's problems have been self-inflicted wounds. the consumer is obviously a problem, as well. they're moving down.

if you listen to -- go back to what dollar gen said, they'll tell you. people are going down the food chain in terms of where they're shopping. who wins to that? one end of the spectrum wins, a walmart, a dollar gen to a certain extent, tjx, and the flip side, which is the high end. in the middle, you get squeezed in this environment. >> is this saying -- these retailers, is it saying anything, kris, about the state of the consumer to you? >> i think that it is. i think we saw this in q-1 earnings, as well. going back to q-1, it was all about the shift from goods into services, where we saw increase in spending, but now we're starting to see only cracks in the consumer picture. they're not overly alarming, but just how a lot of consumers are trading down, looking at rising credit card balances, looking at an increase, a slight increase in those 30-day delinquency rates from a credit card perspective. when you add all of that up, i think ultimately, it tells us a little bit about the spending patterns, and how consumers are making decisions right now.

>> tim? >> by the way, welcome, kris. we heard from jeff at macy's that delinquencies are something that they're listening to, too. so, you have a case where you have a consumer that pulled forward so much in terms of sporting goods, electronics, clothing, dan, i mean, i don't know how many lulu lemon pants -- >> lighting them. >> truly, what we heard with apple, i would make an argument, is the discretionary spend for this largest consumer and largest company in the world was real. the messaging from the companies is also one where they don't see the second half getting a whole lot better. this is all coming in a world where their labor and costs around some of their business have remained high and will remain high. and you've got a consumer that, as we know, from walmart and target, for sure, but the mix, as you pointed out, is very, very different. >> so, why, if it's true, dan, that consumers are feeling this is a little bit, why are they feeling it? they have jobs. joblessness is very low.

incomes have gone up a bit, not maybe as much as inflation, but why are they feeling it to the extent they are? is it because prices have gone up so much and they just can't keep up? >> yeah, and i think there's a lot of folks who have explained that, and i'm sure kris can add a little iq to this desk here, in june of 2022, cpi was 9%. so, a year over year number. and here we are, yes, it sounds great that we're now, like, at 3% or something like that, so, here we are, you know, two-thirds of the way through 2023, but that's still 3% higher than the year ago levels that were up, you know, high single digits. when you think about wage growth, it's just not keeping pace, and guy's been saying this, we were talking before the show, he said in 2021, the persistent and pesky parts of inflation have become imbedded. they were imbedded, but not really covered the way we ridge sterile cpi. so, it's health care, education, housing, all those things. so, we are in a situation where, i think, you know, i -- not that i don't like to give jamie dimon

credit, but when he said a few months ago, be prepared for 6%, 7% interest rates -- i don't think he said that particularly too lightly and i was not in that camp. i'm not an economist or a ceo of a major bank, but we better be prepared to what the fed has to say on friday, and i don't expect it to be particularly dovish. >> how much, kris, do you think rising interest rates are hurting consumers? you've got -- i mean, people ar part because they don't want to trade their 2%, 3% interest rate for a 7% interest rate. but there are a lot of loans that aren't mortgage loans that people have. they have lines of credit, they have home equity lines of credit, they may have auto loans, and those things are -- have drifted up, which is probably why you're seeing more delinquencies. >> exactly. when you break apart the consumer and you say, what is thanning within the housing market? heave heard a lot about that today in terms of existing home sales. people feeling trapped in their

homes, because they want to maintain that mortgage rate. but a lot of debt is floating rate. a lot of dealt for consumers. so, the trend that we're seeing right now is one where you had stimulus-fueled spending, and right now, that's actually converting into credit-driven spending. that, in and of itself isn't bad, but the debt servicing of that is rates go higher and higher, creates a much heavier burden on the consumer. it will affect those decisions that you're making. >> and will be, we talk about the health of the consumer. i'll give you the other side of the coin. i don't think they're particularly healthy. serious delinquency rode from 3.35 in terms of credit card, second quarter last year, it's now over 35%. that's a big deal. those don't move percentage points over the course of the year. that's not going to get better. the consumer is fighting inflation with debt. that does not end well. >> are there retail stocks that you like? >> we talked about tjmaxx. all-time high. that stock grinds higher for a

