D (2:52)

Well the story really is just about pricing leverage. Earnings were a beat. Revenue of 3 point, just over 3 billion bucks up 44% year over year, also a beat. But the real number gross margins for the quarter came in at 47%. That's up from 36% just a year ago. Seagate CEO Dave Moseley calling it a record margin performance of close to a billion in free cash flow. So that tells you customers cannot get enough product. This is a company that makes hard disk drives, the picks and shovels of AI. Not the compute side but where all the data actually gets stored, stored. Seagate and Western Digital are essentially a duopoly in the space and historically there has been a commodity market with a boom and bust cycle for this particular disk drive space, but not necessarily anymore. Seagate has pricing power it has never had before and the guide proves it. Q4 EPS of 5 bucks versus the street at $3.97 I had to do a double take. That is a 26% premium to consensus. So the read through is important too. If Seagate is raising prices, Western Digital is likely doing the same. And if you can't get enough hard disk drives, demand spills over into the NAND flash world and that's where SanDisk benefits and that's why the whole group is moving higher and after hours trading.

E (4:02)

Guys.

C (4:03)

All right Christina, thank you Christina. Parts never list. I don't know if Seagate helps to counter the open air report from the Wall Street Journal or if this is just a sideshow. But you know, in terms of all the earnings that we're going to get tomorrow, I think it'll be interesting to hear about the demand for AI too since part of the Journal report was that it is missing internal revenue forecasts but also subscriber growth targets.

E (4:28)

So I mean the market like to make a whole lot out of it. I don't know how much of it is true, but I do think we're still in fairly early innings. So the pie is still growing for sure. The pieces of the pie, the market share I think has changed. I mean, look at, you know, two and a half years ago, is it Microsoft who was way ahead, you know, with Google, and then Google was out, and then Google was in. I think perplexity had a moment in there. And then Anthropic seems to be really running away with it at the moment. But we know that could change. So you have to look at it in the backdrop of this semiconductor run, which I know, Tim, you love to talk about how bullish you are in semiconductor run has been extraordinary. And if we back up and look at and just squint, nothing's happened in today versus three days ago. But this move up to here, even with this today pullback is extraordinary. So I mean, this is. These Seagate numbers are fantastic. That kind of operating margin improvement is really impressive. And the guidance, which, why not be conservative? Is really bullish also. So it's bullish and conservative. Maybe there's a lot of good things happening. Interestingly, Seagate's biggest customer is Dell, which is unchanged in the after hours.

B (5:41)

Hmm.

E (5:41)

But that's okay. It's a smaller part of Dell than Dell is to Seagate.

B (5:45)

I didn't hear about any misstep in demand here. I heard about a misstep in terms of the competitive landscape for open air and Anthropic. Definitely. I don't know if they're eating their lunch, but in terms of coding and enterprise, they are making major inroads. And yeah, this is a valuation question for OpenAI. It's not a question of demand as reinforced by Seagate. What's fascinating about Seagate on the margin side is, is some of seemingly these revenues. The analyst community, the investor community thought they kind of understood gross margins based upon long term contracts. So they, you know, clearly some of these have been redone. Those that are desperate for capacity and product are probably willing to redo long term contracts at much more advantageous prices. So the gross margin story, demand story alive and well. I just think I like Karen talking about the pie because we know it's a bigger pie, as she said, but it doesn't mean that there aren't a whole lot of people competing for that pie. And I think that's the story, Dan,

A (6:44)

the Seagate just say this. I mean, this is a company that has pricing power now. You know, in two years ago, no, in 2022 they had like $12 billion in revenue and by 2024 was cut in half. Okay, so this is the way this Company is just, they're subjected to this, right? So right now they have that pricing power. They might be, you know, experiencing double or triple ordering. If you do see some period of digestion as it relates to demand, these guys are dead. It's that simple. They're dead. And this has happened again and again over the last 30 years. Now, you can make a lot of money as long as you're riding this train if you think the pie keeps increasing. All I can see from the open air thing is that they're missing revenue targets because fewer people now, they got to 800 million pay, not paying, but subscribers. And I think, I don't know what the percentage of paying, but it gets worse and worse. And to Tim's point about Claude, yeah, they have, you know, a coding advantage, they have an enterprise advantage. It's one of the reasons why OpenAI has shut down things like Sora that was consumer facing. They need the compute. It's one of the reasons they've given one and a half trillion dollars in contracts out there. But when you have customers like Oracle who can't actually, they keep telling you that they're fine, they're not fine. They're not going to be able to build out this capacity. Right. And so this is all, you know, it feels really rosy. It feels great right now. It is interesting that the company that just raised $122 billion at an 830 billion valuation is the one that having a hard time kind of hitting those internal revenue targets. And they are racing, as the article said, you know, to an ipo. Good luck with that. If you keep missing revenue targets internally while you're a private company. And the other thing that seems very difficult to me as they're racing towards this ipo, they're going to be going into supposedly, you know, a, you know, roadshow period is like you have your CFO saying one thing. This is like two or three times over the last nine months or so. And the CEO of the company that no one really trusts is coming out almost immediately and refuting it. Like, what, what's going on there? I mean, it just, it seems like a dumpster fire, to be very honest with you.

