terms of the earnings we saw. >> yeah. it's back down again, so, should people get in or not? rare conversation with the ceo about what he sees coming next. and, you know, this ipo market, of course, we're going to continue to track that. >> we're going to continue to track that. majoraverages finished the day lower. that was despite starting the day with gains, and, of course, this was all on the heels of the fed. that's going to do it for us here at "overtime." >> "fast money" starts now. thank you, jon, thank you, morgan. live from new york city, it's "fast money." here's what's on tap today. hoping for a rate cut soon? don't hold your breath. the fed reiterating it plans to stay higher for longer, sending yields to 16-plus year highs. all the market reaction is coming up on the show. plus, striking a blow. more than 4 million days of work lost as union members from detroit to hollywood and beyond hit the picket lines. so, how much will this cost the economy? we've got a top labor economist,

who is going to break it down. and later on, going old school. shares of ibm surging to their highs of the year. why one analyst thinks this big tech bet can teach the new generation a thing or two. i'm dominick chu in more melissa lee, coming to you from the studio b at the nasdaq. on the desk here tonight, we've got tim seymour, also karen finerman, dan nathan, guy adami, as well. we start with the warning that sent stocks tumbling today. major indices all closing at our near their lows of the day after the fed signaled one more rate hike before the year's end. the promise of higher for longer spooking stocks. the nasdaq dropping more than 200 points. now down 4% in september alone on pace for its worst month of the year. steve liesman is at the fed with all the headlines out of the central bank. steve, this was a scenario, we were expecting a hold and it happened, why did the markets

react so negatively? >> i waswarning about higher for longer, but this is even higher than i thought. the fed leaving rates unchanged, as expected for the september meeting. but signaling it's going to keep rates at a high level for an extended period, in large measure, because it sees the economy is stronger than previous forecast. the fed raised the funds rate forecast for next year, and the 2025 by a full half point. what it really did was take off a half a point of cult they originally had in their forecast. at the same time, the fed doubled its growth output to 2.1% this year and boosted numbers for next year, as well. all of that with less unemployment. overall, pretty bullish on the economy, but fed chair jay powell explained more growth could mean higher rates. >> rather than pointing to a sense of inflation becoming more persistent, i wouldn't think that's not -- we've seen inflation be more persistent over the course of the past year, but i wouldn't say that's something that's appeared in the recent data.

it's more about stronger economic activity. >> so, with an unchanged inflation forecast, what it all means is the fed's real rate will actually get tighter next year, as in more restrictive. at the same time, working against the better growth story, the auto workers strike, the potential government shutdown, higher bond yields and oil prices. maybe noll individually a big deal, but together, they could amount to something. the kicker, a government shutdown means the fed doesn't have the data to know what's going on. that would make policy making even harder than it is. dom? >> on balance, steve, is the negative side of the economic story greater than the positive side, given everything you just laid out? >> i think if they persist in this idea of next year of keeping rates high, with lower inflation, that's a more restrictive story, and i think there is some danger here, dom, that next year, they snatch defeat from the jaws of victory. they're headed quite nicely to a soft anding, i think, here, but this idea, which, by the way, is

the opposite of what john williams from the new york fed told "the new york times" not too long ago, that if inflation comes down, the fed has to pivot and lower the funds rate, it's not really doing that quite so much. it's going to allow things to become more restrictive. i think that would be a mistake next year. >> steve, it's karen. so, they have said they could be data dependent, right? that would be relevant data and sort of declaring victory on inflation. i think that would give them some leeway to back off the -- or i guess add back the cuts that they took out today. >> it could. what bothers me a little bit, karen, is the forecast is for 2.5% inflation next year, and yet they maintain that 5.1% funds rate. well, do the math. and by the way, if you look at their real neutral rate, it's a half a point, so, they're talking about still being restrictive well into next year, four times the neutral rate. i don't understand that. now, maybe there's a game going on here, a little chicken game

where the fed doesn't really want to show its cards that ultimately they are going to cult a lot next year, relative to at least keeping rates -- the real rate not very much changed, but right now, the outlook is for a more hawkish fed, but as, you know, christian said earlier, it's bullish and hawkish, to put a couple animals together. >> bulls and hawks. they were meant to be together. steve liesman, thank you very much. we'll see you later on. tim -- >> dom, great to have you, first of all. >> thank you very much. based upon what steve just said, glide path is what i think of, the fed is on the glide path. >> remember, we had -- >> some cat that came on the show, told us what his nickname was, and that was probably the worst thing he did in his life. >> you don't make up your own nickname. >> so, what is it? >> what we heard from steve is what we heard from the fed. it's kind of like when your accountant says, you're paying