myriad of different reasons. you can make an -- >> my wife's expenditures there -- >> jo is watching. good to see you. tjx works. and listen, walmart's quarter was very good. the stock reaction wasn't great. the quarter was very good, though. >> the flip side of this, someone like a lulu who reports about, i think a week next wednesday or thursday. and is trading at a multiple that relative to itself over the last three years has come down, but on the trailing basis, and i think trailing is relative in this backdrop when we're talking about the pull forward on discretionary, it's 51 times. i'm short nike, i think you can be short lulu. it's something i'm looking at. these are places where you have bull le bulletproof best of brand balance sheets, leading edge and fashion and apparel, there's only so much you can buy. at these multiples, with -- this is what we talk about the stock market every night, at 350 basis points higher on your discount rate from where you were when

lulu got the premium valuation, that's wone where you look at te chart -- >> there it is. >> i think you have an opportunity on the short side. >> all right, let's get more on the extent of these theft losses with cnbc's senior retail reporter courtney reagan and cnbc digital retail reporter ga gabrielle. companies that are citing theft using the theft to cover other problems in their business or do they really have a theft problem? or both? >> i think it's potentially a little bit of both. i think it is undeniable that thefts and organized retail crime has increased this year over last year. industry-wide, with certain retailers, and in certain areas in the country. we see it from all these different ceos, spoke to three different ceos, executive chairman today, and macy's ceo said, it's elevated, it's factored into our guidance. dick's sporting goods executive chairman said it's going up, it might get worse this year.

we have that factored in. that took the stock down 24%. and lowe's ceo said actually, shrink for us is flat year over year, but i would point out that lowe's and home depot have been pointing to shrink as a material weakness for years now. and so, the fact that it might be flat at lowe's is good, but they've had awhile to sort of figure this out, more so than the others who have not seen this as a more recent phenomenon. >> we had a guest on earlier today that talked about lowe's and the question of shrink and said they have imbedded into some of the power tools that were high targets of theft, impedding rfid kind of chips that block these devices from being used -- >> unless you've actually gone through the point of sale -- >> exactly. so, that's part of it. there are other point of sale technologies they've used, other security measures. they don't want to tell us the details, understandably, they said, i'm not going to tell you exactly what we've done, because what we've done is working and weeded out the bad actors.

but that is an example of one thing that some of the home retailers. >> gabrielle, weigh in here, talk about the theft problem from where you see it. >> yeah, everyone is talking about it, it looks like it's going up. retailers have been talking about it over the last couple of years. there is survey data that shows that retail crime is on the rise, but this survey data is not definitive. it's based on, you're asking retailers, have you noticed an uptick in theft, or what are your shrink numbers? it's all taken on the honor system. it all goes unreported, so, it's really difficult to suss out if this is actually on the rise. i think it's a little bit of both. you are using it as an excuse, other situations, you are seeing an uptick. but something that we need to think about here is that shrink doesn't always mean retail crime. the two worlds are not interchangeable. when retailers are talking about an uptick in shrink, that means

they could be seeing an uptick in damage, in loss, until vender fraud, and a lot of these guys have had bloateded inventories. >> you say, gabrielle, that in dick's case, most of the losses came from markdowns to move inventory, not from shrink. you say target was not talking about crime until they had massive inventory issues, so -- that's pretty pointed accusation there. >> i mean, but the numbers speak for themselves and the comments speak for themselves. if you look in dick's earning report, their ceo said their q-2 earnings were severely under pressure, largely because of shrink and retail crime. i believe they just called it shrink. but when you go in the earnings call, when the an lists are pulling back the layers, their cfo acknowledges this actually the vast majority of the losses was all the work they did to clear out all of that outdoor category they had been sitting on, all this excess inventory. it's interesting when you see

