time. what is your favorite show on this network? >> "last call," clearly. i get -- there's consequences if you don't answer -- >> somebody clip that. we have a big show. tom lee, asking about rate cuts, asking about small caps. >> we're on "overtime," phil. >> i'm going to see you in two hours. see you here tomorrow. now to melissa and her unruly crew on "fast money." >> i thought we were contessa's favorite. live from the nasdaq market site in the heart of new york city's times square, this is "fast money." here's what's on tap tonight. rate shock. yields jumping on the hotter than expected inflation data. the two-year closing in on a five handle and today's moves signaling the fed will rethink rate cuts for the rest of the year? we'll debate that. plus, the real estate sector taking it on the chin. small caps struggling to find their footing. we'll go inside the numbers coming up. and theoptions action in the regional banks. new private company etf taking wall street by storm. and bucking the trend.

stock moves catching our traders' eyes in today's volatile market. i'm melissa lee, coming to you live from studio b at the nasdaq. on the desk tonight -- tim seymour, karen finerman, dan nathan, and guy adami. and we start off with the major market moves after yet another hot inflation report. the yield on two-year treasuries spiking toward the 5% mark for the first time since last november. 22 basis point move today, the biggest since march of last year. stocks solidly in the red, though off the lows of the day. the dow shedding more than 420 points, seventh day of losses in the last eight sessions. it is now down over 3.5% from the record hit just last month. take a look at the drops in some of the most rate sensitive sectors. reen regional banks sinking 5%. builders dropping below their 50-day moving average for the first time since november. and small caps now negative once again for the year. all this as the latest cpi report showed consumer prices rose 3.5% from a year ago, the third straight month of higher than expected results.

that print seemed to squash hopes for fed rate cut any time soon. chances of a cut in june plunging from nearly 60% before the report to 17% now and the probability of no cuts at all this year went from just 2% to 13% now. we've been talking about the stickiness of inflation for some time. what this could mean for the fed. guy, you especially have been on this. >> well, we're seeing it m manifest in a lot of different things now. ten-year yields now, closer to the recent highs now, after today, than the recent lows of 3.8%, which should be somewhat disconcerts, i think. when you see moves of this magnitude, that is alarming. tim's been talking about this, as well. i still think yields continue to go higher from here. maybe today was the day where the market finally woke up to the fact that yields going higher is not for a good thing. but amongst the many things that stuck out to me today, look at the volatility in the volatility index today. i mean, it was not just a

straight line up and stay there, this was a lower -- north of 16 1/2, below 15 1/2, i mean, volatility is volatile again, which, i think also should be somewhat alarming to people out there. >> we talked about it yesterday, a lot about, all right, what if it comes in a little hot, which it came in a little hot. sort of not -- it's sort of the price action you would expect to have. it did feel like a little bit more scary, a little bit. this, you know, going down 422 points is actually not that big of a deal if you step back and look how far it's come. it's just the question of, oh, wow, is it really so we're not going to get so many rate cuts this year? which we've been talking about for a long time, seemed kind of absurd, the start with six, and now, i don't know, are we at two, one, somewhere in between that, i think. but interesting to me -- i like the iwm, i thought we'd broaden out, that did not happen. surprising to me, the magnificent four, seven, did pretty well today, right?

most of them in the green, or very slightly in the red. and that was sort of surprising to me that that would be a place that people would still feel comfortable, as opposed to, oh, wow, i made so much money in this space, here's a warning shot, maybe i should sell some. that didn't happen. >> but this is data that shows the economy is still good. we're still roaring, and wasn't that sort of the argument behind, you know, if we get hot numbers, it shows we're in a good place and we can continue to grow even with this sort of restrictive territory that the fed says we're in. >> i think we can. and i'm not surprised the megacap tech, those that aren't wounded in some way, but the ones that, you know, the three or four that are left, are moving higher in a higher rate environment, because they have the earnings power, they are certainly less tied to inflation. the dynamic of where, yes, core services were the culprit today on that cpi number. what that means, it's not one, it's not two, it's three cpis. so, the jury is certainly, you