more taxes, so you should be happy. if the economy is doing better and the fed actually has to hang in the pocket longer and be more hawkish, this was obviously what the message was today. the question is, when the fed says, soft landing is not our baseline expectation which is the point they made very clear, is that -- they don't have to see a soft landing? you know, look, we know what their mandate is, right? the mandate is inflation and growth, and essentially full employment. and so, where does that leave the economy? i think that the fed has no idea where the data's going. and i think these comments today were very hawkish, they took 50 bips off next year in terms of the ease that was expected. what's hawkish. but i think they have no idea. and i think the data that's coming through, they upgraded the economy, they upgraemded the labor, and these are relative to where they were before, and i think frankly well have no idea where we're going to be in three months. >> seems like, guy, the situation now is the economy is in a good spot, so, is the fed having an easier time or a harder one with this? >> well, first, i'm going to channel sonny corleone, and you

can imagine how hawkish they were on dan nathan's birthday. >> happy birthday. >> that was good, you like that? >> snuck it right in there. >> let's not confuse the issue. the fed should not declare victory. they're trying to solve the problem they created in the first place, and if i seem a little animated, it's because i am. they've gotten it wrong all along and they probably will continue to be as hawkish as they possibly can be into early next year. the market doesn't anticipate that. look at the late move until hyg today. neither one of those are bullish for stocks. this is not a good thing. higher rates are not good for stocks. >> yeah, through the lens of the stock market is kind of interesting. look at year over year. the ten-year u.s. treasury yield a year ago on my birthday was 3.4%, now 4.4%. look at what crude's done year over year, look at the dollar. it's a little bit higher there, it's been pretty volatile. the one thing to me that is

interesting that sticks out like a sore thumb is the s&p 500 where it was. a year ago today, the s&p was at 3,800 or so. and you think about that, and i see the scenario for a soft landing, but when you think about the lag effect of all of this policy, right, that they've done over the last 18 months, i say to myself, something has to give. we have a 15 vix now, a year ago, we had a 25 vix. i just feel like we've been very complacent here. and some of the moves we've had, apple today was down 2%, microsoft down 2.5%. both down 11% from the all-time highs made in july. you know, the semiconductor index has not made new highs, the qqq, the nasdaq 100, appears to be rolling over a little bit. and we can go beyond that, we can look at the transports are not trading particularly well. industrials are not trading particularly well. i think we have a situation br the s&p and the nasdaq, i think, as a monolith, are kind of masking a lot of bad performance under the hood in the stock market. >> karen, what's curious, two

years ago, on this day, your birthday two years ago, 30-year fixed rate mortgages were a hair over 3%. 3.02% or something like that. today, they're pushing 7.3%. more than double. the housing market has remained resilient. >> for now. >> for now, fair enough. >> everything is a cycle, but even the stock market's remained resilient, given 500 basis points worth of interest rate tightening. what derails this? >> well, something's got to give. the housing thing, because it's -- the market's rigged. there's no -- anybody with a mortgage isn't selling, so, you have this sort of unusual situation of not as many houses for sale. i do think, though, the thing that's got to give is the market, to guy's point, rates are higher, which should mean equities lower. it's just math. equity risk premium. and so, i feel that -- i want to be hedged in the more high flier names. the igb, short the qs, but i'm always long. i'm net long, for sure, so, i

think it's going to be painful. >> going to be painful for sure. so, that brings up this discussion about more on the stock market overall. for that you we'r, we're going in stuart kaiser. you heard the banter so far. it's got to be akin maybe to what your discussions are like on the trading desk about the push and pull in the market, is it not? >> yeah, it's a push and pull. the positives from lower inflation and positive gdp revision get offset by 50 basis points less of hikes. and i think tactically speaking, the rates are what drove the market lower today. but if you are looking weeks or months out, that positive growth outlook has to be what you're more focused on. and you have to take the view that if equities are strong, but growth starts to weaken that the fed is going to not be astern as they've been recently. you know, we had a lot of clients tell us, it's easy for the fed to talk hawkish when the job market looks like this. show a little weakness in the job market and see if they

