the day higher and we get a flurry of earnings before and after the bell tonight, including netflix after the bell, united airlinesafter the bell a name that i'm going to be watching in the morning, which is lockheed martin >> we talked about google being lower today on the -- i would also me also mention microsoft was up a percent. >> "fast money" starts now. right now on "fast," fears building on the $20 trillion commercial real estate market, with office space in major cities sitting 'em te. the economy slowing and prices for many rates getting rocked. is the sector so bad it's good plus, shares of alphabet down what could of dent would that have and later, merck's bio tech buy. and netflix chilled ahead of tomorrow's results i'm melissa lee.

this is fm li"fast money," live the nasdaq market site we start off with the trade that made us go hmm someone on this desk tipping their toe in the much beaten down office space. vornado realty and boston properties, both were up today, but lost more than 20% in 2023 the two worst performing reits in the sector. so, karen -- >> yes >> what sparked your interest in these two? >> well, just the so bad it's good, like, if you thought, where should i short something now? this would come first to mind, right? which makes me think, all right, it must be really crowded. there's a lot to hate. sentiment is terrible. we all know the mack ro interes rates are high, you have debt refinancing coming up, work from home, and you have tech companies laying off tons of people all of that's terrible

and yet, i do feel like maybe it's so bad that it's good i mean, the stocks have absolutely gotten crushed and i think they'll bottom before the actual business turn, so, that's one thing to like about it it's interesting that new money is coming into distressed real estate you had blackstone, i think it was a $20 billion fund, i think double line started two funds. so, that's of interest to me and i think, you know, the sort of -- always think of tim saying, you make the most money when things go from terrible to just bad so, they're deeply enmeshed in terrible right now and i think that the risk/reward here is compelling we know there's debt here, we know that, you know, a lot of bad things, particularly of vornado, which is very new york-centric, that's a bad place to be right now, but the stock has lost a quarter century of value, they're back to where they were 25 years ago, although obviously they have paid dividends all the way along the

way, but i think that here, i'm never going to pick the bottom, but it's starting to get interesting. roth is a super smart guy and he'll come up with something he's got a big stake here, so, all that together -- time to start -- i'm not going to pick the bottom, for sure, but put my toe in the water >> you mentioned the short interest actually the shortest sector in the s&p 500 and the most shorted sub sector is office reits specifically maybe it's time for some sort of a turn >> and i forgot the yield, which may or may not happen. >> good for karen. and karen does her work. and therefore i -- this isn't just throwing a dart and saying, hey this is, why not, it's down a lot, i should probably buy it. i think if you think about new york city real estate, it's no surprise here. and that's well into this price. what's going on with all the office and the dynamics work from home, i think, are in new york city. when you look at this space, you need to look at the underlying and really what you're investing

in if you look at a spg or smin property group, look, blue chip, best properties and certainly in a mall space where a very different dynamic, though some of the same trends have been going on, as well. leaving the malls, going the open air there's a decision cession their element of what's going on simon property, the short interest is, i don't know, less than 2%. it's down small on the year. it pays a nice div, and to me, this is, again, a case where, do they have pricing power, do they not? it just seems to me, it's been an outperformer in a difficult environment. and that's a place i feel safe, again, based upon -- we heard what's going on with the mall over and over again. >> can you have -- let's say there's a really hard recession and there is a crunch lending to commercial real estate in general, can you have a crunch in the bottom tiers of commercial real estate and not have that crunch in the top tier even if it's blue chip >> i'd be very surprised i don't know jack about this sector but i'd be absolutely surprised to see if these stocked bottomed

before we have a recession given the different dynamics that we have right now, and then when you talk about where rates are, cost of capital, you talk about all the debt so, to me, didn't find it that compelling i would rather buy money center banks that were down 15% than this right now >> you don't like those. >> no, i don't >> so, i think -- i think i'm somewhere in the middle on this. between dan and karen. and, you know, tim was more on karen's side the problem is the reset of the loans. how much is coming -- >> well, vornado, i think 2024 is the first major one of their corporate debt. >> yeah. >> but you know, the properties are -- if they default on one, it's not going to take the whole thing down >> the problem is, most of these things don't trade outside -- they trade as a block. so, if 1.6 or 1.5 trillion is being reset over the next year and a half, it will drag the entire space down, guilty by association. so, that is the only reason --