know, not out, at all. it's very clear what's going on. i think we know that the fed has to be on hold, it's probably september. there's different ways you can be kind of starting to game this. but i look at other things that are also good and bad for the economy. the fact that energy is higher, the fact that commodities are generally higher, these are things that are probably not helping the fed or the consumer. and i think the view here is that a little bit of a headwind into financial conditions is probably good news for the fed. no matter what happens here is if we start to see the stock market sell off and we start to get a little bit more inflation around us, i think you're going to see the impact that actually has on rates. i think rates will go higher. they could start to go lower before they then go higher. but that's probably, you know, i'm playing three, six-month tactical game here. i think right now, it does feel like rates can hold this level. remember, the high of rates was about 5% in mid october. think of the move the market had as rates came down. i think we've all said, equities probably wake up one day and we

don't know what that day is, but we said a week ago, that vix, we talked about that day you shot up over 15, and i think volatility is now in the hands of the market. >> it's funny. i've said this a few times, what's going on in the markets, across risk assets in general feels a lot like late 2021. this is a period when the fed said, to battle inflation, they're going to raise interest rates. we go into 2022 and they take fed funds from basically, you know, half a percent to 4.5%, and we have a stock market that fairly orderly sells off, let's say 20% or so. last year, when folks start pricing in the fact that basically they're pretty much done, they did get from 4.5% to the upper band at 5.5%, off to the races here. there was some additiona al liquidity added to the market. so, i bring it back to where we are right now. things feel similar in many ways to me, and it was the last bastion, you just mentioned the

fab four that saw money flows into them today. they were green on the day. so, that reminds me a little bit of late 2021. so, i say to myself, if the next move is pricing out rate cuts and then possibly raising rates, that just can't be good for equities, in my opinion. ones that have really just a acted, you know, like -- in a pretty reasonable sort of manner, this whole period. so, at some point, there's going to be something that happens that causes people to sell everything, all at once. you know, the dollar today, we saw that, what was going on. we saw what was going on with yields, gold wasn't even down a whole heck of a lot, crude hangs in there. i say, okay, if today's number, friday's number, it said, the economy is okay, well, sooner or later, the long and variable lags of interest rates going higher should kind of effect the economy and thus, you know, maybe, you know, these multinationals are not going to have the sort of margin, you know, that they have had and that's going to be a pressure on s&p 500 earnings. >> backdrop, though, to this time around in terms of interest rates where they are is that the consumer is a lot weaker, in

theory, than before. right now, households have spent down all of their pandemic savings, they have taken on credit card debt, the rates on credit cart cards are at record highs. they could be facing difficulty. we talked about electricity prices. the average bill year on year has gone up -- it's only 2% to 3% of household spending. but that's the bill that consumers open up and say, i'm paying more. and you add to this auto insurance which is up 22% in the cpi report. all these things hurt. even just psychologically, they hurt. >> so, the consumer is combatting inflation, which we've established is a problem, with credit, which is a -- probably as big a problem. and i don't know how that particularly ends, but in terms of the inflation story. jeff curry, he was on "squawk box" this morning, and he said, you know what, if it was just a couple of commodities, i wouldn't be that concerned, but he talked about it being across a swath of different commodities. industrial metals, precious

metals, and energy. and he's concerned by it, as well. so, it's there. the fact that people are still thinking that rate cuts make sense to me, or that six in the first place made any sense, was prepostrouse. now the market is starting to figo figure out, maybe hikes is something we should have a conversation about. >> for more, whether or not there could be a rate hike in the cards, let's bring in cnbc's steve liesman. great to have you with us. at what point is it not a blip, not a bump in terms of these inflation readings, steve? >> well, you know the old saying, two points to draw a line, three points to draw a trend, or there's the other saying which is, three strikes and you're out. i think we're kind of -- we're there, but i don't think we're actually out. let me just tell you what comes next in the next sort of story of inflation. we start tomorrow, guys, near-term, we have the inflation action continues with the wholesale price report. that's supposed to be better behaved than consumer prices,

