← CNBC's "Fast Money"
CNBC's "Fast Money"
Major Earnings After the Close… And the Fed Keeps Rates Unchanged 7/29/26
00:43:32
The traders monitoring after-the-bell mega cap earnings like Meta, Microsoft and Qualcomm. Live reactions to the reports and what they mean for the tech market in the second half. Co-head of technology and portfolio manager at T. Rowe Price Tony Wang talks all things tech and where he thinks the best trades are in that market.Then, the Fed keeping interest rates at 3.5-3.75%. All the details from today’s FOMC meeting and why Fed Chairman Warsh is praising the surge in high tech capex. Plus, earnings results from Starbucks, SK Hynix and more. Fast Money Disclaimer
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Mazda Commercial Voice
Mazda has been named Consumer Reports safest new car brand.
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Melissa Lee
It starts with our approach.
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Every Mazda comes standard with proactive safety features so you're more aware of what's around you, more focused on the road ahead and ready before problems ever start. Mazda more of what matters most to you. Go to mazdausa.com to learn more. Consumer Reports does not endorse or promote
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Melissa Lee
any product the board recommends approving.
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Tim Seymour
Regarding that seat on the committee, we're promoting quarterly earnings.
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Vanguard Commercial Voice
Every day shareholders meet to discuss important matters about the companies you invest in. Now you can easily make your voice heard. Vanguard Investor Choice gives you a say in the companies you invest in. With just a few taps, you can set your proxy voting preference for your index funds. Visit vanguard.com investorchoice to learn more. Vanguard investors own shares of our index funds, which own shares of the companies they invest in. Available for Vanguard index funds that participate in Investor Choice. Vanguard Marketing Corporation Distributor Live from the
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Melissa Lee
NASDAQ markets at the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight, a monster night of earnings from big tech to big burritos and beyond. We're dialed into all the calls after all tonight's reports and are bringing you all the details. And a sharp steepening treasury yield spreads widening drastically as the Fed holds rates steady. We'll dig into all the market reactions. Today's closely watched central bank decision, what it means for your money. Plus, South Korean stocks sink for a fourth straight day. Procter and Gamble misses revenue expectations and helps healthy gains for GE health care. What's got the stock surging to three month highs? Get the details. I'm Melissa Lee come dlr from studio be at the NASDAQ on the desk tonight, Tim Seymour, Karen Feinerman, Steve Grasso and Michael Kintopoulos, head of multiasset Macro Investing at Janice Henderson Investors. Michael, welcome some big names in tonight's earnings with Microsoft and Metta moving in opposite directions. We'll get you those numbers in just a moment. But we start off with a late day sell off on the street that sends stocks tumbling. The Dow leading the losses shedding more than 1100 points. It was its worst percentage loss April of last year. The Nasdaq down nearly 2% now officially in correction and S and P also dropping the moves coming after the Fed held rates steady at its latest meeting, sparking fears the central bank may not be doing enough to combat inflation. Take a look at the rate reaction. 30 year treasury hitting its highest yield level since 2007. The 10 year also sharply higher 2 year dropped that had the yield curve steepening sharply with the spread between short and long term treasuries spiking midday. For more on what we learned today, let's turn to Steve Liesman in D.C. d.C. Certainly the markets and like any of
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Steve Liesman
it Steve, I think it's an objective observation to make Melissa, that neither the long end of the bond market nor the stock market reacted favorably to the Fed's decision today or the comments made by Fed Chairman Kevin Wash, some suggesting the market reaction a thumbs down on washing to fighting inflation the long it as you just said getting killed. Here's the chart. The Yield on the 30 year it is the high surging 101211 basis points for a massive at 522 it hit the highest yield since 2007210 spread. Jeffrey Gundlach pointed this out to Scott Wapner steepened undoing the flattening from the last press conference. Markets now expect a hike in September, but less than they did from far the meeting 69% probability for a hike 31 for hold war subtly hinting a hike could be coming but listen carefully.
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Karen Feinerman
So I think it's a mischaracterization to
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Michael Kintopoulos
say that markets haven't reacted because we didn't move today. Markets are reacting in real time in the period ahead we've got important decisions to make about the policy. Rate markets in the intervening period I think have quite a bit of decisions to make.
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Steve Liesman
And the 9:3 vote included dissension from Beth Hammack of Cleveland, Neil Kashkari of Minneapolis, Laura Logan of Dallas. They could be pointing the way to where policy is going but the question is why the rate hike didn't happen at this meeting with the chair constantly promising price stability and getting back to the 2% target. Mark Spadel from Potomac River Fund telling me the reaction of the long end of inflation expectations of gold all during the press reveals a market questioning the chairman's resolve. He's had two opportunities to raise rates and hasn't even as the market builds in expectations for rate hikes hike may be coming but the problem is Bush's failure to answer basic questions about what he's thinking, why it makes it difficult to predict and at some point raises the question about whether he will act and why.
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Melissa Lee
Melissa I feel like you squinted real hard in that sort, Steve. I mean this is like the second or third time I've listened to that same sign. I didn't necessarily hear that a rate hike was coming from that. How did you get that message, it's
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Steve Liesman
the more work to do, that we have more work to do and the market has more work to do. There's another similar statement like that where he says that this pause or this decision today is just the beginning of a process. So that kind of said maybe it's coming down the road and maybe he wants to play for a little time here. But what we're seeing from the market, at least the initial reaction, they could decide differently tomorrow morning. That's always the potential case. But the initial reaction is the market wanted some sense of either action or a sense of how the Fed would react and you just can't get a drop from it. It's like, you know, the old blood from a stone adage.