oh, deanfinitively, but stocks n ouls go lower, so, to tim's point, i don't know if picking the bottom is the right thing, i don't think you said that. you -- i don't disagree with that you're getting a yield on it, and all of these names have guided lower so, that's already in the price. and they definitely kitchen sinked last year, because they were all beaten up last year, so, a lot of that is already in the price. >> you know what else is in the price? interest rates the biggest story, and i realize that's part of, you know, the whole fundamental bottom up here, but a loath of this is just an interest rate mov move. some of the biggest moves happened from january of '22, really through kind of the end of last year, and all of that was pricing in lower -- excuse me, higher interest rates, and i they's the story as much as any. i realize that's also a dynamic

of asset allocation. you've seen a lot of people find other places to go get the yield that they were getting from re reits. >> and they took a leg down after svb, as well so, anything financially related did, but i don't nknow, so, a lo of negative things altogether -- it reminds me when oil just got absolutely slaughtered and, remember that contract that went negative and that was sort of the bottom and things were terrible >> it's possible to thread the needle on this trade the problem is, we're going to be talking about commercial real estate resetting for the next six months and it's going to be front and center, so, while i think a lot of it is factor into the names, i think you have to be really quick on this trade. >> so, do you think that we need to see a bottom or the worst is behind us for regional banks in order to have a recovery in any way, shape, or form, in commercial real estate >> i they would help i think that a stabilization of rates would help also.

and if there were any deals that got -- commercial mortgage backed securities are dead right now. you see any deals come in and any properties trade, there are no properties trading in new york anything like that, i think, would be some life >> yeah. but in terms of the crunch that we were talking about before, and if credit really seizes up for the lower tier -- >> it's seized up already. for the -- you know -- >> so, you think it's not going to have any sort of knockdown impact on blue chip properties >> so, bxp, boston properties, is blue chip one vanderbilt, that building is 100% leased, prices are fantastic, i think that's an slg property, among others i think for the b and c and d buildings, it's armageddon >> let's get more on these challenges from uma moriarty great to have you with us. i was reading through a note

earlier today and it said that, you know, office reits don't perform well in a recessionary environment, which is where we are right now, so, will this time be different? >> thanks for having me. and a lot of what you have been talking about with this group of people, right, so far in terms of the impact of the rates, what that has done from a repricing perspective, thinking about the utilization of office as we think about work from home, there are a lot of different factors building into office in addition to a recession. and the reit side, though, we've talked about this, it's been repriced we felt a lot of that pain already come through for publicly traded reits in the office space the important thing to remember, though, as we think about commercial real estate broadly and the reit space broadly, there are so many other areas in commercial real estate, call it industrial, single family rentals, health care, data

centers, a lot of these areas with really fantastic structural demand tailwinds, that will help really offset the impacts of the economic recession so, office is definitely one thing, but we have the other 97% of the commercial real estate space across reits that's really interesting today. >> office seems to have taken it the hardest, uma, the two that karen actually bought small stakes in are the worst performers in the reit sector in the first quarter. so, would you be more inclined to put fresh money into, you know, the source space which has done much better >> so, at p as it relates to the stour storage space, we've seen a different playoff over three-plus years call it since covid. within storage, very different than what you've seen in office. office reits are down 50%, 60%, trading at very deep discounts to their valuations. so, that creates an interesting opportunity for investors that are looking to deploy new