believe it or not. all the closely watched indices there, you can see, are supposed to come down. that will be good news. and that will lead to a better forecast, or a more accurate forecast, for the core pce. you can see, that's been running about a percentage point better than the cpi. has shown some increased improvement better than the cpi. we'll get that report at the end of the month. now, futures markets remarkably kind of getting to what tim was talking about, they're clinging to this belief that the fed's going to cut, just further on down the road than before. take a look at these probabilities. we got rid of the possibility, almost, of a june cut, that's 18 now or 20, compared to 58 before the number. down about july, but what happens? still 66 for september. so, a post-labor day cut is now the bet, rather than one just after memorial day. but who is thinking about vacation and days off? not me. there's still some reason to forecast cuts besides just

grasping at straws but it's not going to happen unless inflation starts to decline consistently. what comes next? rate cuts if inflation falls. i just think, melissa, the idea of a cut, still out there, i've been right in forecasting a lot fewer cuts than the market has but i still think, and i'll give you one very good reason. according to the fed's own framework, even if they cut 25 or 50, they would still be restrictive. so, they need the precondition to cut, but they already have the reason. >> okay. so, three strikes, we're out, three strikes is a trend -- and i'm wondering, steve, if a rate hike could be anywhere out there now? >> i don't think so. >> okay. >> and it sort relates back to my last answer. the two options i believe on the table for the fed, i could have this wrong, are holding at the current rate or cutting. the reason i don't have the hike in is because the fed by its own

measures or metrics is restrictive relative to where even inflation is at this higher rate. i think that's important to understand. the fed is probably -- i don't know how you want to measure it, 150 basis points, 200 basis points restrictive. if it took 25 or 50 off the top, it would still be restrictive by that metric. what we do need is what dan was talking about before, we need the economy to start acting in practice the way the fed has constructed the economy to act in theory. >> steve, it's karen, thanks for being on. do you think that there is anything holding the fed back politically, let's say, from, if they wanted to cut it sometime before the election? if june's off the table. >> i've been looking at these -- the data. the fed seems to act when the fed seems to feel it needs to act, according to most

calculations, and it's taken heat, if you remember the bush, the first bush administration in the '90s took some heat for that. there are times it's cut during election season. i think powell would like to get it done well before the election or act after the election. i just wonder, guys, when we look back at this, i'm fascinated by your perspective. does a cut right after labor day going to matter that much if it comes rather than one that was right after memorial day? i don't think down the road it's going to matter all that much. >> all right, steve, thank you. >> pleasure. >> steve liesman. our next guest says equities have topped for the year. andy constan is with us now. does this mean we're going to see rates go higher, perhaps? >> right, so, i think, melissa, that's the question, which is -- equities will only respond -- we'll only get a tightening of financial conditions if, rates, do, in fact, go higher. steve just mentioned the framework around the fed and its

claim that conditions are tight in theory, are restrictive in theory. i think he's right. it's just not in practice. and that could be because the economy can handle higher rates. which would mean that if it were not restrictive now, that inflation will stay higher for longer. and so, i think until we actually see some evidence of a restrictive economy, which would be widening credit spreads, falling equity prices, widening risk premiums on assets including term premiums on bonds, higher mortgage rates, the economy's going to still run very hot. and you can tell that not by looking at the very shortest expectation of fed cuts, but you look out to two years now. and over two years, only 107 basis points of total cuts are priced in. so, they're not going to cut much for over -- for almost two

years. and so, that just tells you that the economy is strong. and it will take more for higher rates, and mostly higher long-term rates for the economy to turn over. >> sounds like the fed would have to re-evaluate what it believes is restrictive and sort of re -- you know, configure that framework that steve was talking about. do you think the fed is getting it wrong right now? >> well, i think they do consider financial conditions, broad financial conditions in their framework. they focus, and there's a myopic behavior that particularly we saw in waller's speech in december, around this very short-term real fed funds rate that steve described. but they also have mentioned that when rates were at 5% in october, that higher rates was doing some of the fed's work for them, and they would not have to

cut, because lock-ng-term rates were higher. since then, they fell 110 basis points to the lows at the end of the year, and are finally starting to climb back up, but at this point, they're not anywhere near as restrictive as they were in october. so, i think they consider financial conditions, but they do have this myopic approach toward real fed funds rate that seems to have backfired a bit. >> hey, andy, it's tim. so, let's drill into this ten-year auction, and we spend time with you and we should all be spending a lot of time focused on this refunding cycle, and the ones coming, but to oversimplify your answer, what's causing higher yields? is it the macro, is it that the buyers who, you know, typically have been more aggressive and there's certainly been a secular trend that's been going on not