the way they describe it in a press release, and that front quote from a ceo, saying, hey, this is shrink, this is a retail-wide issue, but then you realize that they lost a lot more from markdowns than they did from shrink. that's not to say that it wasn't an issue, and that retail crime is not an issue, but it's not the main thing that drove their losses this quarter. >> court? >> yeah, again, to gabrielle's point, there are all these survey lsz os out there, and ev says, why do you call it shrink, why don't you call it theft? not all shrink is theft. some of it is employee theft and that's not necessarily organized retail crime. >> damage. literally stuff that fell off the back of the truck. >> some of it, damaged, process control issues, unknown reasons for why things have to get written off. it is all part of it. and i think that gabrielle brings up really good points. and target, i keep saying, is one of the retailers that's pointed out at very definitive number in their forecasting of shrink and the damage they're

in. i have never seen any of retailer give you a number like that. and i find it very interesting in this last quarter that their earnings forecast was so far off, yet, they said, our shrink forecast from last quarter, that held up for this quarter, we nailed that on the head. i thought, how can you forecast theft better than you forecast your own earnings results? >> and at the end of the day, though, dick's said same-store sales will be up 2%, second half, as expected. but they pushed down their eps guide by almost 10%. so, the margins are coming down. it's not just shrink. >> absolutely. >> what else is it? >> and ed stack said a third is from shrink. so, that means two-thirds is not, right? it's other things. it's the markdowns. they had strong outdoor business during the pandemic and shortly thereafter, after we came out of it and they had a lot of bloated merchandise. so, they did end up having to discount a lot of that. and they said that sales were

weaker in may and june, and they saw really nice uptick in july. so, i do think it was interesting that they didn't then further their forecast, if things are sort of trending higher and book to school is looking great -- why didn't you move it further? and the answer is, we're trying to be conservative about what the consumer is seeing -- but our consumer is strong. a lot of mixed messages. and you talked about the consumer before, if i can bring in one thing. marvin ellison, the ceo of lowe's, said, for us, i don't think that it's about the consumer's personal balance sheet, i think that is actually pretty strong. you were all bringing up points about what's going on with jobs and the savings rates and all that, albeit potentially declining a little. he said, it's about the fear of the unknown and what's to come. and i think we've been dealing with inflation for a really, really long time and after you pay prices that are elevated for awhile, you kind of just tire of it. you sort to wonder how much of that is worth it to continue to do. >> and while some prices that get inflated come back down, some food prices do, i don't think you're going to see

restaurants cutting prices. >> yeah. >> i don't think you're going to see a lot of prices reduced. >> car prices. >> car prices. gabrielle, final thought here. we have other retailers that are going to report this week, if they haven't already. gap among them, aber crombie, kohl's. how big a factor, or little a factor, will shrink be? >> yeah, so, kohl's has been calling out shrink for a couple of quarters now, at least until last year. so, it has been an ongoing issue for them. they're also more prone to shrink, because of how they are situated, off mall. it's harder to steal from a mall. we've all been at a mall, once you are in a gap or in one of these retailers, you have to exit the store, then exit the mall, it's way more difficult. so, i think that's why we hear that less. gap does see shrink. they invest heavily into organized retail crime

alliances. they don't talk a lot about it, but it's there, and it's something they're involved with. so, i do believe we'll hear it from kohl's. nordstrom isn't somebody that calls it out, but that doesn't mean that they're not seeing it. retailers are loathe to talk about shrink. especially when you think about a more premium luxury retailer like nordstrom. they don't want, you know, customers coming in and thinking they're going to be a victim of a crime or they have to witness crime. look at this video that we're seeing right now. that's exactly why -- >> and that was a nordstrom. >> the smash and grabs have happened at nordstrom. >> this was a nordstrom back a week or two ago. just crazy. and that's -- that looks like an organized theft ring doing that, right? that's not random -- >> and these thieves are going in there and stealing items that get resold on online marketplaces. it's not shoplifting for personal use in most cases. >> yeah. gab gabrielle, courtney, thank you. we're going to trade this a little bit. >> this sounds so ten years ago, but remember when amazon reported last week, remember those operating margins they had on the retail business?