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Michael Katapoulos
Yeah, Steve, hey, it's Mike in Topless here. Yeah, I appreciate that view. The one thing I'm trying to reconcile is what the Fed's reaction function is to the market. I mean, he didn't really give a straight answer. Right. He mentioned how real rates are up, how the market is essentially tightening financial conditions for them. So how attuned do you think the Fed is to what the treasury market's doing and do you think it will impact what they do at the next meeting?
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Steve Liesman
Well, Mike, thank you for affirming my confusion and lack of understanding of what happened today because sometimes you feel a little bit alone out there. But as I said in the last hour, I never listened so hard and heard so little. My question was exactly what you're asking. My question to wars was, hey, you told us to listen to the markets or that you're listening and watching the markets. What are the markets telling you? If you're not going to tell us your reaction function relative to the data, then tell us your reaction function relative to the markets that you just told us are now unfiltered or untainted by the Fed forward guidance. And to me the answer would have, should normally have been, well the two year is trading 70 bips above the Fed funds rate. That's telling me market should be higher. You also by the way had a rise in the, the chip spreads today, told you that the market is concerned about inflation. And then look at the 30 year, the 30, if you look at intraday, I mean that is some kind of blood on the street on that particular trade. You know, that's, that's, that's 1112 basis points right now. And then that's telling you the market wants something done here. But even in the absence of doing something, a clear explanation of the road ahead and There was even some, I would say some unusual and I've been in those press conferences the very beginning since 2011. I would say some unusual frustration on the part of reporters.
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Melissa Lee
There should be interesting months ahead. Steve, thank you.
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Steve Liesman
Pleasure.
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Melissa Lee
Steve Lisman so we definitely saw market react. What did the markets tell you, Tim?
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Tim Seymour
Boy, you know, this is a really important earnings day. But as we like to do, we, we hit the most important story. I mean, this is a massive story because first of all, let's just underline what we've been saying. New paradigm Fed less, less detail. And it would be a mistake to interpret the lack of forward guidance that actually things are more benign for September. In fact, if anything, I think it does set us up for fear in September. But the market interpretation was look at how the dollar dove, look how gold rose. So when you have yields back up and the dollar dives, it's basically saying the Fed's behind the curve. And actually it's more of a credit response as opposed to, you know, if the dollar rallied, it would be, hey, the Fed is front forward, we're going after it and actually we're chasing inflation. I would also just say that Warsha's two tools that he's talked about, the fact that he didn't move on interest rates means to me he has to move on the balance sheet. And the balance sheet has really grown and I think this is something we're going to hear a lot more about in the next couple of days.
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Eric
So it was confusing to be sure. But the thing that I found interesting and talking to Andy Katz about this was he was telling you loud and clear over and over, I'm happy with the long end being higher. It's doing the work for me. It's going to, this will, this will help inflation. Right. If he had done the opposite and the bond and the long end, love that because, oh, he's addressing inflation. That may not have, that may have been counterproductive. This is, look, you know, this is a long time it's been coming for us to unwind this and it's not going to be easy, but the market is doing it for us. And so it sounds to me like that's, that's the way he's going to continue and for us to wait for this, you know, these small little issues hike does he not isn't really where he's going with the balance sheet. To your point about balance sheet, you know, that's important as well. We'll see what they do with balance sheet.
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Melissa Lee
Right to that point Turns the market doing it for him. I mean the market, the 10 year yield is basically up one hike since the last Fed meeting. So yeah, we're seeing that in.
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Karen Feinerman
So I think he want, he wants what Karen is talking about. He wants the market to do it around him and he wants us to figure it out without the Fed holding our hand. So we went from sipping from a wire hose, wire hose, a fire hose to, to getting nothing, not even a trickle of information. So I get that we're not getting any information, but what could he do for inflation? History shows us that 75 basis point hikes are point 1% influence on inflation when it's due to a supply shock, not a demand pull. So there's very few things the Fed can do when the Fed didn't cause this.
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Melissa Lee
What do you think?
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Michael Katapoulos
So I think, I think the market is starting to lose today. We'll see what happens tomorrow. We're starting to lose a little bit of faith. You know, I think growth and inflation's high. The Fed is not addressing that higher growth and inflation. That's why the long end sold off. That's why the two year did nothing. Listen, this is a bear steepening on the back of strong growth and I think at some point the Fed is going to have to address that.
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Melissa Lee
To be fair though, he has a committee. It's not just him saying, waving the wand, saying I'm going to hike rates. I mean it was nine to three. Yeah, that would have been a lot of convincing on the part of Kevin, even if that's what he wanted to happen. So how can we actually say we're losing faith in him?
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Michael Katapoulos
Well, I think that's a fair point. I think it's, it's, there's a reaction that the market's losing faith in the committee or the reaction function of the committee. I think it's not individual. I would agree with that.