F (8:50)

So Seagate numbers are amazing. Karen said, Tim said, Dan said as well. And the boom and bust cycles are clear. We're obviously in the middle, seemingly in the middle of a historic one in terms of boom and the gross margins. I mean, it's extraordinary number. I'm looking at it now. 47% was 42% in the second quarter. So good for them. Pricing power. Absolutely. If the open air story, if there's any truth to it, and again, I don't know if they've refuted it or not. I mean it speaks to the potential commoditization of the space in terms of what we've seen historically. And if that happens with Open Air in the middle of this entire thing, is that sort of the cube that gets pulled out of this puzzle because they're the epicenter seemingly of this whole circular financing thing. I think we're a long way from that. But that I think is bit of a cautionary tale. Now you're not going to see it in backward looking earnings clearly, but you could start seeing it in terms of the spend going forward if companies start to ratchet back. We don't seem to be anywhere near that. But I think the open air commentary, again, if there's truth to it, it should be a little bit concerning the

B (9:49)

analyst community does what they do what they do, which is to probably, and this doesn't mean to be insulting, you have to chase some of the news flow in your valuation which is that gross margins are higher on numbers we've never seen before. And that's really the story. The question really is how much can DRAM go up between now and next year. And again this is why, you know, tactically, you know, Dan's caution is, look, it's great right now but markets tend to want to price in the future and probably should be pricing in now. I just think we have to get back to a place where the investor community is still, I think somewhat cautious in the positioning on some of this stuff. And I think there is a chase going on and I do think that there's not a question at all about I, you know, hearing about this morning being a little bit of like a deep seek moment. You know, it's, it's not, it's, it's not a question about demand. It might be a question if deep seek wasn't a question about demand either, but more about the amount spent. That's pretty interesting here, but hyperscalers this week. Absolutely. And my guess is talking about flexibility on Capex will be bullish.

C (10:58)

Right? Flexibility meaning rationing back because for every dollar they spend, they're buying less. Yes, right. I mean that's what Seagate's earnings really demonstrate, that they're able to raise prices despite long term contracts. Somehow prices are going higher and so for every dollar of Capex, you're buying less. Whatever it is, you want to measure it by gigawatt I don't know, compute power and whatnot. And so how do you think about a capex forecast that was given and reaffirmed a raise in the last quarter versus this quarter given the backdrop of higher costs?

E (11:29)

Right. Well it's got to be higher. Right. It's hard to see how it would be lower. But go, let's go back to the Seagate Dell analogy. So Dell is an enormous customer for Seagate, probably the biggest customer. Seagate is a small percentage of Dell's revenue of gel's costs. Right. So that's not exactly the same and you know the same is true for memory that but still costs are going up so I expect to see, I mean it seems to be like Google and us, they are just going full bore. I think they're going to up their capex. The one that makes me the most nervous actually is Metta because we haven't, we, we really don't have a sense yet of how this is all going to play out for them. We have much more of a roadmap for us and Google and, and I think that, I know we've seen a bunch of cuts, a few, maybe this is a year of efficiency and capex. I don't know, does that net out to something better? Cash flow? I'm not really sure that's what I'm the most nervous about. I feel best about Amazon and Google.

C (12:32)

By the way, Seagate is higher by more than 16% in the after hour session. For on all this let's bring in Gene Munster, Managing partner at Deepwater Asset Management. Gene, great to have you with us. First of all, what's your take on, on this astronomical move in Seagate in the after hour session?

G (12:51)

It's pretty clear as we're still in the second inning and I think Guy you were talking about, you know, midway through, all indications are from what we're hearing from these companies we're still early. I also agree with Dan, eventually there's going to be a quarter of reckoning with these memory companies, with the hardware companies. I just don't see that happening probably in the next couple years. And so my initial take was I think this is representative of what's going on. And what's going on is much bigger than a Wall Street Journal story. What's going on is that we're still early in this, not only the build out but also the applications that will eventually have a big impact on how we live.

C (13:30)

So you're not worried about the Wall Street Journal article in terms of the health of the AI trade, demand for AI, the ripple effect on the open AI ecosystem.