change. >> is there any expectation to see weakness in the job market? there's been talk about it for a year at this point. >> look, you had the jolts report a few weeks ago. that showed some loosening, but that was followed up by a strong payroll report. there's no cooling yet. people will say, the strikes, amazon then says they're going to hire 250,000 people. so, we're not seeing any weakness in the labor market. if you are seeing any cracks on the labor/consumer side, it would be on the credit card spending side. it does show lower spending. a lot of the retailers talking about higher delinquencies. that's certainly something folks are focused on. >> you talk to a lot of smart investors who are moving large pools of capital around the market. what do you make of just the level of complacency. i think under the hood, there's some things, there's some cracks that are starting to happen, but one thing when i was listening to this presser today and looking at the high growth tech stocks sell off really hard, i want to the options market, i looked at the qqq and i looked

at next friday, the 29th, seven trading days from now, and they cost me 1% of the etf price. that seems really cheap, especially when you have -- so, talk to me about, like, the level of complacency and what the market is pricing, because i bought those. i'm like, you know what, i'll sit on those for a week and see how i do. >> year to date, you've been rewarded for sort of just embracing the good news. why are yields and equities higher? because economic growth data has surprised consensus expectations over that window. i think what you see in the last two to four weeks, that started to shift a little bit. the growth isn't beating by as much. yields are rising for less good reasons, and you're starting to get some pressure, but look, anybody who has faded tech this year has regretted it, and that's why you see upside still priced into that space. and the last thing i'll say is sca scarcity. there's a scarcity of positive consensus revisions if you can find stocks that have that, you know, people are kind of reluctant to walk away. >> stuart, let me ask you something about labor. so, this is -- we never expected

to have an unemployment level of this low and sustained. does that take away some of the room that the fed has, what's considered an acceptable reversal in labor markets before they need to sort of turn dovish? >> it's a great question. if you took the message at jackson hole, i think chair powell was reminding folks that we're willing to pay a growth price to make sure inflation comes in, right? today, though, they revised the growth number. so, look, acceptable, i think the fed has meshed it consistently that if we create some job losses, and that's the cost of inflation lower, then they're going to do that. whether they follow through on it when the data appears, i think, is the ultimate question, right? in our view, a soft landing, in this case, i mean a nonrecessionary growth slowdown would mean that unemployment stays below 4.5%. recession that is above 4.5%. so, that's the line for us. >> stuart, before we let you go, what do you think? what is your favorite spot to be

in, given that backdrop? >> gun to our head, we're still positive on equities. there's a window here where once the markets digest the move higher in rates, they're going to reorient themselves to the positive growth stuff. i mentioned scarcity in tech. it's an area that we still like. the caveat here, though, as mentioned earlier is higher rates eat on tech a lot more than they eat on other spots. you might argue that the higher rates with the positive growth impulse might warm you up to cyclicals a little bit. it's been very narrow leadership. if we have a broadening of leadership, quite positive. >> all right, stuart, thank you. great to get your thoughts here. i wonder, folks, if we talk about this overall, there's got to be a feeling that there's a good spot to be in, if it's not technology, if it's not energy, which has been an outperformer over the last several months. >> cash? >> is it cash? 5% in the bank? >> there are reasons why energy is going to be resilient, and there's a valuation justification there. i think -- i would be a little

bit more concerned around some of the industrials, which always look relatively cheap. i think tech's going to be defensive. again, you can't tell me both based upon history and where the balance sheets are and the ability to buy back stock and manufacture earnings for the top five, six tech companies in the world, and they will be where people run for defensive. i think in the short run, look, the s&p is getting very close to that 100 day. there's no reason why we shouldn't have a little test there. higher rates here for a little bit, but 4150 would be a great level, if you could make a call here, and i'm not making a call, i'm sayiing tactically, i think because we haven't had a move in the s&p, before you get to the dynamics. the fed is in the market. we won't know that until next year until they prove us wrong. you think equities are going to trade as if thefed has to jump in. whatever he said today can be very different in three months. so, you're buying the market as you get into late october, into those year-end months, and then you just take the market you have had in front of you. the whole dynamic with the market over the last year, and