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Tim Seymour
Okay, well I think it's, it's an important day for again a lot of reasons but ultimately the fact that the market closed on the lows, the S and P which was holding out and broke through the 50 and the response to that rates could go higher. And I think again the market is trying to push the Fed, whatever we're saying is his tactic here. There's no question that this is a market day and it's a day when you started to see some of those names that had been defensive, give some ground and if there's interest rate sensitivity out there, equities are not priced for it. There's no question about it. And this is a case where that upward move in yields has been going on for for I understand we could say over two years yields have done nothing. But I could say from October we have an uptrend in terms of where interest rates are going and I think it's the past the path of least resistance.
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Melissa Lee
We do want to get to Medicares. They are at their after hour session lows right now, down by almost 10% after the company missed earnings expectations. The social media giant also delivering disappointing revenue guidance and narrowing its capex spend for the year by raising the bottom end of the range. The call is underway right now. Julia Borson got those numbers? Julia?
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Julia Borstin
Yeah, a number of factors here Melissa. As you mentioned, shares trading lower on the company, raising the lower end of its CapEx range for the year, third quarter revenue guidance below expectations and an earnings miss. Now on the earnings call just now, CEO Mark Zuckerberg saying that AI is improving the user experience and ad performance, saying it's also creating new potential revenue streams. Zuckerberg saying, quote, we see a large enterprise opportunity to sell to businesses including APIs, business agents, potentially selling COMPUTE directly in other services that we're building for large customers here. He also said in response to a question just now, we believe that there will continue to be a significantly higher margin on selling intelligence rather than selling COMPUTE directly. We think that there is a big opportunity obviously to sell COMPUTE as well. Zuckerberg going into some detail about how they are going to be offering several pricing options and tiers for their Metta one subscription offering. Sharing some bullish commentary about the glasses as well. But the stock does not seem to like this cost. Shares now trading down over 10%.
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Melissa Lee
Melissa do we have an understanding at Julia as to how matter is viewing selling excess Compute, whether this is of a sustainable business or if this is just sort of an opportunistic thing to do at this moment in time.
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Julia Borstin
Seems like it's way too early to weigh in on that, Melissa. I mean they haven't shared their plans around this at all. There are so many different ways they could do this. Zuckerberg saying they do believe they will use the majority of the capacity to themselves, but that there is this opportunity for the excess capacity. So he's teased ahead that they're going to be sharing more details and I think that's when we'll get a sense of whether this could really be a long term meaningful new revenue stream for the company.
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Melissa Lee
All right, Julia, continue to keep us posted please. Julia Borstin on matter those shares are down in excess of 10% right now Karen, what do you make of this quarter, this sell off?
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Eric
So the quarter was fine but that has nothing to do with this really. So you know in the business of what used to be their main business. Right. So family, family daily activities down a little bit but you know it was fine but that's not the point. The point is the Capex numbers disappointing. I guess it's better than had they raised them more as opposed to just being sort of in the range but just you know looking at what happened to the bond market early yeah everything just got more expensive. Right. So if they, they can either go to a more expensive debt market or they can go to a now very getting expensive not very but less favorable equity market for sure so that sort of, I don't know if that should slow the wheels down maybe not just for Metta more broadly Anybody, anybody borrow, Right. Who has to borrow so if that ends up slowing I actually think the best thing they could have reported is we're slowing things down materially for the stock right now. Maybe they would say no, not for the longer, longer business. I don't know how, I mean the street is really, you know, very disappointed. I don't know how much longer it can be sort of given a pass. This isn't even a pass. This is, I mean down 10%.
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Melissa Lee
That's significant.
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Eric
It is very significant particularly where it's come from before.
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Melissa Lee
I mean the timing of it in terms of the reports about, you know the most recent bond sale having to be priced, you know, above what it had priced the Hyperion deal and then you have this uptick in rates here
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Eric
and then you had blackrock doing most of the debt.
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Steve Liesman
Yeah.
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Eric
Yes. So yeah this is, you know as a matter holder it's, it's self hedging in that it's less now but this is now my fourth or fifth position where it used to be first it used to be a cash cow used
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Tim Seymour
to be great different story yield curve steeping not helping the hyperscaler spent and and tightening the bottom end of the range. But are they selling capacity? Are they selling over capacity?
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Melissa Lee
Right.
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Tim Seymour
I mean I just wonder you know when I hear that I what's too bad is that we miss out on a 28% ad growth which makes them far and away the best and the fastest growing and their core business is kind of exciting right now but I do think it's, it's something to be concerned. I also just think the regulatory issues were flagged as being something that had material chance to spike. I know we never have. We typically have never worried about the regulatory framework for Google or for Metta, especially around the world when they're getting fined this and that. But some of these lawsuits in terms of the youth dynamic that at least and they communicated them I realize they have to get out there and talk about them. So I think there is, there's a fair amount here. Note by the way trades right down to 520 which is that March 27low. Let's see where we hold. But that's a key level.
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Karen Feinerman
There's no diversifying away from the core business. They make 98% of their revenues from ads. So to diversify is is nothing. It's incremental. They're spending too much money. They have to have sort of a pseudo year of efficiency but maybe a quarter of efficiency.
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Melissa Lee
How should we think about the impact of rising yields on the financing of these projects?
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Michael Katapoulos
I think it's a huge, a huge factor. You know listen to the earlier debt offering you saw earlier this week is only 1.7 times oversubst described. That's like nothing in the bond world or five times earlier in the year. Listen, higher yields affect the multiple affects debt sales. You know this. I don't think this is a good environment for the hyperscalers at the moment.