G (13:40)

Well, part of it is we don't know what the bar is. We don't know the number that they're missing, supposedly. I mean, they could be missing a doubling of the revenue. This doubling of the revenue concept is something that is the street is basically baking in right now, or investors are baking in. So that's where the bar is at. So did they have an expectation internally that they're going to grow at 150%? And they're missing that. So that was an important piece that was missing in the Journal story today. A second is in terms of the capex and some of this concern that they may not be able to meet some of these expectations is that as a cfo you probably always want to have that conversation. But also the story talked about that they have to hit these revenue growth targets and we've known that since the Oracle deal was announced last September that they have these big targets. And I'm going to bring it all together here is that I continue to believe that they're going to double their revenue this year. They'll double it again. This is OpenAI next year. But bring it all together is that at the core here we're seeing more outages of those who are using these tools today than we saw six months ago. OpenAI, I think that's a big tell in terms of what's happened with demand. OpenAI on their Kodaks product, which competes with clog code, this GPT 5.5, it is crushing clog code when it comes to the most heavy users who spend the most. So if you talk to people who are actually doing real coding on this, not just vibe coding, is that OpenAI has had a great response to what has happened with Clog code. So, Melissa, when I put all this together, I think some these headlines can kind of miss. The bigger point is I still think we're very early and this concept that this is a canary in the coal mine, with all due respect, Dan, I don't think that this is in fact any sort of indication that we're at the beginning of some sort of cresting point. Yeah.

A (15:30)

So Gene, what are you using tomorrow when for your companies are reporting at 5 o', clock, you're probably going to use an LLM, I would assume, to do some summaries of those reports. You know, so we've gone back and forth, Gene, with investors rewarding these companies for, you know, raising capex and then punishing them too. So here we are right now we got all of those numbers for 2026 when the companies reported in late January, early Feb. So Metta is expected to have CapEx up 70%, Amazon up 50%, Alphabet up 90% and then Microsoft only up, you know, about 30%. How do you think, what do you expect, you know, to just reaffirm? Do you expect any of these companies to raise full year Capex and how do you think investors will react?

G (16:13)

So you're getting to really what the core of the excitement part of this week and is what they're going to say on capex. Unfortunately we're probably not going to see a ton. I agree Karen, with your comments about this kind of inflationary piece. They'll probably hint to that. But I think that the substance of where investors question on this broader AI is what does it look like in 2027 as a point of perspective is that the mega caps grew their capex almost 80% last year. The expectations as you mentioned, are up about 60% this year. So Wall Street's looking for a little bit of a dial back in terms of that. But for 2027 it's just over 10%. They're expecting essentially to more or less hit a wall. And I think that this, your point is is accurate. Like that's what we're all going to be listening for. But unfortunately the real question and the real question about open air and like is it going to make it isn't dependent upon what's going to happen this quarter. It's are is there something fundamentally bigger going on with AI that's going to have a transformative effect that they're going to find a way to monetize and that is a dynamic question. And it's going to, they're going to have to keep reinventing themselves every year to ride that wave. And we're not going to get a good read on that this week.

C (17:23)

Jean, great to speak with you. Thanks.

G (17:25)

Thank you.

C (17:25)

Gene Munster, Deepwater Asset Management what do you think on Capex? They raise it then what good news, bad news?

F (17:34)

It seems like companies are being rewarded for it now a couple quarters, four or five quarters ago they were penalized. Now seemingly you want to see that because it suggests they're actually benefiting from it. I think another question is at what point, if at all. But I think there will come a point when instead of paying for these platforms, these platforms are going to have to pay to be on an Apple, for example, and they're going to have to pay them to be part of their consumer products. You know, the consumer service products side of the business. And I don't think we're as far away as people think competition is there. I mean, you go to Google for free, I think there's going to be a day we go to these sites for free as well.

B (18:10)

Yeah, Apple, which was up today by the way too, I mean, there's a lot of reasons why Apple might have been up on a down day for tech. But I, I believe some of what Guy is saying. I always believe in everything. But I mean, having to pay to be on, on the platform and I bring it back to the market because what's happened price wise in terms of the charts and some of the technicals is also very interesting. I mean, is Nvidia a breakout or is this a false breakout? Because, I mean, it took them nine months to get to this place where it looked like they really broke through. Micron went from 420 down to 340, is now back at 500. So again, you know, the charts to me are telling me that there's been a deliberation, there's been some kind of a view that we had to deliberate, but ultimately that we're making new highs. And I think if Nvidia is making new highs, the whole space is going higher.

E (19:01)

So what I'd like to see when they all reported give us a capex number that's likely bigger is something a little more concrete than we think. It's a great opportunity. Something a little more concrete in terms of return on invested capital. You know, if you read Andy Jassy's letter, he's clearly incredibly excited about this opportunity is nothing like it. But we don't know how does that translate. And so if you're going to be spending that much money, it would be great for shareholders, have some sense of what you think it'll turn into.