capital today. right, so, if you have the option to deploy that capital across the listed market, where you've been repriced and significantly more derisks from a valuation per speck ty, compared to the private marment, your dollar is much better invesed in that listed reit space. >> uma, thank you for joining us putting it in terms for a guy like me that doesn't spend all day in reits, going back to the factory of, you know, building of a reit and the dynamic around higher interest rates, a lot of these trades just don't work so, think about, forever when rates were at zero, it made a lot of sense to be in a long duration asset, et cetera. how much does this dynamic of rate change just change stru structurally, the return profile of some of these office reits? >> that's something that we've been thinking about a lot here, and i think broadly speaking, you know, our estimate is that we're really past this kind of

free money era that we've been experiencing for the last decade plus it means that you have to reprice real estate for it to make sense in terms of an investment we've seen that happen across the reit space, which means it's a really attractive investment for us, as we think about where prices have been reset you talk about office here, the yield on these properties across these office police report foul owes on average is about 10% when you've got rates on the interest rate side, call it 6%, 7%, that still makes a little bit of sense but on the private market, you're still looking at yield on these properties priced as they are today below 5% and that's where the math kind of stops working. and so, as long as you've got the pricing right in this new rate environment that we're living in, real estate makes a lot of sense and we've seen that happen across the reit space today. >> uma, it's karen thank you for being on let me ask you in terms of sentiment to the space are you seeing any change in, you know, it's been absolutely toxic, don't touch it, but i'm

wondering if you're seeing any change >> great question. and to your point, there has just been so much bad press, right? the headlines all about commercial real estate, how that's such trouble. and that's where we kind of go back to and talk to our clients a lot about what's actually out there in the ghcommercial space especially across reits that are priced in a way that makes them fairly derisked. we're talking about area that have a lot of break that should do really well and that's 97% of the u.s. listed reit space. so, areas like data centers, you think about what's really happening out there, from the s perspective of ai, chatgpt, that requires a ton of computing power. that's going to these data centers. they're seeing pricing power unlike what they've seen in the last 25 years today. and that's a great opportunity so, you're seeing a lot of these areas in the space that wasn't to be cognizant of, want to have exposure to. looking for some of the stability that you get from the

real estate asset class, but in the reit market today at a much better price >> uma, real quickly, you mentioned the private reit market, and i saw chart earlier today showing just kind of the public market what they've done this time, we all know that, that's what we've been talking about. you just mentioned private, and they are not marked to market. is there a potential knockdown effect when the private market stuff gets repriced more in line with the public markets? >> absolutely. you're going to see a couple different impact office that play out, right? so, you're going to see transaction markets finally open up when you have some sort of price discovery on the private market side everybody knows that the assets are valued too high, they need to come down, but you are still seeing a big spread, which means that transactions are pretty much at a standstill so, until you start to see some of that price discovery happen in the private market, you're not really going to see a lot of movement from a capital perspective, but there is so much capital waiting on the sidelines to be deployed today

across the real estate space so, once we see that discovery happen in the market, a lot of that capital is going to come into the space and provide a little bit of support from the perspective of valuations. >> uma, thank you. appreciate it. so, why did reits really today because regional banks were up today? because the banking sector was up today >> interest rates have been higher, i mean, there's some sense that we're seeing the yield curve stabilize a little bit. and that pricing discovery dynamic. it is fascinating to think about tons and a wall of money sitting on the sidelines waiting to deploy we hear this in vc, it seems like it is a different world. coming up, a search switch shars off alphabet dropping what it could mean next. plus, a fired up bio tech deal, merck swapping up one name for $11 billion, and the heads

of both companies are weighing in on the deal so, what did they say? we'll have that when "fast money" returns back in two. do you ever worry we'll live forever? no, it's literally never crossed my mind. what if we live to like 100? that's 35 years of being retired. i don't want to outlive our money. and i have been eating all these stupid chia seeds! i could totally live to be 100! why do i keep taking such good care of my- since we started working with empower, we're able to get all our financial questions answered, so we don't have to worry. so you never- no. never. join 17 million people and take control of your financial future to empower what's next. start today at empower.com