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Melissa Lee
Let's get to Microsoft here. The shares are higher by almost 2% after hours. The company's Azure cloud business grew revenue 43% year on year. The call kicks off in just about 5 minutes 15 minutes time. Kate Urani's got the report there. Kate.
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Kate Rooney
Hey Melissa. So Microsoft was helped by strong cloud growth in the quarter. A beat on the top line at least. You look at total revenue that was up 18% from a year ago. EPS was a little bit messier. We're not going to compare that number. It did not a $3.2 billion gain from its stake in AI giant Anthropic. And it is also open largest shareholder $0.07 gain from its stake in that company Azure revenue though that growth was better than expected. That was a key number to watch. 43% growth in the cloud business and it passed $100 billion in revenue for the first time. Copilot also a bright spot paid seats there past 30 million. If you look back Q2 it was around 20 million. Q3 rather fiscal year so that was 20 million meaningful jump there. CEO Satya Nadella said in the press release. This reflects some confidence that customers are now placing in Microsoft to power their AI transformation. The productivity and business segment too. So think of office. LinkedIn saw 14% jump in revenue growth also lower than expected costs for Microsoft thanks to its first ever voluntary retirement program. Xbox revenue did decline about 10%. We do expect to get a bit more clarity on this entire CapEx discussion on the call coming up soon. Mel.
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Melissa Lee
All right, thank you Kate. Kate Rooney and we have to keep in mind that we still, we don't have any guidance from Microsoft so this happens every single quarter where the stock is moving in so direction conference call gets underway and it could be a completely different story, you know in a half hour's time but still here we are. Capex looks at this point to be exactly what they said it was going to be. No raise and for now that's good. And Azure is better than expected.
- [19:01]
Tim Seymour
So yeah I think this was even better than the whisper number on Azure which was kind of 41ish, 40 to 41. So I think it's important, I think it's going to be important for them to show that the operating free cash flow comes actually is free cash flow. In other words they come in on the positive side. They were negative last quarter. I think people want to hear that co pilot. I mean, you know, I don't know were they, were they sandbagging those earlier numbers? I mean that's huge, huge growth in a short amount of time and I, I think let's just bring it back to the Apple story which is now Apple hasn't been spending like a drunken sailor that maybe Microsoft could be accused of but you can make an argument that ultimately it's Microsoft's platform with enterprise and essentially in the retail community to, to own it and that and that copilot eventually will be something that has to be reckoned with. So I think that kind of growth tells you that Microsoft because of who they are is still very well positioned.
- [19:56]
Melissa Lee
Yeah quarter on quarter it's up 10 million more than 10 million pages 50% right. And then from the previous it was 15. We were ridiculing Microsoft for 15 here it's, we still don't know what the
- [20:06]
Karen Feinerman
seed economics are but it looks like that's a little bit of rear window eclipsed by both them outperforming on the seat growth and Azure growing above I think was supposed to BE estimates were 38% it was 40, 43% growth technically it bounced where it should have five times, maybe even six since 2023. I think this is actually becoming a buy right now.
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Melissa Lee
What do you think?
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Eric
I think very good quarter for sure so far of all of them. We got some left to go. I think the best one. It's surprising to me actually it's not up more given the kind of day that we're having in the whole sort of rethinking about spend everywhere. This staying with Capex as it is. That's a win given you know it's had a pretty tough run. I think it actually should be a more but worse.
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Tim Seymour
Today's half today 20 worst first half since 22. I mean it's from Microsoft been awful.
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Melissa Lee
Yeah, yeah. But IGV in general, okay, right.
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Eric
That's and that's what's plagued them as well. So all of that together, I would have thought it would be doing even better.
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Melissa Lee
I mean IGV in theory, I mean I don't know if we still believe this narrative, you know, hardware, software, but in a world where hyperscalers could be forced to pare back or that story slows, could that then further benefit igv which has already been sort of perking up of late? I mean, I don't know.
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Tim Seymour
I mean and as Steve pointed out, I mean the market's kind of telling you a couple of things and they've told you that with Microsoft and I think it has been worth nibbling, I think it continues to be worth nibbling and I think a lot of the story we said this even with Carter last night, kind of tighten it de risked on the chart and the entire software space.
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Michael Katapoulos
Yeah, I mean I think the big, the big risk out there, I mean chips is obviously led this year as we saw, you know, Taiwan and Samsung and Korea, South Korea and everything else, the chip makers, I mean all of that is on the back of massive Capex. And if you start to see Capex getting reeled in, if you get the year of efficiency, if you get sort of slower or even stable Capex from some of the hyperscalers which I think we're hearing tonight with Microsoft. I'm not entirely sure that's going to be great for the chip stocks going forward. I think the secular story is probably intact for chips but you know, you get some some more near term noise
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Melissa Lee
around that coming up. The earnings parade continues. Qualcomm, Chipotle and Starbucks also on the move after their reports bringing the very latest from those conference calls. Plus two health care names moving in opposite directions after their results. Humana took a sick day and GE Healthcare got a clean bill of health. Straight ahead. Don't go anywhere. Fast money's back in two.
- [22:38]
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Melissa Lee
a month on auto insurance when they switched.
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- [22:53]
Eric
The Board recommends approving regarding that seat on the committee.