it really is kind oaf interest i ing. we talked about how amazon is going to eat the lunch of the ma'am. it seems like that's what's happening right mow. maybe the build that amazon got punished for during the pandemic, the building out of the logistics, one of the reasons this company had those margins contract pretty dramatically, but maybe they're now getting to a point where this is, like, the place you want to be again. >> i completely agree with that. >> oh, look at that, kris. >> i think one of the things is the health of the consumer, but it is e-commerce, and what happens during the pandemic and some of those trends are absolutely here to stay. so, the buildout of that last mile logistics, the fact that this is how a lot of people buy pretty much the majority of their goods right now. and so, i think if you are brick and mortar retail, it needs to be very neaiche for you to be successful, or you need to have that e-commerce strategy, as well. >> i think that disinflation has been such a theme over the last couple months.

i know it's a very active theme in the hedge fund community, in terms of who they're going after. and it's played out in a target and some of the more obvious places that have exposure to food and grocery, but i just think you have a perfect storm. first of all, these are brutal comps, especially for apparel and discretionary folks. it was as good as it could get. i think margins under pressure from labor. and i actually -- numbers i'm seeing on household savings rates tell me weevil burned through it and i'm seeing a couple economists say we're actually pre-covid levels in terms of household savings. it goes quickly, especially when people are starting to see interest rates take a big part of their month ly cost. >> my wife says hi, guy. >> why just guy? >> i said hi to her. >> she said -- he said hi. jo says hi to everybody. coming up, the earnings keep rolling in. toll brothers on the move. home sales data also filters in.

the housing trade is next. plus, a streak you won't want to brag about. shares of schwab down 11 days in a row. the last time i saw that type of action, the show "friends" was still on tv. we were watching it, it's still on tv. come on, guys. not the reruns, however. we're talking about the real show, the live one. it wasn't live, either. we'll lay out why the stock market has -- why that stock until schwab has hat nnot been friendly. that's when "fast money" returns. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech.

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running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity 10g network. welcome back to "fast money," everybody. earnings alert on toll brothers. shares of the home builder gaining ground after exceeding top and bottom line estimates. the company raised its full-year guidance. diana olick here to break it down. >> toll really blew the doors off. new signed contracts up 77% year over year. this even as the average rate on a 30-year mortgage went over 7% during the quarter. the realtors reported that while home sales were down across all price points in july, they were down the least in the million dollar plus range and luxury toll's average price, $1.06 million.

and they raised price guidance for the next quarter. ceo doug yearly said that while rising rates remain a challenge, they further cement the lock-in effect that has kept resale inventory at historically low levels. with our deep and well-located land holdings, healthy backlog, more efficient operations, and balanced spec strategy, we are well-positioned to capitalize on continued solid demand for new homes. toll also raised guidance for its deliveries. tyler? >> all right, diana, thank you very much. kris, what do you think on the housing market and on toll, if you have an opinion there? >> yeah, so, i think looking at the data that we got today with existing home sales, this is new home sales are the only game in town. people feel trapped in their homes because of the historically low mortgages they locked in. and so, if you have that ability, when you look at new home sales, that is really the only opportunity for buyers and sellers. so, if you have inventory can you put to market, that would lead to some strong results. >> what do you think of the

builders? it's hard to argue with the builders, especially when they give you that kind of guide. the argument against the builders is that the builders are, you know, a year and a half high and we've had an enormous rally, a story that i think we know. they are providing a lot of the financing, where banks are not able to, or willing to, and eating some of the cost. i -- this isn't going to be anything close to a 2008, but the messaging is similar lawyer. there's such demand here, and i think there's going to be, i think the consumer getting tapped out. the xhb, which has exposure across whirlpool and trane and some of the parts and components of the housing market, i think the best days are done for 2023. again, i'm not saying it needs to go down substantially. the dynamics here for the housing market, the macro remains strong, but i don't think rates are coming down any time soon. >> and think about where the home builders have come from, a year ago, or thereabouts -- >> i agree with you tim. >> a lot of love on the desk

tonight. >> that guide and that report, like, sounded great, the stock, it's afterhours, up a half a percent or something like that. normally, you would say, you just want to buy that stock, valuation, supply/demand dynamic. buff the rate thing is not going away. and listen, i have a bearish position, xhb, in puts, so, define my risk, playing for lower lows here. i just think these are the potential to snowball. if toll brothers closed down after that record and guy, i think the trade's done for a bit. >> interesting. and same thing? >> again, we price such great news and remember, when rates were looking seemingly topping when we were calling the top of the fed, the housing market had this second burst here, valuations -- they're not that cheap. >> many of the builders up 50% or more year to date. there's a lot more "fast" to come and here's what's coming up next. brokerage bummer. charles schwab on a streak, but not the kind investors hoper if. the reason behind the move, next. plus, inflation and yields