we did, i think it was right to bring up where we were a year ago and where we were two years ago, is, time has been the biggest dynamic here. this is all taking a lot longer to play out. it's been a lot longer for the fed, it's been a lot longer for the labor market, but there are certain things that are guaranteed when it comes to a market that right now trades at a multiple it doesn't deserve. >> karen, wasn't your final trade yesterday -- >> yes. one-year. you watched the show yesterday? >> you know, i make it a point to try to pay attention. >> yeah, the risk/reward seems compelling. but i think to tim's point -- well, i don't know, i guess i should say, i'm staying long, even though i am afraid. i think the next direction is down, just rates, i think, we're going to have trouble selling this many bonds. so -- >> yeah. supply an issue coming up. all right, next on the show here, we have some earnings action. shares of kb home and fedex on the move after reporting their latest results. we've got all the details coming

up next. plus, ipos in retrograde. arm and insta cart nearly giving back all of their first-day gains. will other new offerings follow suit? we'll debate that, wn ashe"ft money" returns after this break. to address operations issues? we can help with that. can we provide health care virtually anywhere? we can help with that, too. is it possible to survey foot traffic across all of our locations? yeah! absolutely. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening. ♪ ("un monde pliable" by jeongpill song) ♪ (♪♪) [camera shutter] (♪♪) (♪♪)

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welcome back to "fast money." an earnings alert on fedex and qa kb home. fedex up 5.5%. frank holland has the details. >> dom, investors are clearly buying the cost-cutting and transformation plans that fedex is currently in the middle of. it eliminated $1.8 billion in costs permanently, while still beating on eps and raising the low end of eps guidance. looking deep entire the numbers, express missed, while ground beat on both. e-commerce division of fedex, 13.3%. margin expansion here. and that's compared to a sub 10% estimate. and expansion, 8.5%, just a year ago. so, fedex gained some premium business during the u.p.s./teamsters negotiations, and that appeared to help the results. the only surprise was freight

missing on revenue estimates. it was believed fedex benefited from the bankruptcy of yellow, another trucking company in the same space. the ceo spoke about the plans about bringing fedex into one company, saying, continued focus on revenue quality, partially offset by ongoing demand weakness. weakness appears to be centered on the express air delivery business, where average revenue fell by 8%. ground revenue increased by 3% and freight by 2%. the call starts at 5:30 eastern, expecting commentary on the holiday quarter and the macro environment that gave fedex the confidence to raise full year guidance. back over to you. >> thank you, frank. let's trade fedex. guy, what do you think? >> so, look, if you had to make a choice between a huge beat on eps or revenue, i'll take it on the eps side. karen was talking about this before the show, they're operating better. and you see it in operating margins. for them to come in at 7.3%, that's actually significant.

so, good for them. it makes the stock actually look cheaper now given the beat than it was prior to earnings. and it should be able to build on this. fedex has been, listen, they've been their own worst enemy for the last three, four years, but this indicates to me at least, maybe they're finally getting their act together. >> yeah, i think they're finally getting their act together, and, i mean, they had a lot of margin to gain, to get closer to u.p.s., and i'm long u.p.s. now. i think that there was a little bit of that, either switching or people who want to hedge their bets if u.p.s. goes on strike, they have to ship packages. they lost a bit of business there. i don't like them saying ongoing weakness, though it was air freight, but they are sort of right in the center of e-commerce and i'd rather see -- i'd rather see a little better revenue, also. >> all right, and u.p.s. getting a bump there on the back of fedex. moving to kb home. shares are lower despite the company posting a beat on the

top and bottom lines. let's get to steve kovach for more details. steve? >> hey there, dom. the beats on the top and bottom lines for kb home third quarter. eps was a beat at $1.80 versus $1.43 expected. revenues beat, as well. $1.59 billion versus the $1.48 billion expected. but shares are down due to a sales decline on the top line compared to last year. company citing tough comparisons to the strong quarter a year ago, but the ceo saying in a release 2023 will be more profitable. revenue was $1.59 billion, like i said, down from more than $1.8 billion in that year ago quarter. kb home also saying net orders increased 52% to 3,097, crediting improving demand and lower cancellation rates compared to last year, because buyers were canceling due to the rising interest rates back in 2022. call just getting started, dom, and we'll be back with any