just this year, or is it purely the size of these auctions? what is the biggest ingredient? >> so, i think three things, but certainly the rates started moving higher when the last qra came out, which was on february 1st, you started to see a significant increase in long-term interest rates. and that was because the market was not prepared for $538 billion of new coupon issuance in q-2, nor were they prepared for the fact that it's likely to be $1.5 trillion of total supply of new coupon issuance between the beginning of q-2, which we're in, through year-end. so, there's 1.5 trillion that has to get absorbed. that's certainly impacting bond yields right now. the other thing is that you're seeing rising inflation ex expec expectations, which are partly mechanical, with increasing in oil prices, but also, in other commodity prices. but also, somewhat in

expectations that the fed has paused a bit too long in dealing with inflation, has let it get away from them a little bit. and you can see that in things like gold. >> andy, it's karen, thanks for being on. how does the sort of discussion around reducing qt, slowing qt, how does that sort of fit into tim brought up on the other side? >> right, so, if they taper qt, which i fully expect them to do in the minutes today, they mentioned it, it may not be in the may meeting, but it's certainly likely to be in the june meeting. they do have some concerns about the uneven distribution of reserves amongst the banking system, which is a small part to be concerned about. so, i do expect them to taper, but once again, taper just means that they require less issuance from the u.s. treasury to pay them back, because you know, as you know, they -- we do runoff at the fed, in that they just let bonds mature.

in this case, they'll reinvest more of the proceeds from that maturing. and they've handed the monetary ball to the treasury. so, to the extent they taper, that reduces the amount of issuance the treasury has to use. if the treasury then decides to keep coupons still at this 500 billion net per quarter and just reduce bills, the taper won't be felt by the economy, and it won't be felt by the market. if they choose to reduce coupons, and reduce the amount of supply of duration that the investment community has to buy, then that would have an impact on taper, so, i think by may 1st, when they do the next quarterly refunding announcement, we'll have an answer on howthey're going -- we may have an answer on how they plan on changing composition. >> andy, always great to see you. thank you. andy constan. guy? >> it's a really interesting

conversation, in terms of what do higher yields mean for the broader market. that's what we're tasked to do. maybe it's a 4.5%, where things start to get interesting again and the market's waking up to it today. i think tim's question is, why are rates going higher? it hits the nail on the head. they're going higher, i believe, for the wrong reasons. issuance being one of them. and not that we have to get into it now, but you're starting to see the ramification in different currencies, not least of which dollar/yen -- >> 153. >> something that, i'm telling you, over the next couple weeks, the network will start talking about this in earnest. >> the best intervention territory -- >> yeah, and they, in fact, they were kind of at this place a month ago, and everybody knows what they need to do, and the irony is, of course, what they need to do is actually, by getting away from ycc and r really -- it should implicitly bring their dollar up. but i just look at where we're

at with rates, i would argue, this has been a three-year move higher in rates. there's been a lot of volatility within this, and during this for years, we've had remarkable equity rally. at some point, you know, equity investors have to do the math on this. we just haven't done it. and i -- the question we're figuring out is what that sensitivity level on ten years. coming up, cars, real estate, and private investing. tesla tumbling. the real estate sinking. and how one firm's new etf is letting investors get in on private companies. but first, some fast movers catching our eyes in today's selloff. how our traders are handling these stocks when "fast money" returns. this is "fast money" with melissa lee right here on cnbc. sweet, turn simulation off. tssk, tssk, not so fast. what, why? did you forget marcus? forget what?