- [22:56]
Melissa Lee
We're promoting quarterly earnings.
- [22:58]
Vanguard Commercial Voice
Every day, shareholders meet to discuss important matters about the companies you invest in. Now you can easily make your voice heard. Vanguard Investor Choice gives you a say in the companies you invest in. With just a few taps, you can set your proxy voting preference for your index funds. Visit vanguard.com investorchoice to learn more. Vanguard investors own shares of our index funds, which own shares of the companies they invest in. Available for Vanguard index funds that participate in Investor Choice.
- [23:22]
Mazda Commercial Voice
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- [23:56]
Melissa Lee
welcome back to Fast Money. We've got an earnings alert on Qualcomm. The chip maker shares down after mixed results and soft guidance. Christina Parts Nevilles is here with the details. Christina well, Qualcomm's core business, you mentioned
- [24:06]
Christina Partsnavelis
it shrinking revenue profits both falling this quarter as the smartphone market weakened. And that's the majority of their business right now, squeezed by rising memory prices that are just lifting costs across the board and cutting into demand. Handset chip sales, that's the smartphone chip sales dropped 20% from a year ago. CEO Christian Oman told me buyers are actually trading down even within the premium tier, pointing to what he called a challenging memory and supply environment. Qualcomm's answer is to pass those costs on. Prices go up across the board September 1st. Double digits in line with peers. That's what they just said on the call. Supply is so tight that when I asked the CFO about Apple revenue falling faster than expected next quarter currently Q4, he told me he's happy about it because it frees up capacity to sell elsewhere. Management also saying on the earnings call right now that the Android business should more than offset that Apple loss, that it came a lot sooner than expected. And Qualcomm wants investors looking past phones. The company says non handset chip sales jump from 24% now to more than 60% next year, becoming the majority of its chip business for the first time
- [25:10]
Melissa Lee
Guys, would that be like auto and Internet of things kind of stuff, data centers more specifically.
- [25:16]
Christina Partsnavelis
Remember they signed up two big customers in China too. They're making custom chips. So everybody like ARM is entering the chip business, the actual tangible chip business.
- [25:25]
Melissa Lee
Right. Wow. Okay Christina. Thank you Christina. Parts navalis down six and a half
- [25:30]
Tim Seymour
percent tim and down 40% into the print and so and this was another one of these names that that got the euphoria around it. All they seem to be doing is trying to talk about their life after Apple and so non handset revs will be two thirds of their revenue by fiscal 29. Well I mean doesn't sound like a great run before then. It sounds like yes non handsets growing 24%. They just noted that it is nice to hear that they're 70% Snapdragon 70% of you know essentially Samsung devices. But you know I'm not that excited even after this move.
- [26:06]
Karen Feinerman
I think Internet of things and and car automotive get you to around 23% of revenues still not enough to really change the spectrum for for the trajectory for the stock. But on a technical level back in May it was trading at $250. It's probably going to get down to a level where you're cut in half before find some support here not from 250 so I think you have another another 10 or so maybe if it bounces before the that level. But I would look for 120535 to be support in the stock so you don't need to catch this knife. The chart looks gross. That's a technical term. It's terrible. It's horrendous you
- [26:50]
Melissa Lee
I like to say Coming up the fast movers on our radar today. Why GE health care pop off Humana and PNG drop that's next plus another check on tonight's biggest tech reports. A top portfolio manager will join us straight ahead with his take on Microsoft matter and what we have learned from earnings season so far. You're watching Fast Money live from the NASDAQ markets at in Times Square back right after this. The board recommends approving regarding that seat
- [27:18]
Tim Seymour
on the committee we're most quarterly earnings
- [27:21]
Vanguard Commercial Voice
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- [27:46]
Karen Feinerman
I want to grow the game so every kid can fall in love with soccer like I did. So I asked myself what would you like the power to do? My answers inspired me to invent a pop up soccer goal that can turn any basketball game court into a street soccer pitch.
- [28:03]
Melissa Lee
Bank of America Champion Street Soccer Advocate Kyle Martino and everyone who dares to ask what would you like the power to do? Bank of America Proud to be the Official bank of U.S. soccer and FIFA World Cup 2026 bank of America NA Member FDSE when you partner with CDW, you get more out of your network with solutions that support transformation. CDW experts are delivering seamless experiences using Cisco networking solutions bringing first responders reliable connections, developers, high bandwidth apps and clinicians Secure collaboration make amazing happen. Learn more@cdw.com Cisco welcome back to Fast Money. Stocks sharply lower after today's Fed decision. The dow losing over 1100 points. The S&P down a percent and a half in the NASDAQ dropping one and three quarters of a percent. Some names seeing big moves during the trading day from Procter and gamble down almost 2% after sales came in below estimates. The consumer staples giant also giving a soft outlook for fiscal 2027. Humana sinking 6% despite top and bottom line beats the insurer leaving full year guidance unchanged, falling short of investors expectations and GE Health Care soaring 12% after topping earnings estimates and reaffirming full year guidance. And some more after earnings movers are watching Carvana sinking after full year guidance came in well below Wall street expectations now implying a relatively flat second half of the year. ARM holdings also lower despite top and bottom line beats a chip designer saying customer demand now exceeds $2 billion across fiscal years 2027 and 2028. Finally, Robinhood dropping even after revenues came in ahead of expectations. Crypto trading revenues down 38% year over year. The CEOs of both ARM and Robinhood, by the way, will be on CNBC tomorrow. A lot of stocks there. What do you want to trade?