updates that are moving the stock. >> all right, steve kovach, thank you. let's trade it. karen, you're up for kb home. good or bader is the housing market and home builders priced for perfection? >> i think sentiment could change, right? i think they've been able to execute, they've been able to, also, i think -- the price might come down, but we've seen margins hang in there, so cost may be going down. but i think sentiment can change if we see rates higher. i just think sentiment will change regardless of how the underlying earnings go. >> i think the stock's up 50% this year, i think the housing data that came in earlier in the week doesn't necessarily hit kb and i'm talking about the index, multifamily starts that were down 11% and over the last couple of months it's close to 20%. i think there's just a reality to the housing market in terms of interest rates and where some of these -- some of these deals in terms of apartment houses and a lot of stuff supporting the broader market. i think that whole thesis is

under some -- some heavy headwinds. i think housing stocks have had their best run of '23 and i think they're going lower. not because the valuations are terrible, certainly not because their balance sheets are weak. >> it's interesting, dom, a lot of folks have poo-pooed the student loan repayment that's starting off next month. think about the things that have changed, this work from home environment, all this sort of stuff that's happened on a very low rate environment, until now, right? and now when a lot of these folks who were, like, leaving the cities, moving to, you know, buying homes with cheap mortgages and now they have to start paying back student loans. i think this higher for longer thing, i think, really does have the potential to go the other way. tim has been saying this about the housing stocks. just pulled forward a lot of excitement about the supply/demand dynamics, but in this rate environment, given what could be changing about the health of the consumer, i just don't see how these stocks make any sense. >> all fedex is up 4%, kb down .

there's a lot more on "fast money," here's what's coming up next. what goes up may come right back down. the ipo market is getting busy, but day one pops are proving hard to hold onto. the big 360 of recent debuts. and will other new listings follow suit? plus, the auto strike continues. the latest developments in contract negotiations, and what all the work stoppages mean for the ghee. you're watching "fast money," live from the nasdaq market site in timesque. 're back right after this.

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the latest ipo having another solid debut. klaviyo is jumping 9%, but shares had been up more than 30% at their peak today. that trajectory similar to what we've seen from other ipos in the past week. arm holdings and instacart are close to their offering prices. instacart briefly fell below that level during today's session. dan, what's up? >> it's interesting that stuart mentioned the demand, or the sk scarcity of megacap tech stocks. the fact that they have given back all of those pops, even -- at valuations that were less than their last funding in the private markets, it tells me that, you know, investors like the things they have consistency with. i think it goes back to what tim was also saying about the defensive nature of some of these stocks. so, to me, i would expect instacart to break price. i would expect arm to break price. and it does give you a little bit of a sense of where

investors are on the risk curve of the things that you don't know how it acts in the sort of environment that we had in 2022 so, to me, i'm not -- i don't think it's a great start for the ipo market being rekicked into gear here. >> so, arm is going to do -- we talked about this the last couple mights, $3 billion over the past couple years, 2.7ish. that should be trading, in my opinion, no more than a 15, 1-5 multiple of sales. so, you have a $45 stock. at the levels it traded up after the ipo that was just absurdity. you have to get to some -- valuations do matter at a certain point. and even at 15 times, the stock was expensive. >> rick heitzmann said this on the show last week. i don't think the funding markets and certainly the private markets are wide open. you know, so, let's be clear. arm was kind of a lay-up based upon this company, it's coming back to market, it was -- it was the perfect ipo, and the group behind it certainly know what they're doing, the group here at the nasdaq know what they're

doing. this wasn't a big question. but i think there's a lot of still questions. and we still don't know where rates are. we don't know where credit is. so, i think investors are just as discerning on buying companies that are profitable and not high multiple stocks, so, i think the companies that are doing deals are -- or after least raising some money are in the space where they are showing free cash flow and may beutility utility-like. i would say consolidation and m&a is kind of interesting now. that's going through in places where companies have balance sheets. >> karen, are capital markets due for a turn up next year? >> well, this doesn't help. it did three days ago, looked much better than it does now. tomorrow, wouldn't be surprising to see two out of the three, maybe down. so -- i do think we have a lot of refinancing to do, and that can be good, and that can spur m&a, that's possible, but i think in -- this isn't great for banks, they were hoping for a big ipo market. >> let me just say one other

thing. if you are a tech company, waiting to go to the public markets this is it, man. the nasdaq is up 30% on the year, the s&p is up 18%. if you can't get deals done in this environment at the sort of valuations they're coming at, then i think we probably do have a pretty tough time in this rate environment, because remember, all these companies saw these crazy valuations. insta cart was skipping up $10 billion at a time, and this is two years later. all rightright, coming up. what one big automaker is offering, and how much are the stoppages costing the broader economy? that's next. plus, a picture perfect trade. analysts showing some interest in pinterest, after the company's investor day. we'll go inside those numbers ahead. "fast money" is back in two. missed a moment of "fast?" catch us any time on the go. follow the "fast money" podcast. we're back right after this. metg is happening here.