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welcome back to "fast money." on a day when many stocks took a turn for the worse, we want to take a look at a few names that managed to close in the green. let's start off with taiwan semi. up slightly today, after posting its fastest monthly revenue growth since 2022. of course, a major supplier to nvidia, as well as apple. dan, what did you make of this news? >> here's the thing.

they got kind of easy comps, if you look at what they -- what went on from 2022 to 2023 and now we have 2024 and we know where we sit and who their customers are and the demand for their products and services. i just get to a point where we're not going to be so far away where one of these companies are going to disappoint on those expectations, and the stocks are trading at levels we haven't seen from a valuation standpoint in a long time, and they seem to be very concentrated. so, to me, i'm just saying, keep an eye on this, because again, this was in a rocky market, the stock was probably poised to do a whole host of great things, amazing things in a green market. it just happened to be the one day we were red. at some point, we're going to have disappointing guidance, and i think it's probably, you know, it's probably going to be a knock against the smh. up next, alibaba. solidly in the green today, up over 2%. that's nonneon news that jack m touted success, and potential for a.i. in alibaba's business.

tim? >> interesting. for a stock that's been stuck between 71 and 78, this isn't the reason to take it higher. they're talking about more growth, they're talking about price cuts in ali cloud. they are focused on some of that business. their international business, which has grown 40% a year, they're talking about cost-cutting and the domestic commerce is getting better. it's all going to come down to what the government wants this company to do. that's what's been the ball and chain on the stock. so, it's great to hear about a.i., but they're not the kind of folks to get the a.i. pixie dust. >> macy's settling its proxy fight with archouse this morning. macy's saying it will add two new directors to its board, both of whom were archouse nominees. they continue their effort to take my iacy's private. they ended the day up more than 2.5%. karen? >> sort of an interesting turn of events here. macy's sort of -- must be a little bit worried they would have lost the proxy fight. they didn't want to face that. and if they're not certain these guys are real buyers, say, okay,

you have some real guys on your -- men and women, these are two men they put on the board who are real people, to be on the finance committee to help evaluate if, in fact, there can come to a deal, so, mild positive, i would have thought -- i mean, bad day to trade on this, but would have thought it would do a little better than it did. there's a lot more "fast money" to come. here's what's coming up next. tesla rolling downhill, as wall street gets even more bearish on the name. why the company seems to be losing its charge. next. plus, rates crushing the real estate sector. reits tanking after this morning's hot cpi data, and housing stocks are standing on shaky foundation. how this space can hold up as yields keep climbing. you're watching "fast money," live from the nasdaq market site in times square. we're back, right after this. taken every day, it's clinically shown to improve joint comfort in 7 days, with significant improvement over time.

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medical expenses, groceries, rent. it really helped close that gap. go, go, go! yay! go aflac! go duck! get help with expenses health insurance doesn't cover at aflac.com wish we had aflac on our team. you can! ( ♪♪ ) welcome back to "fast money." shares of tesla dropping today after more analysts lowered their price targets. bank of america cutting its estimate to $220. jeffries keeping its hold rating, but lowering down to 165. that's 3.5% lower from here.

analysts saying tesla's troubles appear self-inflicted and could keep its core auto performance lagging for up to two years. >> correct. i thought -- given the tape, given that commentary, i thought the stock would be a lot lower. it's not. i think it traded relatively well today, all things being equal. and those 163 lows, you can go back a couple months, go back a couple weeks. we held there, like a boss, as folks will say, so -- i don't know. i don't think you're pressing shorts here. dan would probably agree with that. i think actually, believe it or not, you can play this from the long time. i'm not saying -- >> into earnings. >> this is just trading the stock. they report on the 23rd. this could surprise people as we get closer to the date. >> wouldn't you want self-inflicted wounds as opposed to -- >> sure, but it seems like there are -- >> it's both. i think you have both. >> i do think, okay, so, a lot of the bloom is off the rose, but the multiple is -- that bloom is still fresh -- >> full bloom. >> i don't know how much bloom

needs to come off the rose before it's a buy. i don't know. >> depends on if you start thinking it's an auto company, in which case, a lot of bloom has to come off. >> the agm has been -- right. what do you do around that? and maybe there are some answers to priorities around leadership and products. and these are questions the market wants, because frankly, market's not going to be responding with the numbers. gross margins are coming down. revenue numbers are coming down. part of these downgrades are more mechanical. we saw this on the way up. they're still going to generate 2 billion in free cash flow, probably, if cap x stays in line. this keeps people in the analyst community, they can stick to a bullish case, it's not my case. and i think the stock is really expensive. >> the bear cases for the street and a loath of these reports have these. they're getting down towards that kind of $125 level, i think you probably take a little of that bloom off of the rose. i think as long as elon's there, a lot of folks that are