C (19:30)

We are getting some more details on the indictment of former FBI Director James Comey. Megan, Megan Cassell's got the latest developments here.

D (19:37)

Megan, Melissa. Former FBI Director James Comey was indicted today over a photo of seashells that he posted last year, something the government says threatened President Donald Trump. So Comey posted the photo on Instagram last May and it showed seashells laid out to spell 86, 47, 86 is a term used in the restaurant industry when a menu item is discontinued. President Trump being the 47th president, the indictment says a reasonable recipient who is familiar with the circumstances would interpret that as a serious expression of an intent to do harm to the President of the United States. So the first count charges Comey with knowingly and willfully making a threat to take the life of and to inflict bodily harm upon the president. And the second charges him with transmitting that threat in interstate commerce. And Melissa, you'll remember this is the Justice Department's second time indicting Comey, who has long been a political enemy of Donald Trump. The first indictment, though, was thrown out by a judge late last year.

C (20:29)

Melissa, Megan, thanks. Megan Casella. Coming up, more after hours action to bring you the results. Moving Starbucks, Visa and Robinhood and what our traders make of those reports. And speaking of earnings, some big names on the move after their reports this morning. The details from gm, UPS and Coca Cola don't go anywhere. Fast money's back in two.

A (20:50)

It's smart to always have a few financial goals and a really smart one you can set earning cash back on what you buy every day. And with Discover, you can get this Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show see terms@discover.com creditcard trading@schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com Trading for 45 years, Dish has been connecting America with the best in family, tv, entertainment and advanced technology at an unbeatable value. And that commitment continues with our new 45th anniversary special offer. Get the lowest price in satellite TV starting as low as $89.99 a month. In a world of rising costs and hidden fees, Dish stays transparent, reliable and honest, just like our founders intended. Learn more by calling 888-add-D dish or visit dish.com terms and conditions apply.

C (22:17)

Welcome back to fast money. Starbucks shares are higher by about 5% here after hours after the coffee chain beat top and Bottom Line estimates. The company also raising its full year outlook. CNBC's Brandon Gomez was listening to the company's call, which is a little less than an hour in. Brandon?

A (22:32)

Yeah, Melissa, you hit both those points. Top and bottom line beat guidance race for fiscal year 26, but the big number was same store sales up 6.2% overall, well ahead of the 4% that was expected. North America the bright spot there. CEO Brian Nickel on the call highlighting several product innovations drawing back consumers. Still, we know any weight on the consumer's wallet tends to impact this industry. So when he was asked about rising fuel prices and the consumer pullback, Nichols said, we haven't seen a lot of the macro effects trickle into consumer behavior as it relates to Starbucks. But I think we want to be cautious going forward because we're not sure how it'll play out now on the margin impact. The company's CFO spoke on North American Q2 input costs saying about half of product and distribution increases were innovation led product mix and the remainder was inflation driven by tariffs in coffee prices that they expect to moderate by the back half of 2026. Melissa?

C (23:20)

Brandon, thanks. Brandon Gomez with Starbucks again up 5%. So we are seeing progress here and that's the important thing.

B (23:26)

Yeah, improving the top line gets to the bottom line and the the guide was I think better than 5%, which was really exciting. I'm still not sure. By the way, I love Starbucks coffee. I love going there in the morning and I've kind of loved the stock for years, but I don't love it here. I do think it's a case where it's not cheap. I want to wait and see. I don't think the stock should get away from me here. And we're getting such mixed cross currents from the consumer this week. But yeah, I think things are going well under the nickel helm. I think they're getting back to basics and simplicity and so far that's showing signs of working so good for them.

F (24:00)

Beginning. I mean this is the beginning of something. Maybe because North America, the street was looking for 4 1/2% comp. 7.1% is a really good number. Even global comps better. So it suggests maybe what they're doing is right and margin improvement to valuation. Yes, Tim is right is a concern. But is the market going to say they finally figured it out and we're going to look past that. That's the rub. I don't think you chase it at 102, but at least they're showing signs of price.

B (24:24)

How's the protein foam treating you?

F (24:25)

Pardon me?

B (24:26)

The protein foam from Starbucks. Yeah. Isn't that something you like?

C (24:28)

It would be grainy.

B (24:29)

Something you like grainy.

F (24:31)

Is it grainy?

C (24:32)

It sounds like it would be grainy. Like it would be powder and into.

A (24:35)

You know what I like?

F (24:36)

I like the Metamucil. Do they sell that at Starbucks, that's also grainy.