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welcome back to "fast money." stocks closing in the red after the federal reserve signaled there may be another rate hike on the horizon, even if it left rates unchanged for now. the dow down more than 70 points, the s&p dropping nearly

1% and the nasdaq leading the losses, falling more than 1.5% to near session lows. shares of block down 4% sea. the head of the company's square payments unit is stepping down. chief executive jack dorsey will step in as a replacement in the time being. block is down six days in a row and nearly 25% of its value so far this year to the downside. dan, what's up with block? >> this is really interesting. this stock's down, it's been cut in half this year from its highs, down 85% or so from its all-time highs in 2021. you see the stock closing at a new 52-week low. this is not a particularly expensive stock. expected to be profitable on a gap basis, trading 21 times next year's adjusted, and trading a little over one time sales. what's going on here? we have, again, i go back to the nasdaq being up 30% and the nasdaq 100% up 40%. i think we know where the heavy lifting is. i think it's important to look under the hood. this is a perfectly fine company

that trades at a reasonable valuation. this is supposedly really innovative, and it trades like death. all right, in the meantime, we've got more news coming out of the uaw strikes. gm's plant in kansas city, kansas, is going idle today. earlier strikes at a different plan in missouri delayed the delivery of critical parts used in production. this adding to the tension between unions and their industries. in august alone, more than 4 million days of work -- 4 million -- were lost due to work stoppages, according to the b bureau of labor statistics. let's bring in michael strain, the director of economic policy studies at the american enterprise institute. michael, 4 million, that's a lot of work days lost. what does it mean for the broader economy? >> it's a lot of work days. and it's a consequence of the fact that employers have a

voracious demand for workers. labor demand is off the charts, and there just aren't enough workers to satisfy that demand. and so, workers are in the driver's seat to a larger extent than they have been in decades. they are demanding more from their employers, demanding more workplace amenities, more control over the structure of their jobs, and as labor demand starts to cool off those dynamics are going to reset a little bit, and we're seeing -- we're seeing that kind of volatility in the relationship between workers and employers. >> michael, i want more pay and less work hours in a day, and better benefits, as well. >> good luck. >> do i have the leverage right now? what is it about the industrial companies that makes you feel as though they may or may not get what they want from gm, stellantis and ford? >> yeah, so, i think we're seeing this throughout the labor

market. the -- the statistic that i would focus on is average wage growth. wage growth for the average worker. before the pandemic in the kind of great economy of 2018 and 2019, wages were growing at around a 3% pace. after the pandemic, when employers needed workers and there just weren't the workers there, wage growth went up to about 5%. now, we're kind of back into 4%, so -- the labor market is cooling off, but it's still much hotter, and workers are still in the driver's seat, much more than they even were in 2018 or 2019. this is 'em boldening the labor movement. this is emboldening labor organizers and labor unions. what you're seeing in this specific instance is the uaw asking for some pretty unreasonable -- some pretty unreasonable demands. 40% increase in pay, 20% shorter work week. return to some, you know, old

economy types of workplace amen amenities. i don't know that the auto companies can give them what they want without going bankrupt. >> michael, let's talk about then the walmarts of the world. i kind of feel like, when i think about minimum wage and restaurant jobs and what walmart -- walmart is the ultimate strike buster. they can dictate price and when they were pushing up wages for their workers, it was a great thing for our country, when you think about the middle class needing to make a working wage. but isn't that a lot more important, in terms of the inflationary forces in the labor market? because that's where you've seen the biggest surge and maybe where we deserved it, as opposed to the unions. >> yeah, i mean, look. if everybody in the economy got a 40% raise, which is what the uaw wants, that would be hugely inflationary. if you look at the services sector of the economy that you're describing, there, you're seeing even faster wage growth.