and powell, oh, my. all eyes on the fed, as central bank officials get ready for jackson hole. so, what will the chair say? and how will the markets react? we'll break it down ahead. you're watching "fast money," live from the nasdaq market site in times square. we're back right after this. mlb chooses t-mobile for business for 5g solutions... ...to not only enhance the fan experience, but to advance how the game is played. now's the time to see what america's largest 5g network can do for your business. ♪ ♪ 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? ♪

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all right, welcome back to "fast money." we have a buzz kill on charles schwab, closing out the day nearly 5% lower. the brother eckage ended lower now 11 days in a row, longest losing streak since 2004, down nearly 15% in just those 11 days. you've been watching this name,

dan, what do you think? >> yeah, it's one that we talk about on the desk, and really in march and april, when you think about the deposit base they have, and the rates, and the mismatch that we had held to maturity securities by a lot of banks, and the regionals that went under because of that, this was a target. it was one of those that was trading abnormally poor, and guy, i'll let you speak to this a little bit, but just the price action of late, it's reversed that whole move. when they reported, you know, five weeks ago, something like that, felt like there was a sigh of relief, but with rates going higher, seems like it's back in the sights here. >> the duration risk they had, schwab has similar lawyer. wlefr they like it to admit or not, it's there. and the stock is trading that way. it was a release on the back of earnings, i get it. people said the coast is clear, they've gotten through it -- then the bond market is starting to act up. that's not good for schwab. and people seem to be betting now, there's significant down side.

and if you go through the twitter machine, it is still twitter, a lot of people are making comparisons to what they saw 14, 15 years ago with the investment banks. you have to be careful in schwab. >> kris, i'm going to give you a pass on the banks. >> i'm happy to talk about financial services, though. >> all right, well, go ahead. have at it. >> i think when we're looking at the pressure, especially from an equity price standpoint, there are a lot of continued pressures, if it is the -- just cash deposits moving into t-bills, moving into money market funds. money market funds have eclipsed $5.6 trillion. and then when you add on top of that whether it's additional capital requirements, there's just a lot of pressures from a profitability standpoint, so -- our best expression of going long financials is in the preferred market. and the preferred market, you're investing in the large banks who have strong balance sheet and then you're getting compensated with an above market yield to do that. >> yeah. tim? >> $36 billion last week in money market funds. equity markets overall are

competing with this dynamic. regional banks are competing from a net interest income and i would just argue, you look at the move in the kre overall, it's -- you've had multiple hits over the last three weeks. first of all, the downgrade of the banks, we've had s&p follow through you and i think this is the downgrade that people pay more attention to. look at where the two-year closed today. 5.04? we're at a high. high for the cycle. this isn't great for regional banks, when you consider the exposure. people were pricing in around svb, capital flight risk, but it was also commercial real estate and things that people were expecting to happen. higher rates are only putting us right back in their face. >> i work on a charity in northern new jersey and we have taken money that otherwise might have been in a bank, the bank that we do business with, put it in short treasuries. i mean, that's just where you get paid the most, you have the optionality when you roll them over to reinvest, it's -- >> banks have had no choice. they were fighting very hard to fight these deposits and

interest rates in savings and they have to. especially when you consider what's happened to their deposit base. coming up, what should you expect out of jackson hole? jerome powell set to speak in wisconsin. he will do that on friday. what will we expect and what will it mean for the markets? and august has been hard on alibaba, but the selloff hasn't stopped one of our traders from ba-ba buying up that stock. >> nice one. >> i haven't preread that one. >> thank god. >> no one should be surprised by that. what is? myplan from verizon. switch now and they'll give you nfl sunday ticket from youtubetv, on them. (hero fan) this plan is amazing! (josh allen) another amazing plan, backing away from here very slowly. (fan #1) that was josh allen. (fan #2) mmhm. (vo) for a limited time get nfl sunday ticket from youtubetv on us. a $449 value. plus, get a free samsung galaxy z flip5. only on verizon.