investors are never sell. that makes them feel really good about the longer-term story. but the near term, you know, you might get a rally into the print, but you probably sell it and sell it again, because i don't think the fundamentals of the ev business are getting any better any time soon. coming up, real estate tumble. the home construction etf on shaky foundation today after the cpi report. we'll walk through the damage and where to go from here. and it's not just for vcs anymore. retail investors can get in on the startup game thanks to a fund destiny tech 100. the founder and ceo will share his approach and the hottest tech names to watch. missed a moment of "fast?" catch us any time on the go. follow the "fast money" podcast. we're back right after this. [jeff laughs maniacally] (inner monologue) seriously, look at these guys. they are playing great. meanwhile, i'm on the green and all i can think about is all the green i'm spending on 3 kids in college. not to mention the kitchen remodel, and we'd just remodel the bathrooms last month.

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welcome back to "fast money." stocks dropping after this morning's hot consumer inflation report, but closing off the day's lows. the dow with its seventh cdown day in eight. shares of boeing lower again today, notching its eighth straight day of losses.

the stock is now down 34% this year, as the plane maker continues to deal with safety concerns and production issues. vertex pharmaceutical is buying alpine immune sciences. regeneron down after the doj allege d fraudulent drug prices meantime, today's hot inflation report having an outsized impact on the real estate space. the sector the worst performer on the s&p with reits like hudson pacific sinking between 6% to 9%. the home construction itf falling 5% and dropping below its 50-day moving average for the first time since november. let's bring in cnbc's diana olick for more. di diana? >> reits are rough today, because higher interest rates mean tougher dealmaking and tougher refinancing.

usually strong apartment sector, take a look, alexandria properties down close to 5%. camden down 3% and equity residential down. equity still up year to date. digital realty, who doesn't love a.i., but no love there today. still way up, though, year to date. and office, as you said, boston properties way down, 6%. as office vacancies nationwide hit a record high. that's why we see this drive to convert office to residential. and that's what you're seeing here in lower manhattan. a 1970s office tower now a 30-story luxury apartment building, converted by the van barton group. only 5% to 8% office conversions work due to zoning laws, covering location, and age of the building, basics like windows which usually don't open up in offices, but have to in apartments, and that can be a financial deal breaker. >> i think it's when you start to have multiple strikes against you, right? it's the window combined with deep floor plates combined with

in infrastructure that just doesn't support it. you know, the first thing we look at, too, is the neighborhood. will it support -- it is a good place to live? >> and you're always usually not allowed to add to the building space, so, they really did something cool. they closed off an interior dark section and added that eligible square footage to these top level penthouses. melissa, those rent for up to $10,000 a month. >> what exactly do they do with the space that's dark? because it still exists, right? they are just not using it? >> they close it off. they wall it off so that it's supposedly no longer exists as residential space and it's in the interior building which is too dark, everybody wants windows, and that's because it was an office building, they wall it off, they take that extra space and they put more stories up top. >> it is storage? >> closet space. >> there's nothing in it. >> that's crazy -- that seems

insane. that's fascinating. >> but you get the penthouse. >> yes. absolutely. it just seems like they should be able to monetize that empty dark storage space -- space. >> they did. y >> i guess they did. diana, thank you. it's interesting, you know, in terms of these declines, considering we had that big blackstone deal for apartment income, which they said, we think it's close to the bottom in terms of the market. >> simon properties, this stock rallied almost 60% off the lows. maybe justifiably, i don't know. in the absence of bad news, all the stocks sort of levitated. now, it's a different conversation. this is a stock that reports at the end of the month. i'm not suggesting anybody short anything, but if you've been long these stocks, you have to take a long look if you want to stay long at this point. >> so, the reit space has been interesting. there are transactions, which often, when you start to see activity, that's the sign of a bottom, because things have to get done. i am short the kre, however, i am long nycb, remember, i put