the wage growth that we've seen since the pandemic has accrued to those lower wage workers. and so, the low wage services sector has seen faster wage growth than the average, even though the average has seen, you know, much faster wage growth than prior to the pandemic. and that's the -- that's the segment of the economy, i think, that the fed is most concerned about. we've seen goods -- the price of goods, inflation for -- and the goods market, totally under control, even deflationary in some months. inflation in kind of the higher wage services sector of the economy is, you know, relatively under control in the labor market. it's that low wage services sector, where wages are still really hot, and where the relationship between wage inflation and price inflation is the strongest, that the fed is focusing on, i think appropriately. >> all right, michael strain with the economic impact of those labor shortages, thank you very much.

let's trade this, guys. what do we think? is it autos? is it walmart, amazon? i mean, let's talk about -- >> walmart recently made an all-time high and walmart wins in this environment, i think. it don't think it's coincidence they're making an all-time high while dollar gen, dollar tree, are making multiyear lows. in terms of workers, they're getting screwed by inflation. i mean, they want to get paid more. why? because they can't afford to live where they're living. they can't afford to put food on their tables. inflation is hurting people. they watch this show, say, what are you talking about, 3%, probably closer to 10%, and by the way, they happen to be right. so, it's the inflation that the fed was begging for for years, the reason why all these people are basically picketing right now. >> all right, guys, coming up on the show, a pattern developing in pinterest. the stock's move caught one of our trader's eyes. what they're seeing and if you should pin this to your portfolio. get what i did there? plus, a big boost for big blue. why one analyst is seeing more upside for this old and

seemingly stodgy tech name. stick around for that and more when "fast money" returns after this. by automating tasks. when you watsonx your business, you can build digital skills to help human resources spend less time generating offer letters, writing job reqs, and managing schedules... and spend more time on humans. let's create more time for your business ...with watsonx orchestrate. ibm. let's create.

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wall street liking some comments from company executives who are forecasting a pickup in growth there. cnbc's own julia boorstin has more details on why people are pinning pinterest. julia? >> they are pinning pinterest, indeed, dom. pinterest shares gaining 3% today after adding 3% yesterday. the company hosted its first ever investor day, and the ceo forecast mid to high teen p percentage revenue growth over the next three to five years. he forecasted expanding margins. all of that news prompting two upgrades and price target hikes. citi says, quote, it is confident that engagement can continue to ramp, that ads innovation and its full-funnel approach to eadvertising can deliver improving monty section tr trends. increasing engagement on the platform, two, improving monetization around the world, and also three, sustaining financial discipline. so, what's driving a lot of this

potential for pinterest are new ad tools that are directly tied to e-commerce, which, of course, helps brands more directly drive sales. dom? >> all right, julia boorstin with the state of play on pinterest, thank you. let's trade it, folks. who likes it? who doesn't? >> i have a pinterest page. >> you do, recipes on there? >> i do everything. >> got that puppet, that sock puppet. >> sock puppets. >> dog one? pets.com? >> nice picture of karen there. >> right there. >> are you wearing the same outfit? >> no, that's different. >> melissa lee. look at tim. >> there's some hawaiian tropic on there. >> can i -- >> i'm going to bring this back to the stock market. >> yeah. >> go ahead. but i'm looking at my page. >> you remember in 2021 when paypal had a greater market bank -- >> then every bank in america. >> and they might buy pinterest, we thought it was silly -- >> stock's never recovered. >> the stock was a $16 billion enterprise value with sales

expected to go from high single digits to high teens or something like that with improving margins. wall smart should buy these guys tomorrow. did you see what happened with amazon and their operating margins that they had in the retail space? and you look at their surging advertising business they have and everything like that? walmart is at an all-time high, as guy just told us. they should be buying this company. in my opinion, because think about this. if you are the ultimate, you know what i mean? they have made acquisitions, they bought, what was that one, they bought -- >> jet.com or something like that. >> moose jaw. bonobos. >> we might see some strategic m&a come back. >> look, this company is a very different investment than a lot of companies that seemingly were investor stocks from the go-go days of '20 and '21. this is a company that makes money. this is not expensive on valuation. dan's point is well taken, at least by me. i just think -- they had an investor day, they're talking about innovation, talking about new products. nobody says negative things at their investor day. this stock -- the chart,