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welcome back to "fast money," everybody. stocks closing mixed today. the dow dropping half a percent, the s&p down three-tenths of a percent, but the nasdaq, while virtually flat, did manage to end in positive territory by 0.06%. it's the first time the month the stock has posed two straight days of gains. shares of eli lilly, all-time highs all the way back to 1952 when it first started trading. that stock up more than 70% over the past year. let's look at u.p.s. afterhoute

approve a five-year contract. investors looking ahead to the fed's jackson hole symposium. it kicks off thursday. with it, jerome paowell will gie clarity on the path ahead. but kris, you don't think we're going to hear much. he really shook things up last year at jackson hole, seven, eight-minute speech -- >> can't remember, it was nine minutes, but i think we're not anticipating one of those like we saw in 2010 or 2012. what the market is going to look for is a couple of different things. this narrative around higher rates for longer. is he going to give us anything related to that? and then, the other thing is this whole concept which, i don't think he's going to give us a lot of information about, but it's a big discussion, the neutral rate. and this idea that the fed could be in a position to start cutting rates regardless if we see a big deteriorate in the employment backdrop. you would need inflation to come down in a material way.

we're going to look to commentary around the neutral rate. anything in terms of higher for longer. but we're not expecting much. >> why have longer-term rates, longer duration rates, gone up as much as they have, the ten-year, 60 basis points -- >> yeah, when we, even the past couple of weeks, it's about 50 basis points. i think there's a couple of different reasons. the first one being the overall economic data and the growth backdrop. no longer an inflationary story, but more commentary around a soft landing. the massive amount of issuance coming to market, and then, we had yield curve control and the unwinding of that, and i think those three key things is what really kind of drove up the back end of the curve, but from our perspective, i think that's a buying opportunity in terms of adding some of that exposure. >> something like a trillion dollars worth of federal debt is coming off in the next 90 days or something like that, dan. >> yeah, i mean, these guys have been talking about it a lot. it's above my pay grade here a

little bit, but just, listen, you know, it's just gotten to a point where this bond bobble t bubble we've been hearing about for 15 years, it seems to be finally coming a bit undone. and guy says all the time, careful what you wish for, because once these things are set in place a little bit, sometimes they, you know, end up going off the rails a little bit. and guy mentioned the move index. all of a sudden, it's been picking up a little bit. we have a vix on its way towards 20. it feels like a lot of things might find themselves kind of slamming into each other. and we haven't had a period like that. really since probably march, where we've had lots of different risk assets going lots of different ways, causing lots of different volatility levels, and that's where stress can kind of happen here. so, i feel like september, we're in for it a little bit. >> you said that last night, and i kind of get that vibe, too. >> i think you can have both, though. the setup into jackson hole is the equity markets are down 5% and equity positioning in the last month has changed dramatically. people have chased bond yields higher. people are so offsides under

that trade, so -- i actually feel like there's very little that powell can throw at us, because frankly, the fed is very unclear where, you know, some of the systemic inflation can really abate. we've seen a lot of the low-hanging fruit come off and they're going to be very careful about that, but i like equities going into jackson hole. and i like the ability to get a bounce. i think that the dollar, which has been the beneficiary of some stuff in china, some stuff in -- around the world, is having the kind of rally that i think gives you some room to see it give something back and that's going to be great for equities. i don't love september at all. i'm talking about a market that in the last three weeks has gone from being euphoric on the bull side to actually changing tune very aggressively and i think as a trader, you have an opportunity. let's talk about abee baba. shares lower again today. the china tech giant seeing a big drop this month, down nearly 14% in august. but is the selling overdone? one of our traders has been scooping up some shares, tim. that's you.