that trade on, so that sort of right at the crosshairs of the pro wil problematic part of the market. >> yeah, it's fascinating, and there's not a linear relationship between where rates were at the peak at 5% and what stocks will do, but the move in the xhb from that peak in rates, so that low point in the xhb, which was somewhere probably around 70 bucks to where it is, is close to 60%. we know that the fundamentals for a lot of the builders are impressive, we know what demand is, but to me, this is a story that i think has to get worse. now, i was wrong the first time, but i -- i look at where demand is going, and i don't think that's changing. it's just about supply and velocity and mortgage rates are moving higher. fascinating move. a lot of these interest rate sensitives seem like they're setting up for another round. coming up, a new fund allowing retail investors access to the hottest private

companies. the destiny ceo joins us next to talk about his fund, and the outlook for startups. and do not miss an exclusive interview with amazon's ceo andy jassy, that is tomorrow, 8:30 a.m. on "squawk box" right here on cc.nb meantime, "fast money's" back in two. i'm of 10 of our clients are likely to recommend us. our neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing? to help reach your goals with confidence. my sister's told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

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mark your calendars for cities of success, denver and boulder. two powerhouse economies that have risen above the rest in colorado. that's tomorrow, 10:00 p.m. eastern time here on cnbc. meantime, retail investors now have a way to buy into some of the most talked about names in private markets, thanks to a newly listed fund. destiny tech 100 holds 23 companies, including openai, spacex, and stripe. investors seemingly onboard with shares up more than 500% since its march 26th debut, but seeing major price swings along the way, down 12.5% just today. for more on the private market approach, we are joined by the founder and ceo. great to have you with us. >> thank you for having me. >> just to be clear, this is not an etf, this is a closed end fund, so, once you invest, you're in, correct? >> that's correct. >> okay. in terms of how the stock has been trading, or how the fund has been trading, as we mentioned, astronomical gains,

but the value of the underlying assets is under $53 million as of december. should it be trading here at such a premium? >> yeah, what we've seen is it's kind of become a cultural moment. these are companies that any other time in history would have been public companies, but over the last 10, 15 years, are remaining as private. so, people have thought about different ways to access these companies, and there's never been a liquid, transparent way to do so. that's been driving a lot of interest that we've seen across the america. >> so, that froth, that premium, whatever you want to call it, that's because of the scarcity value of this? >> i think the market is still discovering it. most people haven't heard about destiny yet, and right now, there's people being like, wow, i can finally access these companies that i know and love and hear about every single day. >> give us a sense, because, you know, we could go to stripe, these are companies that have been around a long time. most of us have been in the markets for awhile, you would have expected them to come public. what was the moment -- was there a light bulb that went off in

your head that said, this is going to be a trend that continues for awhile? >> yeah, five years ago, actually, i was 25, my dad finally asked me, what should i invest in? i told him, i don't know, spy or qqq? it made me think about, why wasn't there an spy or qqq for private tech? it only touches a very small fraction of the world. so, that's what we set up to build, is something that anyone can access from their brokerage account that invests in these companies that shape the future of every industry as we know it. >> so, you have the n.a.v. at 484. is that what you paid for those stakes to put into this, or what -- how do you determine that? >> yeah, we mark our n.a.v. quarterly, and we have a firm that assists us in valuing the portfolio on a fair value basis. >> talk about portfolio construction. we all know what qs are, we know what spys are, they are the market-cap weighed. how do you think about construction?

how do you think about number of positions and i assume there's nota liquidity mismatch. the biggest thing investors usually say, they've got this liquidity, but i see these assets, this doesn't make sense. >> yeah, so, when we decided to list this, we had a decision to make. are we going to list with zero companies? are we going to wait until we tgo to our target 100? we started to go with 23 and we went forward and listed this publicly. so, the rest of our building is going to happen in public as we expand over time. >> how did you determine, like, is there a committee that selects the companies that are in this? >> yeah, so, the big challenge in the private markets is, there's not enough liquidity on a day-to-day basis in the underlying. so, what we actually do, we go forward, we say, we publish on our website the inclusion criteria. these are the metrics that we look at for companies. and that is something that people can look at and see how