C (24:40)

It is amazing that they haven't seen any impact on the consumer. You think of Starbucks in many parts of the country it is drive through through. And when you're paying up for gasoline, you're not going to go to that drive thru and get whatever guy gets

E (24:51)

with the foam, right? You would think so. The quarter, this is for the quarter that ended March 29th. So it does have one month.

C (24:57)

Right.

E (24:57)

Of some inflationary pressures there. And you'd think that the guidance would be conservative to take that into account. Extrapolating that one month. Still, it was all really good. As you both cite that same store sales number is fantastic. It's just going in at 42 times earnings or whatever. 40 times earnings. The bar is already high.

C (25:15)

Right. There is a lot more fast Monday to come. Here's what's coming up next.

A (25:20)

Earnings season in full swing. What we're hearing out of sectors from autos to Staples and the different takes we're getting on the consumer. Plus parting with Powell, what to expect from what could be the Fed chair's

B (25:34)

last meeting and how the global rates

A (25:36)

picture impacts the outlook for the central bank.

B (25:40)

You're watching Fast MONEY live from the

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NASDAQ market site in Times Square. We're back right after this.

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C (27:19)

Welcome back to Fast Money. Stocks down today with the S and P and NASDAQ both pulling back from records. The Dow had been higher in the early trade, but closed the day down 25 points. And oil prices jumped today. But WTI crude crossing the three digit mark for the first time in more than two weeks. A move coming amid the same surprise news today that the UAE would leave OPEC effective this Friday. The UAE is second only to Saudi Arabia in spare production capacity, a key tool used to influence prices. And some big moves from this morning's earnings reports catching our eye. Let's start off with GM topping EPS estimates, raising its 2026 guidance. The automaker also seeing a roughly $500 million benefit for the Supreme Court decision to terminate and refund certain levies paid under President Trump's tariff program. GM still down about 3% for the year. Tim, what do you make of the results?

B (28:06)

Well, these numbers were great. It's also nice to see a little give back on tariffs and it's nice to see them being able to focus on the core business and not have to, you know, just start talking about EV business. That's not so great. So EBIT beat by $2 billion and again it's a $3 billion tailwind in terms of tariffs. I think the guide is, is, is excellent. I think their ability to, to, to be able to get back to kind of this 8 to 10% on EBIT growth is fantastic. I think it's wildly cheap and I feel very comfortable owning it even here when I felt comfortable owning at 40.

A (28:38)

All right, let's do ups. And that's what I was you and your job.

C (28:41)

I haven't even gotten to ups. I thought you wanted to comment on.

A (28:44)

Oh, I thought it was like a jump ball.

B (28:47)

I didn't even know we were talking about you. I didn't even hear the name.

A (28:49)

I think you really surrounded the trade.

E (28:52)

Let's add on. Okay.

C (28:54)

Yes, please.

E (28:55)

I agree with every single thing that Tim said. And they also also had some additional revenues on star things like that autonomous vehicles. So they have some higher margin revenues coming in. I think they did a great job. North America was particularly good. I'm surprised actually given you know, their best selling line is Silverado, which is a big, you know, gas using truck. But it's impressive.

C (29:20)

Now let's do UPS. Daniel. UPS shares dropping nearly 4%. The delivery giant beat top and bottom line expectations, but it held full year guidance steady. UPS also saying it achieved $600 million in cost savings from its network Efficiency program with expectations to reach $3 billion in 2026. Shares of UPS, up nearly 5% so far this year. Did you want to do UPS then or you just wanted to change the topic?

A (29:46)

You know, I'm new to this show here. I don't know how it works. You know, I just. Here's a good example of a company relative to one of its, you know, biggest competitors that just has not been executing. So when you talk about that plan that's likely to, you know, kind of result in $3 billion in cost saves. Well, that's good at a time like this when a lot of concerns obviously are about jet fuel costs and you know, supply chains and just generally economic malaise if we do have a war that goes on longer than expected. So again, I know you guys have been talking about this name for a long time. It is the you and your junk.

F (30:15)

No, it's not Unity Soft. I wish it was the you and my junk Junk. Right, because the you and my junk junk. Yeah, ups. If our crack staff and EC can do this, and I'm sorry if they can't, but if they could put up a chart. Not a 40 year chart, Sandy, no, a chart that shows the move of Federal Express vis a vis UPS over the last five years. And you'll see for a period of time they were lockstep over the last couple of years, not so much. And to Dan's point, I think that speaks to the relative underperformance and the bad basically. I guess what's the word I'm looking for? The way they're operating their business, I think it's a UPS problem, not a, not a execution.

E (30:54)

Well, it's a structural ups problem. The union contracts are much more expensive.