welcome back to "fast money. buzz kill on alphabet. shares dropping more than 2% on a "new york times" report that samsung is considering switching its default mobile search engine from google to microsoft's bing. alphabet seeing its worst day in two months steve kovach has the details >> yeah, mel, alphabet did fall today, saying that samsung thought about changing the default search engines to bing from google, after seeing microsoft's chat bot in action that set up a scramble within google to get its own chat bot integrated into google search. here's how the deals work, mel google shares search ad revenue with companies if they make google the default search engine and it's a lucrative business, too. apple reportedly gets about $20 billion a year from google, making up a big chunk of its services business. samsu samsung gets to be a few billion a year the notion there's a better alternative out there gives more

leverage to companies like s samsung and apple to negotiate better terms or google risks losing position to microsoft that means more upside for the platforms and more costs for google it's still early google has said it plans to integrate bard into google search and if it can pull that off, it may be able to stave off its dominance in search. >> steve, you used the word scramble is that your word or is that a word from "the new york times" it reminds me of when they were scrambling to get bard and launch that. >> it's the same scramble. it reminded me of whatwe heard several months ago when everyone was talking about chatgpt and sergei and larry, the founders of the company had to come in and say, we need to get on this. that's part of the scramble. >> steve, thank you. >> you got it. >> steve kovach. karen, you watched the interview on "60 minutes." how much of that is part of this move lower

>> it wasn't great i mean, i also was wondering, you know, just the way the bard introduction was sort of a flop, if you went back and looked at the chatgpt/bing one, it wasn't so great, either i was surprised how seemingly nonchalant he seemed about, wow, could this really spin out of control? you know, do we even know what the implications of this technology is? and he didn't seem to have great answers for that i wonder if it was edited in a way that doesn't so flattering to him he didn't do a great job, i felt, in that interview, which is too bad and then on top of that, the samsung news, though the dollars aren't that much, it's this idea of the impen trablt of google's, you know, moat >> and perception is reality they were thought to be the king of the hill on top of it that's why the bard flop was so surprising to me, because they're usually so ready for every task

and i think it really casts disper shuns on them that maybe they are not as good as people think they are >> you know, so, i kind of agree with both of what you're saying. i think about this as sam sung is less than 3 billion in terms of revs for google apple is -- so, if you've now cast some shadow over how impenetrable google is, apple's the one you worry about. apple is worth $20 billion in revenue to them. their traffic acquisition costs have been going down and a very good trend for them, especially because of mobile, apple controls the shots here, as they do in so many places, by the way. a topic for another show, but it's one of the reasons why, i think, apple is -- gets into an anti-monopoly territory, because they are so dominant for so many different people, they can do whatever they want if they wanted to get into this business themselves, you know, and i don't think they're going to, but apple, i worry about, even though maybe you don't have to worry about it, because samsung is not that big of a

deal >> maybe this is more of a microsoft story. if microsoft captured a tiny increment of google search, it's just additional revenue. >> they already have microsoft -- google stock has no ai in it >> right >> microsoft, i think, is a lot. >> yeah, i think that's a great point. i think we talked about it around the edges, it would be great for microsoft. but as far as google is concerned, here's the bigger issue. in 2015, they had 70% gross margins. they are expected to have 60%. you talk about moats, monopolies, it's been chipped at for awhile now could you see further margin degree regame if they start losing pricing power now that you have a good -- even if you don't think you would even use them, why wouldn't you go and try to make that threat, you know what i mean to me, that's the issue with google and a lot of you guys will say, it's really cheap relative to the megacaps, it is traded 20

times this year, 17 times next if those margins remain under pressure, it's going to look expensive quickly. >> but maybe the big takeaway is how important artificial intelligence is. that's what this decision was probably made on and things don't happen in 30 seconds this was on the basis of bard, the bard flop, and now we're seeing companies, company by company, starting to factor in how much artificial intelligence actually has the finger on the scale. it's not ready for prime time yet, but certainly it's entered into the calculus of these corporations >> all right, a lot more "fast money" to come here's what's coming up next merck making moves the drug maker scooping up one bio tech name, and the news has shares skyrocketing what the ceos are saying about the deal, next plus, can stocks look past an economic downturn our next guest ready to tell us how the markets can turn a blind