- [29:55]
Karen Feinerman
Yeah, I mean I thought Proctor was kind of a, kind of a letdown when in this environment if you see people trading down in Staples, that's, that's a problem. So you have to go hunt your best, your best staple stock there and one other one in Robinhood. They were seen as the adult in the room. They're diversified, play better than the other crypto plays so shocking to See the chart there and shocking to see them down.
- [30:17]
Eric
GE health care boom. Any spawn of GE boom is just, I mean not every single. This one has no but I mean very healthy end market demand. I mean revenue growth very good. A little what PCs, patient clients. They had some supply chain issues, but stellar quarter. I mean there's good margins. Nicely done.
- [30:43]
Tim Seymour
Yeah, I thought that one caught my eye too. And I have a stub of GE health care as part of this little basket of goodies that GE gave us when they split it up. And it was been one of the laggards. But the discussion about AI helping supply chain and actually being a margin enhancement is exactly what you want to hear, especially across the health care sector. So this is a, this is kind of a breakout pop and I think you follow it.
- [31:08]
Michael Katapoulos
The the 1 billion after tax impact for Procter and Gamble due to raw materials. To me that was a big story. You know it's showing that these staples companies just can't pass through costs. Inflation's biting and you know, I'm not sure if that's really, you know a good story going forward because I don't see that really declining. And then the other thing I'll just throw out there is you know, the beats and then the big down days are suggestive of something going on and I think it's that listen, we've been in a market that's been fueled by excess liquidity. Valuations are reasonably high and you got to do more than just beat now. And I think this earnings season so far it's highlighting that for me me.
- [31:43]
Melissa Lee
Coming up even more on tonight's key tech earnings. Microsoft's call just getting underway. T Rowe Prices Tony Wong will join us with his reaction to all of tonight's moves right after this break. Missed a moment of fast.
- [31:55]
Michael Katapoulos
Catch us anytime on the go follow
- [31:57]
Melissa Lee
the fast money podcast.
- [31:59]
Michael Kintopoulos
We're back right after this.
- [32:12]
Melissa Lee
Taking a check on how we are doing in the after session. Metta shares down by about 9%. Microsoft up 2 1/2 percent. Microsoft just kicked off its call moments ago. T Rowe Prices Tony Wong joins us now with his take on these earnings and much more. He manages the firm Science and Tech Fund. Tony, great to have you with us. You own both of these stocks. What do you make of Meta's decline here? What more does matter need to communicate to investors to to really sell the vision that they have?
- [32:42]
Michael Kintopoulos
Yeah, I think there's a few things. One, you know, I think that their core business needs to be remain really healthy to pay the bills and Then number two, I would say these new businesses that they're starting up, whether in S and P or enterprise in the consumer space, like I think there probably is a, is a question of like where the focus is from the market and where the ROI is going to come from. And so I think there's a lot of scrutiny here and that' how I think the market is looking at it right now.
- [33:09]
Melissa Lee
Are you disappointed with matters earnings? Are you disappointed what's happening on the conference call so far?
- [33:15]
Michael Kintopoulos
I think that if you're going to be spending at this level, you have to really execute well. You have to show accelerating top line, improving margins. And I think we're in this phase where like you got to raise external capital in order to continue that. And so it's even more important at this level to spend that incremental capital.
- [33:35]
Tim Seymour
Hey Tony, it's Tim. Thanks for joining us. And I guess that's where I wanted to go. I mean at what point do you make a change in your assessment of the attractiveness of the investment based upon the balance sheet or at least the lack of free cash flow? And as we've talked about what the costs for financing Datacenter and capex are growing. Is there, is there a threshold for you where this, the multiple you believe this company should trade at has changed?
- [34:04]
Michael Kintopoulos
Yeah, I mean I think there's a lot of balance sheet obligations that you're pointing out. In addition, you know, there is a good amount of, you know, depreciation coming through over the next few years and that's going to hit earnings. Right. So I think that it acts like a two way street. If you're growing really well, you have great products fit, you show usage and adoption and then I think it's great to be spending but I think that if you're not excluded, well, you can go the other way and act as leverage.
- [34:33]
Melissa Lee
How do you think about matters ability to raise capital going forward for all of these projects which don't seem to be ending at this point? There's a lot of press yesterday about, you know, their most recent offering having to go out much higher than what it offered for Hyperion just, you know, last October. So how do you think about that in the context of a rising interest rate environment, the interest expansion? Spence?
- [34:56]
Michael Kintopoulos
Yeah, so I'd say the bulls argue like what's another 50 bips? Right. And you know, given how existential this is, how important is how, you know, the investments are long lived. I think that's what the bulls would argue. I think what the market is Becoming more concerned about is just that incremental ability to finance. Right. And you know where this ROI comes from and when you have to convince debt holders and equity holders to do that, I think you have to be more precise and execute well to that. So you know, I think that they're going to have to continue executing, put up numbers, accelerate, show traction in the new businesses in order to convince the market with that.
- [35:37]
Melissa Lee
So what we've seen so far in earnings season, Tony, is that the companies that are raising capex, they're getting sold off and your fund, the top 10 holdings are all chip stocks, they're all the beneficiaries of the spend. And so how do you think about that as it relates to those holdings that you have and also what's going on in Korea because part of this whole chip euphoria was the amount of leverage in the Korean system which is now being unwound and we don't know if it's completely unwound yet at this point.