>> i am ba-ba -- >> ba-ba -- >> sounded like bowser. but -- honestly, i felt like bowser investing in baba, because it's not been an easy trade. i would argue for all of the pain that ali baba's put in, emerging markets, which, a month ago, looked like they were breaking out. as someone that's invested in em for much of my career, em can always go lower. nibbling on em here, for some of the same reasons i said, just from a positioning, i think there's a trade here. i think the dollar is not going to hold. it's not going to 105 in the short run. >> alibaba, this is not about investing in china macro. this is investing in a company that was effectively dismantled by the government and put it back together on their terms, and terms that will work for equity investors. for all the pain, and guy says this all the time and probably has the ranges ready to go, you can still be in a downtrend and have a 40% rally here.

i actually think it's an investment now not just to trade. and it's been one step forward, two steps back. >> your name was invoked. >> you go back and look at the quarter they reported, it was a very good quarter and the stock acted in kind. went from 88 to 104, and then iit e it's given the whole thing back. for a myriad of reasons, not least of which -- not anything to do with alibaba, all the things we've been talking about for a couple weeks. tim is right. you've been able to trade this stock on the long side, in a 2 1/2, 3-year downtrend very successfully in this 88 level is probably one you can do it from again. coming up, new estimates on just how much damage the hawaiian wildfires have done. insurers bracing for a flood of claims. we have that story next. plus, the poster child for the a.i. frenzy is on deck to report. what are options traders expecting from nvidia's earnings tomorrow? that trade and more ahead. stick around, because a lot more "fast money" will be coming

right at you in two minutes.

welcome back to "fast money," everybody. from record-breaking rainfall in southern california to the maui wildfires, natural disasters are causing billions of dollars in

damages and insurers are bracing -- bracing for a slew of claims that will come from that. cnbc's contessa brewer has more. >> hi, tileyler, hi, everybody. insurers are bondering what the claims are going to be for the wildfires. moody's rms estimates, and this has just come out, that property value -- insured property value could be as much as $4 billion in damage, and then, of course, we're looking for those damage estimates for hilary sweeping up through california. already this year, natural disasters have cost the insurance industry more than expected. and we really saw that in second quarter results for allstate, we saw it for travelers and others. swiss re reports that thunderstorms in the u.s. caused $34 billion in losses for the first half of this year. thunderstorms. that's the highest ever insured loss in a six-month period in the nation. across the u.s., most of us will pay the price for additional

call as the trophy costs. property owners, individuals or businesses, are likely seeing higher premiums. homeowners insurance, for instance, is up on average 10% from a year ago, and we've had several years of what the insurance industry calls a hard market, that's rates on the rise. some insurers are really taking advantage. chubb reported record second quarter net income, it jumped 50% over last year. yet it's stock just getting punished, down 10% year to date. so is aig. allstate, down 22%. meanwhile, you've got arch capital up 19% year to date, and the brokers doing nearly as well. of course, remember, brokers take on none of the risk, they make more money on commissions and their fees when rates go up. so, for them, they're sitting pretty. >> all right, contessa, thank you. let's trade it a little bit. guy? >> contessa's all over this. but chubb has been a mons eer

stock until the last couple months. and typically, and you look at the quarter, it was great. when the news is at its worst, which we're getting there, that's when you start to buy these stocks. and as she said, c has gone from 240 to 199. watch and see. when you start to hear everybody talking about insurers and how basically up against it they are, that's typically when these stocks bottom out. >> and you look at the fact that you pointed out, the profits are good, but the stock is not, so -- at some point -- >> the flip side of that, by the way, insurers are earning a lot more on their investment. the other side of what they've had to do -- this should concern people, because they've had to reach out the risk curve like everybody else when rates were zero. it's a time when they can manage their liabilities very differently than they could before. >> all right, contessa, thank you. >> sure. all righty, coming up, we are diving head-first into nvidia earnings. the chart master tells the technical tale for the chipmaker. plus, how options traders are

positioning themselves ahead of tomorrow's report. more "fast money" after this.