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yeah. the more we understand you, the better we can help you. that's what u.s. bank is for. huge relief. yeah... ♪ welcome back to "fast money. a drug deal on wall street well, a pharma deal, at least. merck buying prometheus io science sciences here's what the ceos had to say about the merger >> one of the things that really attracted us to prometheus was the fact they had the 360 bio bank and just to give a sense of what this is, it's basically over 200,000 tissue samples across 20,000 patients who have suffered from ibd, and it allows

you to look at the genetics and match the genetic markers to the disease, which allows us to do better jobs of picking patients and driving how we prioritize and ultimately study and bring new therapies forward. >> of cbe sure to catch the ful interview, top of the hour, on "mad money." let's trade it what he said, when the merck ceo said the reason we're looking at this, i thought he was going to say, because key true da loses patent protection in 2028. >> that's the honest truth and they're 43%, i think, is the exact number that they're levered to revenues as far as they're dependent on them. and they're segueing away from that key true da is the gold line that is losing the patent protection the real take away is the xpi. now you're going to see -- we hear about the marquee deals we don't hear about the little deals that will be tucked in along the way. i think this shines a light on that i would be a buyer of that

>> yeah, it's funny, key true da was another one of those acquisitions that people thought was way overpaid by merck. and it paid for itself and i hear you, and they have to replace an asset, so here they go i don't think anybody doesn't question that it's not a great asset and a great area of growth to be in, but the question is, how much did they pay? and at what point -- merck, which certainly trades at a premium to some of the other big cap pharma peers, i'm long merck, i'm very happy, but i think that's the dynamic did they pay too much? that's the only criticism here and in the past, a couple of these acquisitions have proven to not be, you know, the thing that was taking them down was the price and proved to be fine. >> you're okay with the price? >> yeah, what do i say >> they don't have any approved drugs. this is a -- >> but it's -- i mean, merck is almost a $300 billion company, so $11 billion deal -- how badly could they

merck, which i own also, started when the pe was really low, it's actually appreciated quite a bit now. this, i don't think, changes the calculus for me, at the moment i don't know what to make of it. coming up, the nitty-gritty on netflix results due out after the bell tomorrow, but is this name still a good place to invest but first, can stocks ignore a recession? it's happened once before. lori calvasina will join us when "fast money" returns. get your trades to go with the "fast money" podcast catch us any time, anywhere. follow today on your favorite podcasting app we're back right after this. what if you could make analyzing a big bank's data... no big deal? go on... well, what if you partner with ibm and red hat, use a hybrid cloud solution to connect data across multiple systems globally, then analyze all that data with watson. okay, but this needs to meet our...

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welcome back to "fast money. another check on the markets today. stocks staging a late-day rally with major indices ending the day in the green in nordstrom, shares jumping as much as 7% on news that a former nike exec is joining the company's board. and afterhours, watching jb hunt dropping after the company missed on the bottom line.

what did you make of this nordstrom jump, karen? >> it seems good, right, this is someone who clearly has great retailing experience is it enough to change the whole dynamic? i don't think so >> come on i mean -- >> dismissive, tim >> as someone that's been happy to trade in department stores, macy's, specifically, but part of it really is just a misperception about what the valuation is and even solvency, in the case of some of these names. i don't think you can have a miracle that changes it. >> what did you think of the market action overall? >> i hated it. >> shocker >> wait a minute, you hated something? >> i was doing something, i look away, then i look up -- >> same. >> i'll say this the high of the year, 4195, we've been in this range it really doesn't feel -- given what we saw on friday out of the banks, the way that jpmorgan reacted, i really feel like, if we can't have a string of groups