- [36:08]
Michael Kintopoulos
Yeah, totally. I mean like, you know, I kind of grew up in semis as an analyst so you always have to remember that there's always cycles, right? So you have to constantly risk managing, assessing the new data points and you know, I think that the market is trying to figure out like what the growth is from 27, 28 and I think that part of that is going to be the roi, the utilization of the cloud and then also sustainability of the spend. Right. So I think it's trying to put together all those pieces and it's not just about near term earnings, you know, and it's more about the view of like what the next 12 to 24 months looks like and you have to go to like kind of the capital spenders and the customers to evaluate that health.
- [36:48]
Melissa Lee
So now that you see that the people or the companies that are selling, I mean that are, excuse me, buying stuff are getting sold off and there's inherent pressure on that narrative. How do you then think about the chips? I mean, are you getting concerned that, that that's turning, the story is turning?
- [37:06]
Michael Kintopoulos
Well I think you always have to be humble, right? When the market is telling you something, you know, at the same time, you know, you look at like what the other areas of innovation and AI are and I think that if you go to this multi agentic world where you have, you can string a team of agents together, you know what Anthropic has been talking about, country of geniuses, you know, Codex by, you know, OpenAI, like their attraction is really important. I think to sell to accelerate this growth and keep that intensity going. And I think that also kind of uncaps can uncap the usage. At the same time, you're also seeing a lot of, you know, increasing costs, whether in the construction of it, the cost to borrow, you know, other parts of the supply chain. And so I think that's pressuring in terms of, you know, how much incremental capex you can raise. So I think you got to put it all together and look at it from a secular perspective and then also a cyclical one too.
- [37:57]
Melissa Lee
All right, Tony, thanks. Great to get your thoughts. Tony Wong of T. Rowe Price, when you put it all together and shake it all up, Michael, what do you get?
- [38:07]
Michael Katapoulos
I mean listen, you can't let the secular get in the way of the cyclical. And at the end of the day, what drives the cycle are earnings. You know, we recently produced a chart that showed all earnings growers of greater than expected earnings growers of greater than 25% in the all country world index. So long term earnings growth, expected earnings growth of greater than 25% in the All Country World Index. Guess how many MAG7 were on that list? 01 Nvidia. So there's about 200 companies in the all country world index with expected earnings growth of 25% or more and 1 MAG7. So when we're talking about the cycle, I would say the cycle's favoring a lot of other stocks other than other than the Max 7. The other thing I was quickly note is these companies are becoming EMP companies. I know I've said that before on this, on this set, but they have just like EMP companies who have to drill, drill, drill right and keep getting new wells. These guys have to keep building, building, building and spending, spending, spending in order to to drive business.
- [39:01]
Melissa Lee
Coming up, a double portion of restaurant earnings. Starbucks and Chipotle both on the move after the results. We are digging into all the numbers when Fast Money returns. Welcome back to Fast MONEY Earnings alert on Chipotle and Starbucks, both stocks climbing after beating estimates. Brandon Gomez got the details on this. Brandon.
- [39:23]
Brandon Gomez
Hey there, Melissa. Yeah, let me dive into the earnings call highlights. Chipotle beyond the beat in same store sales growth also announcing a new share repurchase at 1.3 billion. That's part of the 1.7 billion Chipotle had available for share buybacks at the end of Q2. Cyclospora mentioned briefly CEO Scott Boatwright saying we're not involved in that. They sourced lettuce in California. Starbucks also popping Higher. The company saying customers are still spending across income group and age pricing contributing less than 1 percentage point of ticket growth, suggesting most of the comp increase came from higher traffic. Now raise guidance detailed too on the call, citing stronger sales momentum and improving margins. You can see the numbers detailed here. Starbucks CFO saying tariff refunds received in Q3 offset largely tariffs incurred in the first three quarters of fiscal 2026. Brian Niccol calling the turnarounds quote ahead of schedule. Guys.
- [40:13]
Melissa Lee
Yeah, Brandon, in terms of the comments on cyclospora from. From cmg, I mean was it that brief that he just said our lettuce comes from California? Because we don't actually know right now what the source of the outbreak is. And if it's the water, then it could be wider spread.
- [40:31]
Michael Kintopoulos
Right.
- [40:31]
Brandon Gomez
Could we find out down the road that perhaps some of the California sourced lettuce is in fact part of the contaminant? Right. Well, we'll see what the numbers and impact looks like as the investigation goes on. But also as we get more information in terms of where and when this was all sourced, we get more earnings commentary from Yum Brands tomorrow morning as well. Obviously them at the heart of it with Taco Bell.
- [40:51]
Melissa Lee
Yep. Brandon, thanks. Brandon Gomez.
- [40:54]
Brandon Gomez
Thanks.
- [40:54]
Melissa Lee
You know, we haven't said this all afternoon with Chipotle being up 6%, I
- [40:59]
Tim Seymour
thought you were going to call it a burrito blow.
- [41:01]
Melissa Lee
Blowout. It's a burrito blowout you were going to call it. Yeah, like a tradition every quarter we have to say that.