C (31:00)

Right?

E (31:01)

Yeah.

C (31:02)

Let's get to Coca Cola here. So to giant jumping 4% after beating estimates on the top and the bottom lines, raising its earnings outlook thanks to higher demand, particularly for some of Coke's premium offerings like smart water and dairy brand Fairlife. The CEO noting a divergence in consumer strength with some under pressure due to inflation uncertainty stemming from the Mideast conflict. They were able to adapt though with different packaging mini cans on sale. It's single serve.

B (31:26)

Somehow offended at the 14 ounce pint of ice cream, but somehow the 10 ounce can of soda I'm good with, I probably didn't need all 12.

C (31:33)

Just enough, right guy.

B (31:36)

But, but again, listen to Coca Cola. It isn't their customer similar to a McDonald's customer. I don't know, I kind of feel like it might be and they're talking about a consumer that is engaged, that's resilient and it's, it's a tale of execution. I mean Coca Cola is, I mean they've been flawless over the last five years, actually five to 10 as they've transitioned away from the core business. They've the distributors and the margin story now is really impressive. I'm long, I stay long.

C (32:04)

Coming up, Jamie Dimon's warning the JP Morgan CEO with some stark words about global government debt. What he says it could lead to a bond crisis and how it all plays into the Fed decision tomorrow. Fast money's back into. Welcome back to Fast Money. Global rates rising across the board today. The JGB trading near all time highs. UK's benchmark bond above 5%. The move comes as JP Morgan see CEO Jamie Dimon warned that some kind of bond crisis is ahead as global debt levels rise. He pointed to risks from geopolitics, rising oil prices, wider deficits. For more on the rate outlook, let's bring in Subaru. Subhadra Japa, head of research at Societe General. Great to have you with us.

H (32:49)

Thank you.

C (32:49)

Agree with Jamie.

H (32:52)

I look at, look at it a lot and I watch it very closely. I think it's a little too soon to call a debt crisis. I am concerned in general about the trajectory for debt and deficits in the US as well as globally. I'd say the big difference is that in the US it's, you know, in some respects since we are a reserve currency, we are able to get away with a higher level of debt and deficits in countries like, you know, Japan or even in Europe, it's, it's, you know, the dynamics are slightly different.

E (33:23)

So let me ask you what is what causes like scape velocity to sort of, you know, take over what has to happen.

H (33:31)

So so far we've not really experienced that in the us. I can't go back historically and say look at a certain period. I mean 2022 comes to mind in the UK when we had kind of that Liz Truss moment when we saw, you know, the bond investors start to worry about the trajectory for debt and deficits. What I'm paying attention to and what the CBO has pointed out is 2031, when the interest on the debt is, gets to be higher than the rate at which the country is growing. That's when you start worrying about the question of debt sustainability. We're still five years away from it, but it's something that's worthy of our attention.

F (34:11)

So Jamie Dimon mentioned Paul Tudor Jones in an interview said our reliance here in the United States on the equity market is historic. And his concern is in terms of like GD market cap of the 5 Wilshire 5000 to GDP is at levels we've never seen before. He thinks that could create a bond problem. And he laid it out pretty interestingly on top of what Jamie Dimon was saying. So it's hard in my mind to figure out how rates go lower despite what the administration wants.

H (34:40)

Yeah, I think you're absolutely right. I think it's very hard to see a scenario where rates are going to go lower. You're looking at much higher inflation, much higher sticky inflation for a longer period of time. There's no real willingness to address the debt, debt problem. We're not going to be raising taxes anytime soon and we have no easy way of growing out of our debt. So in that sort of context, I think I would expect interest rates to remain high or at least in this kind of range for the foreseeable future.

B (35:08)

Subhadra, how about sovereign versus credit? And all we hear about also is a private credit dynamic. So which of these two, a fast money game would you rather not own? I mean, where are you more concerned? Is it the sovereign debt market? I hear you talk about a timeline on sovereign, that various things could happen. This could take some time. Compare the credit world to the sovereign debt world.

H (35:36)

So both of these are very, very large markets. Right. So you have to pick your credits and you have to pick your sovereigns. You know, in the credit world, if you look at a lot of the credit spreads, IG or even some of the, the, you know, high yield names, I mean, you are starting to see some, some, some pressure in spreads. I mean there's been a lot written about, you know, private credit. Again, it's, it's hard to really think of that as a systemic concern that we should be concerned about in the credit markets. And you know, Jamie Dimon also pointed out that it's been a while since we had a credit type event. Why? Because we've learned from the financial crisis to not, you know, kind of repeat the mistakes of the past. But the question is whether there are new risks that we should be more aware of. And that's what I'd be paying more attention to.