we think about investing. over time, because we have the transparency of a public fund, they'll be able to see, these are the positions, this is how it's evolved, and then make their own view as to the fair value of the fund. >> sounds like there's going to be a tremendous lag in terms of determining that value of the underlying assets and having the investor actually know what that's worth. >> one of the nice things about being traded on the nysc, every single day, the public is determining what the value is. >> great to have you with us. >> thank you for having me. >> what do you -- >> good ticker. >> yeah. >> if it's a given that typically companies come to market and there's not a lot of meat left on the bone, then obviously, you know, private markets, by definition, have been a more attractive place to invest. as dan's pointed out, companies made the decision to stay pry vault. it's not that they couldn't. you have to think about fees, you have to think about what you're paying for the underlying

fund, but also the fees to get them, sometimes there's a load to get in. there's bid ask, people that are selling shares are, you know, what the market will pay, again, that's where liquidity works against you. >> all fair, but it's a new avenue into a world that's been very difficult for people to access. so, congratulations, i say. >> it's fairly liquid, actually. it did trade 4.5 million shares today, which is kind of surprising, though -- you know, to me, it's always about n.a.v. versus where they are -- >> worth trading, yeah. >> interesting, though. coming up, a huge slate of bank earnings kick off on friday and options traders are betting that the regionals could make some of the biggest headlines. we'll dive into the action next. more "fast money" in two. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right?

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it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. welcome back. wells fargo, jpmorgan, and citi kicking off a big slate of bank earnings on friday, with the regionals on deck next week. those names got hit hard today after the cpi print with the kre down 5%, and options traders are betting this is the beginning of an even bigger drop for this group. mike khouw has all the action. hi, mike. >> so, kre, the regional bank etf, saw a big uptick in options trading. on more than three times the

average daily put volume. now, the busiest contract were the 43-strike puts that expire at the end of next week. but the largest trade was actually in the june 45 puts. we saw a buyer of 10,000 buy $1.54 of those. a big bet that the weakness we saw today could continue through june, and that would represent a decline of more than 7%. >> dan, i feel like i should go to you on this, because higher rates mean potentially nor troubles for the regionals. >> i go back to 2008 and i think about bear stearns going under and all the stuff that went in and around that, early march of 2008, and a lot of folks thought that was dusted, you know, s&p rallied, we got into the summer, and there were a lot of problems. and i feel like here we are now, we're bookending this move in rates, getting back towards those levels that caused some problems. and i just wonder if there's something else lurking here. and who knows? we spent a lot of time on commercial real estate. we spent a lot of time on

private credit, a lot of things that, again, i don't think there's been any resolutions in the last year or so, but i don't know. i would not be a buyer of the kre. >> you're short kre. >> i am. >> do you think this also, rise in rates, hurts bank of america once again? that's what it was -- >> well, obviously, they have that hold to maturity problem. yes. but does it help someone like jpmorgan, yes, it does. so, i mean, i think they're in the -- the big money center bank, particularly the jpmorgans, really benefitted from the problems that we saw last year. i think we'll see some one offs, but this is nowhere remotely close to '08. >> you're going to hear the money center banks tout the profitability of net interest income and as they look forward. but there's no question that the regional banks have a lot of real estate exposure, and there's no question that the held to maturity security portfolios, the longer we stay high and as we move higher, i mean, it puts more stress on the companies. >> mike khouw, thank you. up next, final trades.

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do not mitss a cnbc financil adviser summit. we'll hear from top investing experts including tim seymour. you're arnn investing expert? just kidding. visit cnbcevents.com/fa. time for the final trade. tim? >> yeah, big shoutout to "fast money" fans and ranger fans, the madsen girls, and boeing. i think we bottomed here. >> karen? >> yeah, dan's going to hate this, but i like jpmorgan optoption spreads.

>> guy was not voted sexiest man alive in "people" magazine in the first 50 years, so, maybe the next 50. >> guy? >> hope springs eternal. letter m. i think it was an interesting move today. >> thank you for my mission is. simple, to make you money. i'm here to level the playing field for all of you investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." my job is not just to entertain, but put days like today into context, so call