that really outperform expectations, i don't really see the s&p breaking out in a m meaningful way >> it has to be in the technology space everything else can't lift enough >> they are underperforming. if you look at the qs and the semis, they are underperforming the s&p. to me, that's something you have to be watching as someone that has believed as long as they are outperforming the s&p, you are owning the market the opposite is true >> do the banks sound the all clear? >> tomorrow, bank of america, which is a very big one, for sure i think, though, jpmorgan quarter -- i think anyone's going to be hard pressed to have a better quarter than that >> doesn't that make you nervous? jpmorgan, expectations were low, it sold off a lot. it goes up 7%, 8% in a straight line on one piece of news and it kind of doctor. >> more than one >> fine, but -- if we can all agree that the economy probably doesn't get better from here over the next six months

that would be -- i don't know -- >> you think there's a drinking game, when you're negative, someone takes a drink? that would be a great -- >> listen, most people are always positive, so, you know -- >> fair. >> the way i'm thinking about it is, i just don't see a lot of what we're seeing is relative to expectations, right? >> and you're saying bank of america's expectations are higher >> what i'm saying, is who cares? three months from now, if we see tighter credit conditions, if we see rates stay high, if s stagflationary environment, if we see unemployment ticking up, just not going to be a good environment, and i think that the banks might have shown you as good as it gets for 2023. >> all right, stock market right now might be ignoring all warnings of a recession, according to our next guest, that's not the first time it's happened lori is here on set. this goes perfectly into the question that prompted you to write the note, and that is, has the stock market ever priced in

a recession before it's happened >> right, and we've been getting that question from investors who are frankly, i think sort of feel like dan that are looking at the market action and saying, why are we higher? what's the bull case and we walk people through what we think the bull case is, but then people say, okay, fine, but we haven't even seen the recession start. so, how can we have possibly priced it in and we've gone back and said it would be odd, but there is some precedent for it, if you look at the history books. if you go all the way back to 1945, that was the recession coming out of world war ii stock market just marched through. the only recession where it's essentially been ignored and i think there are a lot of differents between today and that time period, but there are some similarities, as well >> so, that's the only instance? >> that's all you got? >> not convincing to me if it's one instance and there are notable differences between that period and this period >> well, i think what's interesting is, people say, we've never done this -- well, we have done something kind of similar. and the thing that's similar is

that you had this massive decline in the market ahead of it, a 43% drop early on in the war, and after you had the mid war bottom, you saw a 13% drawdown in 1943, the recession was not until 1945 and when i was researching this, i actually found some interesting terms that were similar. it was described as a technical recession, just being driven by the fact that the wartime economy was shutting downpithine economy. the idea of a manufacturing recession, that we all talked about last year, we had that back then. >> covid what are we calling that that was so much like a war economy, if you think about it >> yeah, but we flew $6 trillion at it. and that's why we had a rip roaring market in 2021 and 2022. look where inflation has gone and stay elevated. look at the prior ten years that we had gdp to the pandemic, we averaged 2.2%. and we are not likely to get above that and rates are going to reset higher i don't see anything about that comparison that makes any sense, given where we are right now

and the pandemic really -- looking at me. why are you looking at me like that >> oscar the grouch. >> the spending, though, if you go back again to this 1945 example, you had massive government resources that fueled the wartime machine, and that was pulled back in a hurry we are kind of doing something similar this time around, on the fiscal and monetary side also, unemployment managed to stay very strong back then and that's kind of the other head scratcher in this environment. how in the world has it stayed so strong? >> yeah, you don't really believe that you're just playing devil's advocate -- >> i actually think we priced in a recession back at the october lows, but i think people are tired of hearing that and i had to have something else to talk about, frankly, and it's -- you know, the idea that, you know, people kept saying, we've never done this -- we've done something -- >> so, why would they have priced it in this time that may be right, in other words -- everyone is saying, get me back to 3600, i'm a buyer

with twoenedhands -- why would have priced it in when it's the same question, we haven't done this before? i hear you, and this time feels so different on so many different vectors. we haven't seen the fed hike this aggressively, we haven't come out of the place where the economy was waking up, but again, why would we do that now? >> we did it back in october if you think about what was driving us to those october lows, it was, oh, my god, the fed is tightening, we're going to have to have a recession. it was literally the fed and fears of the fed causing a recession that drove us to that point. the other thing we saw was over the summer, the small caps were banking on a recession they were banking on an ism down around 39. and valuations were literally at the rock bottom of the historical range so, if you look through that lens first, it makes a little bit more sense that the s&p just had to catch up to where the russell was over the summer. >> given all this, you're not, like, a screaming bull here? >> no no 4100 target.