C (36:22)

Okay, so shorter term. Subhaja, I read in the notes that you, I mean the last time you were here you were sounding the alarm on stagflation. And your concern about that is even greater today versus when you were here last. At the same time Equity markets are at record highs. So can we be in this environment where stagflation is a true concern, but the equity markets are at all time highs?

H (36:47)

That is a fantastic question. You hit the nail on the head because that's exactly what I'm grappling with. Because there's definitely a disconnect between what you're seeing, the signals you're getting for the bond market and the signals that you're getting from the stock market. One of the markets is not, not giving you the right signal. If you look at it sort of independent of each other. It does feel like, you know, the equity market is looking at valuations and the bond market is looking at all the other risks, which is inflation, debt, you know, the dollar, a whole bunch of other things that bond investors worry about. But there's definitely a disconnect between these two markets. I still think that stagflation risks are rising, especially in an environment where oil prices are heading higher, not lower.

C (37:29)

So the implication, I'm not trying to get you to make a stock market call is that we are overvalued here. We're not pricing in the risk of stagflation in equities.

H (37:39)

So I'm not an equity strategist, but I mean, I think that that's, you know, that definitely feels like there's a disconnect between what I'm seeing in the bond market and what I, what I see in the, in the stock market. Higher bond yields, sustained level of inflation. The Fed keeping policy on hold is going to have an impact on growth. And stagflation is kind of the scenario that the Fed is least prepared to deal with from a policy perspective. So that again is something that we should be concerned about. And we're looking at a scenario where there's not much the US Government can do on the fiscal side to stimulate the economy if we do have a meaningful downturn. So a lot of these confluence of factors has the bond market worried, but not the stock market.

C (38:23)

Great to speak with you. Thank you, japa. Coming up after hours action in the financial space. Visa and Robinhood both on the move after reporting the numbers and details out of the names when Fast Money returns. Welcome back to Fast Money. Visa higher after hours of payments giant jumping thanks to a beat on the top and the bottom lines. Visa posting earnings of 331 a share for the quarter. Total revenues of more than $11 billion year over year. Payment volumes were 9% higher. Service revenues up 13%. Operating expenses dropped by about 4%. You know, it's interesting because it's a read on what is going on globally. Cross border was, cross border was huge.

E (39:05)

That's a big margin for them. So that, that sort of bodes well for Tim's Airlines.

F (39:10)

Right?

E (39:10)

I mean that customer, the transaction per the, the spend per transaction also seemed to be higher. So that customer is still out there and they're flying probably some premium something or other.

B (39:22)

Yeah, that consumer is okay too. And just again, we had a chance to get a snapshot of what Iran has looked like on the consumer here. And it's okay. They're also buying back another $20 billion of stock. I mean this is an ATM machine. I mean they're printing cash and they're buying back stock and that's earnings accretive.

C (39:40)

Let's get now to Robinhood earnings. Shares of the trading platform down after Ms. Street estimates. Mackenzie Segalos has been listening to the conference call Mac.

D (39:47)

So Mel Robinhood missing on both the top and bottom lines even after LZEG lowered estimates marking its second straight revenue miss and its first EPS miss since October of 2024. Now shares briefly came off lows as CEO Vlad Tenev opened the earnings call with Trump accounts saying that the program could put Robinhood in front of 60 million eligible children. Though the company is raising its full year OPEX Outlook by $100 million to build it, management's broader pitch on the call was really diversification beyond trading banking up fivefold since the last print gold subscribers hit a record and 10 of also pointing to prediction markets and private market access as bright spots, including adding open air to its Ventures fund last week. But shares have been sliding over the course of this call as investors really refocus on the core quarter trading. Revenue missed with options, equities and crypto all coming in light. Crypto the clearest drag down 47% from a year ago. Robinhood CEO Vlad Tenev on our air at 9:30am tomorrow to break down the quarter.

C (40:49)

Mel, Mac, thanks Mackenzie Seagalos. And of course crypto. Huge component, huge revenue source of Robinhood. That trading was down, no surprise, very sharply.

A (40:57)

Yeah. And we did have some volatility in the quarter. Right. And so it just kind of tells you a bit, little, little bit maybe that, that buy the dip mentality kind of wore off a little bit in March. And you know, one thing you know about these event contracts, I mean it probably is sucking activity right out of some more speculative trading, whether it's options or crypto that sort of bounce from

F (41:16)

66 to back 83. So this is a 50% retracement of that move. I don't think it's disastrous. I don't think valuation is ridiculous. But people, you can understand why people are selling the stock on the back of that bounce. It should hold like 70, 24, which is where we are right now.

B (41:30)

They gave these operating numbers already there in the market. The street downgraded them going into the number despite the big move. That was just a growth market move. I think you're buying the weakness not tomorrow, but very soon.