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alright. xfinity rewards creates experiences big and small, and once-in-a-lifetime. all right, let's turn to nvidia. it has been three months since the chipmaker's bullish a.i. commentary in its last earnings

call sent the company into the trillion dollar club market value cap market value-wise, but with a stock hitting a new high today, the day before it's next report, how much room is there left in the rally? the chart master says the stock's reaction could be a total tossup. carter worth of worth charting joins us now with the tale of the technicals. carter? >> thanks, tyler. i don't think it could be, i think it is. it's just a pure flip of a coin. we know that just three months ago, actually, consensus for 12-month price target was 300. of that beat, the consensus is it will be 520. it's almost an fda approval kind of thing. drug beat or drug miss, so to speak. let's look at a table and two charts. so, what we know is, if you look at the last six quarters, you could see that the two most recent, the price reaction to earnings was epic, right, up 14%, q-4, and then the most

recent, up 24. but if you look at the last 40 quarters, the median move is about 4%. so, this has been exceptional, and the question is, does it happen again? let's look at one of two identical charts. the first has no lines, no drawings, no anotations. and what i would highlight, of course, is the gaps associated with the earnings. look at the third and final chart, this is what we have, we gapped and we gapped again. and what we know is that you typically get two or three gaps. rarely four. so, the question is, do you get that third gap up or is it all now priced in because, again, three months ago, the price target was 300 from analysts, now it's 520. i have no clue. i think it's virtually a coin toss. and i think the street is in the same boat. i think everyone's in the same boat. many are betting for a miss, or not good enough and many are betting for yet another big, big punch higher.

>> we'll see. what do you say, dan? >> it's a tough one. i mean, listen. i think what's baked into this is, they're going to beat the quarter and guide up massively. i can't tell you, in my 27 years in the business, where there was such a certainty that this was going to happen in one of the biggest stocks into the entire stock market. that is the consensus right now. so, if they do all that, okay, the options market, and sorry to step on mike's toes, is implying a 10% move in either direction. we talked about it last night. that's $100 billion in market cap that it might move. now, it might not move at all, that sort of thing. but when you think about that 24% gap last quarter, that was easily $150 billion move from that lower level. so, listen, to me -- >> in a day. >> i agree with him. i think it's a mania. i think -- it's got to be a monster blowout. it gaps up, and i think they sell it. i don't think there's anyone left to buy this stock, especially at this valuation. >> guy? >> the reversal today was epic. 1 1/2 times normal volume, made an all-time high at the

beginning of the day, spent the rest of the day selling off. that could fly in the face tomorrow this time. we could be talking about a stock that's north of $500, having a much different conversation. but they better really -- talk about a beat and guy higher like last quarter, they have to outdo themselves again. i don't see it happening. >> i have a feeling we're going to be talking about this one tomorrow. >> you're here? >> i'm going to be here. >> the group, though, is what you have to watch. this is one that's pulled the whole group, which has pulled the market higher. >> all right, options traders betting the report could fuel a new round of gains for nvidia. mike khouw joins us now with the action. hey, mike. >> yeah, i think they're making hedge bets to the upside. this is always one of the busiest single stock options. today, it was second or third overall. implying a move of about 11% higher or lower by the end of the week. one of the bigger trades that we saw, making that upside belt to that $520 price target that carter was just referencing. but not risking a whole lot relative to the current stock

price. they bought 3,400 of the calls and sold as many as the 520 calls. they risks just under 2.4% of the current stock price, making a bet that the stock could be up between 6% and 14% by september expiration. >> all right, mike, thank you very much. and of course, for more options action, you can tune sinto the full show that's friday at 5:30 p.m. eastern time. up next, our final trades.

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all right, time for the final trade. we're going to go around the horn. kristen? >> all right, so, this whole debate about whether you should be in the market not for the next couple of weeks. take advantage of the muted volatility and just edge it. that makes a lot of sense to get yourself through the events. >> tim? >> sentiment in china as poor as i've ever seen it here and again, baba is not a china macro call. >> all right, dan. >> sentiment in the u.s. seems really complacent. housing, i love that discussion we just had. xhb, i remain bearish. >> learn something new every day. we're in the green room, kristen said, call me kris.

and you said, omg, my real first name -- >> that is my first name. >> is chris. >> i didn't know that. >> did you know that? i didn't know it. >> you weren't paying attention, but yeah -- i like tyler. >> i like tyler, too. i like everything about ty. you'll be back tomorrow? great having kris here. international business machines. >> >> there you go. thanks for watching "fast money." "mad money" starts 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 cramerica. trying to make a little money. my job is not just to entertain you, but educto educate you and teach you. so call me or tweet me. somebody's very wrong here. we've seen so many articles with data points that show