- [41:08]
Tim Seymour
Yeah. And also interesting that we've paired these two companies up. Obviously the guy used to run CMG is now around in Starbucks. And I'll talk about Starbucks because I think those, the same store sales are fantastic. I mean those are really exciting, especially for a company that was running into a wall. And we certainly were concerned about some of their input costs. Their foray into energy drinks or energy beverages is something. I mean, I always thought that's what coffee was. But I mean they're really, they're really pushing it. So I mean, I think that the marketing angle has worked. I think the operational efficiencies are still to be proven. But this growth is no disputing that brand.
- [41:46]
Melissa Lee
I mean, global same store sales up 7.99%. Yeah. And North America up 8.1 versus estimates of 6.3. So that, that is a blowout on those.
- [41:56]
Eric
I mean it's not like they're not a mature that. Right. They're not a mature company. Maybe you'd see earning, you know that kind of growth, but obviously they are. That's an incredible turnaround.
- [42:05]
Melissa Lee
Yeah. Maybe not a surprise to you, Michael.
- [42:07]
Michael Katapoulos
Now I was just checking Sunshine Coffee roaster sales and I heard that's a really hot they're up 9% year over year. So that's not so bad. You know, listen, the consumer is reasonably strong and the economy is doing well. Coffee prices are down. It's not a surprise they're doing well. So I think this makes sense.
- [42:26]
Karen Feinerman
So when you look at the comparison, Starbucks and CMG since Nickel took over, Starbucks is up 60%, CMG is down 35%. Starbucks has went from a turnaround story to an execution story. Still have a little more room to do in margins, but I'd still much rather buy Starbucks.
- [42:44]
Melissa Lee
Coming up, South Korea stumbles. A memory meltdown driving the latest pullback. But could the weakness be a buying opportunity? We'll debate that. More fast Money into. Welcome back to Fast Money. Concerns over the trade sparking a sell off in South Korea. Korea it's cost be dropping 6% hitting its lowest level since April. The losses coming after chipmaker SK Hynix failed to meet expectations for the latest quarter even though profit came in at a record. Kospi traded shares plunging almost 10%, down 23% in the past week. Are we going to look back and say, Tim, that this is a buying opportunity?
- [43:30]
Tim Seymour
Well, Samsung reports Thursday and I just kind of feel like, you know, if I'm the Cosby, I started this thing, I'm going to finish it. And I mean on the bottom and I do think that the leverage you referred to is created distorted moves. We know there is distorted moves period. But and I'm not telling you that the things that are driving the trade lower, which is the market is telling you there won't be that much demand, there will be a pullback. The world is commoditized and it's very cyclical. I think we're getting to a very interesting place to own real companies. Not necessarily with all due respect to Seagate, you know, they're a real company but I'm not talking about a memory move that was a thousand percent. I'm talking about and I am talking about Samsung which is very cheap and I think SK is ownable too. I do think you could trade off lower again because it's overdone. But and if you look, if you want to equate semis to the SMH, I think for 20 on the SMH is still a ways lower. But yeah, I don't, I think this is a moment.
- [44:30]
Melissa Lee
But to the extent that leverage on the part of the Korean investor created the frenzy to the upside and now there are all sorts of curbs on that leverage, will we never see those levels again? It seems like we won't at least in the near term mean that, that when you think about a bounce, it's not a bounce back to those highs because that froth in the system won't exist.
- [44:51]
Tim Seymour
And that's fine. I mean at some point let them grow into that. But I mean Samsung is going to report 19 fold profits year over year for 2Q. I mean I just. And by the way, Samsung's not a one trick pony. I mean Samsung isn't just a chip manufacturer. So I mean I think there's, there's an opportunity.
- [45:08]
Michael Katapoulos
We're overweight emerging markets ex China. So by nature we're overweight the chip stocks and this has been, you know, a bit painful. But it's also had a massive run up, I mean still up huge on the year. And most of our sentiment indicators are saying that this is overdone. It doesn't mean it couldn't go lower before it does bounce and fundamentals start to take over again. But you know, I think it could be a little bit more pain before you start to rally again.
- [45:31]
Karen Feinerman
To your point, the mechanical selling really cuts both ways. So if you're limiting your upside, you're capping it, you put curbs on both ways and mechanical selling begets organic selling which begets more mechanical selling. So you have to sort of wait till it gets through the cycle. I would hold back. It is a buy, it is a great company. But I would wait until this mechanical selling peters out.
- [45:51]
Melissa Lee
Up next, final trades. Time for the final trade. Michael Katapoulos.
- [46:08]
Michael Katapoulos
We like China. Earnings growth is accelerating. We think policy support is going to be there and it's pretty cheap. So China it is kimbo.
- [46:15]
Tim Seymour
Like Michael's view on China. I like bros. I think this also. How you doing bros? Going higher and I think the trends here that we just heard about are in favor for them.
- [46:24]
Melissa Lee
Eric?
- [46:25]
Eric
Yes, the VIX right here, I don't think it lives here. I think it actually goes higher quite a day today before it goes.
- [46:31]
Karen Feinerman
Stephen Mine is Microsoft and I do believe it should have been trading higher and sort of given a little bit back. It's only up about 2% but I think it should be high.
- [46:39]
Melissa Lee
All right, thank you for watching Fast Money. See you back here tomorrow at 5. Mad money to Kramer starts with right now.
- [46:46]
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