C (41:39)

All right, coming up, industrial charting. What Carter we're seeing store for Archer Daniels Midland after a big run this year. And some big news from the chartmaster. Got the lowdown next on Fast Money. Welcome back to Fast Money. Food processing company Archer Daniels Midland has seen strong gains over the past year up more than 50%. And the Chartmaster thinks the appetite is still growing for this name. Charter worth of worth charting is here to lay out the technicals. Hi Carter.

I (42:10)

Hi there. Let's get right to it. So this is a follow up report from a grains report done on Sunday night. And we thought we'd do ADM5 charts. Let's get to it. We know the Stock was basically 30 bucks Covid low went to 100, gave it almost all back, hit 40 and has been turning ever since. Let's look at the next chart and put some annotations in. Basically there are phases and we try to be on the right side of trend if you can. Bull phase, bear phase, new perspective, bull phase. Let's annotate it another way. It's lived inside the channel, right? Going well, going poorly. And now going well again. Two last charts. One way to draw the lines. You can call it what you want, but it's what a reversal formation is. Head and shoulders, bottom and or final chart. You can call it a cup and handle. But any way you slice it, to my eye headed higher. Not necessarily back to old time highs. But here we are in the 70s. I think you get 8085 out of it.

C (43:01)

All right, Carter, why don't you come on over to the desk because we've got some some big news that we want to talk about. Carter has actually launched his first ETF today. The Worth charting Options Income ETF ticker. Congratulations on the launch the fund. It's a unique approach here. So how does it work?

I (43:20)

It is. It's trying to take advantage of selling premium. And we know that basically if you look at all short term options, 20 days or less for all stocks, all cuts and call, they Expire, you're talking about 70% of the time. 75% expire, worthless. If you add a few criteria, no biotech, guess what the numbers jump to like 75%. The biotech does big things. If you eliminate small cap stocks, only traffic in big stocks, it goes to about 80, 85% because you don't have M and A risk, right. No one's buying out Oracle, no one's buying out AT&T. And then if you add another layer where you only try to sell premium if it's not just out of the money, but out of the money by 10% or more, you keep getting more and more higher numbers expiring worthless. So we want to be on the right side of that math. This is selling premium short term out of the money options around large cap stocks and ETFs. They're cash secured. All money sits in T bills.

C (44:12)

And so I think the interesting thing is you're doing this after that either gap higher or gap lower. So you never get caught with that big.

I (44:21)

You always get nothing. There's no free lunch. Right, but, but the point you make is we look to act after a stock has gapped up or down 10%. The biggest reason the stock gaps up or down is because of earnings. It's the one thing that. Cause look what we were just talking about, you're going to look at later. This one's going to be enough. Robinhood. This will be done after stock is gapped up. There's a lot of premium in the calls and so you can sell things that are further out of the money and take in a nice credit. And then underneath, typically after a stock gaps up, it's gapped up for a reason. Because the fundamentals were good. It's time to give that all back in the 15 days until expiration short term out of the money after a big news related event to eliminate the news related risk.

A (45:01)

All right, Carter, you are the chartmaster. Everyone knows that how important are the technical inputs because you obviously scan thousands of stocks each week. Are you also scanning give us a sense of some of the other than what you just.

I (45:14)

It's just that we are looking for a volume crush moment after something has been rerated higher based on news in a short period of time. Is it going to give back all of the positive price action because of the news or is it going to follow through? Momentum is powerful. You get a lot of follow through group sometimes. But we're trying to manage that by having wide, wide strangles.

F (45:33)

Is there a place where you're not getting paid enough volume wise to put on this. Is that factored in a lot of

I (45:39)

the ones we look at, you know, we say okay, this is about this seems right. There's not a money in it. You know, just you have to have a certain return that will come. Say, because they're not all going to work. Some will be wrong. You have to exit those trades and so forth. So you need to have enough of return on an annualized base. These are 15, 10, 15, 12 days. But you rinse, repeat, you don't. This is the season for it. Earnings are what we're looking for, right? That's the key.

C (46:03)

Carter, great to see you. Congratulations on the launch. W RT is the ETF up next? Final trades, Final trade. Carter Braxton, worth sticking around.

I (46:19)

Daniels by it.

B (46:21)

Tim, congrats. Card on the etf. Hopping like bunnies.

E (46:23)

GM Karen, huge day of earnings tomorrow. I'm going with the girl that brought me Google.

A (46:28)

Yeah, Apple words Thursday. That was interesting to me.

B (46:33)

I'm guys Guy, guy. Big one out of say Tim.

F (46:36)

Yeah, we'll take slp.

C (46:40)

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