actually, has been working its way well off of those lows for the last almost year and a half. >> i just -- every time pinterest buy recommendation comes up, i think meta is so much better. they are trying to get to where meta's margins are, significantly bigger, and yet meta trades at a much cheaper multiple. >> activist investor. this stock hasn't since elliott announced that stake, year and a half or so ago, ish, i think, stock just continues to grind higher. valuation's okay. if dan puts his little merger and acquisition banker hat on, maybe you get a chop of that deal. >> calling people. >> all of these companies, instagram, snap, pinterest, they all have a slice of a demo, right? and walmart's demo might actually be closer to pinterest these days. >> call dom. >> there you go. >> explains why guy's there. >> coming up on the show, big blue is seeing some green out there. find out why shares of ibm are topping the tape in today's trade. we've got those details coming up on "fast money." and here's a sneak peek, by

the way, at the cramer cam, because jim is chatting exclusively with the ceo of wingstop, who is hungry now? catch that full interview at the top of the hour on "mad money." "fast money" is back in two minutes.

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welcome back to "fast money." shares of ibm are topping the tape after rbc capital initiated the stock with an outperform rating, and slapped a $188 target price on it. analysts saying the company software business is misunderstood and under valued. ibm still the broader market this year, still underperforming this year, but it says it is at the highest price of 2023, says the chart, guy. big blue, does it have better days ahead? >> it does. we've been talking about the old tech world. what do they call it when you put letters together -- >> acronym. >> words? >> hold anon a second. >> putting letters together? >> cnbc, long titles like senior executive bad ass producer --

well, the i in his acronym i ibm. >> i like it. finally red hat is starting to pay dividends for them. you can wrap your head around valuation. and there's a reason why old tech has been doing well over the last couple weeks. it's about valuation. >> is it about valuation anywhere else in big tech, guys? anything else you like? >> cisco is the best price mega cap tech stock who i think is in an area in software and security that they actually have pricing power, and they have margins, so -- >> this bizarro show. dell has broke out. >> all right, guys, meantime, shares of intel, semisonic, there's one -- >> yeah, closing time. >> shares of intel getting crunched. shares down 10% over the past week, but options traders are betting there could be a turnaround for intel. kelly intelligence ceo kevin kelly joining us with the action, the options action.

kevin? >> hi, dom. yeah, today, we actually saw 1 pntd 3 times the amount of calls versus puts in intel, and this is a stock that has a -- implied volatility of about 34. and today, we saw the most active contracts actually took us all the way out to december, and they went to the 38 strike calls, which is almost about 10% higher here and we saw over 18,000 contracts trade in that strike, so it closed today around 123, so, there could be a santa santa claus rally for the options betters in intel. >> so, i'm long intel. i don't think there was anything delivered in the last 48 hours that really changes the investment this year. it's nice they are bringing something forth in a.i. you're not buying the stock for a.i. you are buying it on a turnaround, valuation makes sense, they have support. some of the products they announced are interesting. i think the data center erosion is something they put the floor underneath. >> it is interesting, though,

kind of like a dash or trash, that narrative kind of worked its way into intel. intel's misexecuted on almost every shift over the last five years, so, it's easy to buy a stock like this cheap, but look at amd. they were trading 130 in june and here we are now, just above $100 or so, and that had a little bit of that nvidia pixie dust may into june. a lot of those names, when the runner hits the road, if they don't have the actual product and they don't have an advance in the technology, you know, to me, i think the investors will sniff it out. all right, kevin, by the way, thank you for those trades there. for more "options action," be sure to tune into the full show on fridays, 5:30 p.m. eastern time, right here on cnbc. coming up next, it's your final trades. keep it right here. good luck. td ameritrade, this is anna.

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the network more businesses choose. transplant received. at&t business. ♪ is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines. all right, time for final trades. tim first. >> it's been awhile since we talked about the negotiations with the drug companies. some of that overrun in the short run. america. >> all right, karen? >> yeah, thanks for being here, dom, happy birthday, dan.

>> one-year treasury. >> dan? >> qqq. >> all right, and guy? >> karen carpenter, top five vocalist of all-time. tim? >> drummers? >> that, as well. gdx. >> you missed a conversation in the commercial break. that does it for us here on "fast money." "mad money" with jim cramer starts right now. here on "fast money." "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 is 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 save you a little money. my job is not just to educate, but to put this into context. so call me at 1-800-743-cnbc. tweet me @jimcramer. let's face it. there is a considerable number of knuckleheads out there who simply won't be sa