and i see plenty of challenges i think we continue to be worried about the debt ceiling causing some dra that. we think the market is looking ahead to a 2024 recovery we think that's going to the debated. my colleagues think the conversation about terminal isn't dead i'm kind of getting accused of being a bull by default. >> she wrote that just to stir dan up >> by the way, the russell still stinks literally. i'm looking at this -- the russell 2,000, small caps act like death >> they are. but you know, the banks are starting to show some stabilization in performance, they're trying -- if the banks can stabilize, the small caps will stabilize, as well. initially it was bio techs whipping it around, now it's the banks. >> lori, thank you what do you think?

>> so, i could see the event in october pricing in the recession, even if we weren't calling it a recession if people were looking for 220 in s&p earnings, you took it down from the peak, you took it down to 180 in the s&p and you slap a 20 times multiple on that, that will get you to that 3600 level, because if you're looking at where interest rates were and where they're going, you put -- what are we todaying, 18 1/2, 19 times now, you put a 20 on a lower rate environment going forward, as rates come in, you put a higher multiple on it, so, i can see that, i can see that maybe we priced it in and to lori's point, we were talking about an earnings recession. when tim asked her, why would we have done that, because the conversation was about an earnings recession going forward, so, everyone racheted down their estimates on the s&p. so, i think right now, we're probably at 200 in the s&p, going forward. and i think we're probably there. >> yeah. i mean, that's what lori's estimates were for this year

we rationed expectations down 6% in terms of earnings >> we haven't seen the job market change. and the best days of the job market are behind us until the consumer stops having a job, i think earnings are going to be okay the fed has two man dates. they are trying to knock down the labor market and they really only begun to start, so, whether they overshoot it, either way, i think the labor market is the key. coming up, going green and seeing green taking a look at one under the radar sector that is building gains. yep, that was a clue we'll bring you the details in the trades ahead. but first, netflix on deck which direction will the stock be streaming we'll hit the options pits next. stick around more "fast money" in two

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show free cash flow and operating income so, the expectation is they are going to do a billion sixish, and i think that's it. they're actually -- the one thing that's always been a constant for netflix, even when people are questioning subs and saturation and what not was that their pipeline, their content was very strong. there's been some slightly weaker metrics coming out on their top ten, and some of the engagement, but i think it really gets back to our -- is this company making money? and i think they're being rewarded for it in a way that others in the streaming space cannot i think the expectations on subs is high. and i think it's a pretty decent hurdle to clear. >> yeah, the last quarter was so good, i think expectations are high, so, i am long. it's not a huge position i'm a little nervous that expectations are high and they have to do even better to clear that bar and -- it's cheaper than it was for sure, but it's not absolutely cheap >> right tomorrow's results stirring up action in the options pits, as well mike khouw has the details

>> yeah, the options market implying a move of 9% higher or lower for the week it seems that some traders are betting that they're actually going to three-peat, looking for much bigger moves, much like the ones we saw over the last two reported quarters. the most active contract were the april 382 1/2 calls. we saw over 10,000 of those trade for just under two bucks a contract buyers of those calls are betting the stock could be 15% higher or more this week >> all right, thank you, mike. for more options action, tune in friday, 5:30 p.m. eastern time. coming up, president biden unlocking billions of dollars of potential in one area of the economy. we'll bring you the under the radar boom and how to play it next back right after this.

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welcome back to "fast money. clean energy jobs and electric vehicle push have been key areas of focus in the inflation reduction act, but tens of billions of dollars in incentives are on the table for the building sector and green-focused companies are

poised to benefit. >> probably not the first thing that comes to mind when you think about who benefits from the inflation reduction act and the sum $370 billion it earmarks for green initiatives, but buildings are roughly 40% of the u.s.'s total energy consumption, so, it is a key focus. the climate bill contains incentives for better insulated homes, since that cuts energy demand now, in terms of who benefits, companies like trane and carrier global make hvac systems, while material companies like installed building and topbuild could see an increase in demand for insulation more broadly, the energy efficiency push means heightened focus on building management systems. honeywell, johnson controls and schneider electricer products that help occupants and

manage their energy needs. melissa? back to you. >> pippa, thank you. tim, you in some of these names? >> trane and i -- some of them have been great long-term holdings, because a couple of these in that space, which are also in your home builders etf have performed over a couple years. if you look at some of those names, they really fell when you had this run at silicon value bea lank, which is kind of strange. i can't really speak to what they're doing on the green side, i can certainly speak to the efficiency of the business and the margins they're performing at, and it's not expensive in a world where we had a lot of pressure on these companies, i think this is weakness you're buying >> karen >> i've always sort of liked the industrial space and so, i don't know, i don't own any of the names listed there, but i -- i do own home depot and lowe's, they're all related, but i don't own these, kind of thinking maybe i should >> i feel like when you start

buying things on a premises, i had a premise on the in infrastructure deal cutting checks for caterpillar, we haven't seen that come through positively in thequity price in the stock i do like, as far as the charts, me si specifically, trane looks like the best name. >> the investment in trane, is the ira a booster to this trade that you already like? >> i wouldn't be putting that in something that would make me excited to buy it. but again, if it's esg, if it's things that have been ind inducements to buy companies, i don't think so that's not how i'm investing >> all right, coming up next, final trades

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we are now in the thick of earnings season. we've got a lot on tap tomorrow. and tomorrow we're going to get a big read on a lot of the banks. we've got goldman sachs, bank o america. a lot of the regionals will report, too. karen, you are focused on bank of america, i presume?

>> that's right. i don't think they're going to have as good net interest margin beat as jpmorgan, probably by a wide margin, but still, it's not expensive and we'll really get a sense of how they feel about the com economy and the consumer >> do you think it's going to be anything different than what jamie dimon said think they have similar exposures, but what we're not going to hear that from is goldman sachs and morgan stanley. and that's great because, in fact, these are businesses, we know what happened to investment banking, we know it lagged. but they don't have the same net interest income exposure and yet they were sold off as if they did so, we -- i think it's been flagged. i think they're both worth owning into these numbers. >> 1695. that's where the vics closed, people >> that's crazy. >> buy whatever you want >> drink >> have at it. >> why do you think it was sosh the that's so complacent

>> yeah. you know what complacency breeds >> until we see the regionals start to report, the big money center banks are one thing, when we see the regionals start to get their sea legs back, the market will not have an all-clear, but a better clear sign >> were you going to say something -- >> 1695, i mean, it's -- the pain trade, the dynamic here is, that's the whole point the market is so positioned for pain that the vics is sliding lower, because that's how people have access to this thing. >> final trade steve? >> xbi starting to see a lot of light showing on these small bio tech companies. they've bin ignored. it's been a covid environment and now i think they're going to get their day. >> karen >> yes two things happy birthday kate and william and congratulations to my sister running the boston marathon. tip a toe in the water, i did, on boston properties, a-team >> dan

>> 1695 makes the puts look really cheap they are >> tim >> merck not cheap relative to peers, but i like it here and i'm long. >> thank you for watching "fast money. be back here tomorrow at 5:00. don't go anywhere. "mad money" with jim cramer starts right now ♪ my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere, i promise to help you find it. "mad money" starts now hey, i'm cramer, welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to save you money. call me at 1-800-743-cnbc. talking nasdaq