CNBC's "Fast Money" Podcast Episode Summary
Episode Title: 2025 IPO Predictions, Tariff Risks
Release Date: November 26, 2024
Host: Melissa Lee
Guests: Tim Seymour, Dan Nathan, Guy Domi, Katie Stockton, Eamon Jabbers, David Wu, Katie Rooney, Chris Raymond, Seth Rubin, Courtney Reagan

Overview

In this episode of CNBC's "Fast Money," host Melissa Lee and a panel of top traders delve into critical financial topics impacting investors as of November 26, 2024. The discussion spans President-Elect Trump's aggressive tariff strategies, the underperformance of Amgen's experimental GLP1 drug, technical analyses of market volatility, the struggles of major retailers like Best Buy, and the potential resurgence of the IPO market fueled by small-cap gains.

1. Trump's New Tariff Threats

Discussion Points:

• President-Elect Trump's announcement to impose a 25% tariff on products from Mexico and Canada and a 10% increase on Chinese tariffs.
• Potential motivations behind the tariffs: dealmaking strategy versus genuine trade disputes.
• Market reactions, including declines in Mexico and Canada ETFs and a rise in the U.S. dollar against the Mexican peso and Canadian dollar.

Notable Quotes:

• Eamon Jabbers [02:10]: "Trump may be calculating here that he can bring all sides to the table earlier using the leverage of these social media posts about the tariffs."
• Dan Nathan [06:32]: "I think it's a lot of bluster... I just don't think you're going to see too many big decisions by US Manufacturers based on these threats right now."

Market Impact:

• Despite initial sluggishness, the S&P 500 and Dow Jones closed at fresh all-time highs.
• Traders expressed skepticism about the long-term viability of a trade war, noting responses from Mexico and China signaling potential tit-for-tat escalations.

Expert Insights:

• David Wu [10:58]: Suggested that the administration might be using tariffs as leverage to renegotiate trade deals more swiftly, particularly emphasizing the strategic importance of companies like Tesla in maintaining U.S.-China relations.

2. Bond Market and Economic Concerns

Discussion Points:

• Concerns over the bond market's reaction to Trump's tariff threats.
• The U.S. faces significant interest obligations, with $1.5 trillion in interest payments expected in 2025.
• Inflationary pressures and their potential impact on bond yields.

Notable Quotes:

• Eamon Jabbers [04:47]: "I think the bond market should next year... thinking yields will go higher."

3. Amgen's Underperforming Obesity Drug

Discussion Points:

• Amgen reported disappointing phase two data for its experimental obesity drug, Maritide, showing a 20% average body weight loss at 52 weeks, below Wall Street's expectation of 25%.
• High dropout rates due to adverse events (11%) and gastrointestinal issues (8%).
• Plans to start phase three with a lower dose to mitigate side effects.

Notable Quotes:

• Katie Stockton [30:49]: "The street was looking for 25%. So that 20% reduction, [is] disappointing right there out of the gate."
• Seth Rubin [32:24]: "The data showed clearly that the drug's efficacy effect was not plateauing at 52 weeks... it's headed even higher."

Market Reaction:

• Amgen's stock fell nearly 5%, becoming the Dow's worst performer for the day.

Expert Insights:

• Chris Raymond [31:59]: Emphasized the drug's potential in the long run, suggesting that ongoing trials might demonstrate superior weight loss results.
• Seth Rubin [34:12]: Highlighted the sizable market opportunity in the obesity drug sector, projecting significant revenue potential despite current setbacks.

4. Technical Analysis: VIX and Market Volatility

Discussion Points:

• The VIX index trading below 14, indicating low market volatility, which can signal complacency among investors.
• Critical support levels for the VIX and potential implications for future market corrections.

Notable Quotes:

• Katie Stockton [18:20]: "It's around 14 and a half for the Vix and if we were to see a breakdown, we would require two weekly closes below that level to confirm a breakdown."
• Eamon Jabbers [19:28]: "The volatility index... levels are critical. I think it's going to hold."

Market Implications:

• A continued low VIX suggests the potential for complacency, which could precede future market corrections.
• Katie Stockton advised keeping "dry powder" for potential opportunities in early next year if volatility increases.

5. Retail Sector Performance: Best Buy and Nordstrom

Discussion Points:

• Best Buy reported its 11th straight quarter of declining comparable sales, attributed to macroeconomic uncertainties and consumer wait for deals.
• Nordstrom, despite initial after-hours decline, showed stronger-than-expected comparable sales growth of 4%, outperforming bullish expectations.
• Kohl's continued its decline with the 10th straight quarter of declining sales and announced a new CEO.

Notable Quotes:

• Dan Nathan [38:19]: "I don't think it's talking about weakness of the consumer... it's a lot of missteps by Kohl's operations."
• Katie Stockton [37:14]: "Kohl's... comparable sales down 9.3%. That is significant and significantly worse than the street had expected."

Expert Insights:

• Eamon Jabbers [39:25]: Suggested buying Nordstrom shares due to strong underlying performance despite price dips.
• Guy Adami [39:59]: Highlighted Nordstrom’s solid numbers and potential floor due to take-private bids.

6. Small Caps and IPO Market Resurgence

Discussion Points:

• The Russell 2000 index surged nearly 10% in the last four weeks, approaching its record high.
• Potential for a significant uptick in IPO activity, especially in tech and fintech sectors, driven by the strong performance of small-cap stocks.
• Anticipated revival in the IPO market after a three-year lull, with expectations of around 40 tech IPOs a year.

Notable Quotes:

• Seth Rubin [41:32]: "Look, I think we're going to see a real pickup in activity across the board."
• Dan Nathan [43:32]: "There's a huge backlog of really high quality companies... excited about their IPOs."

Market Implications:

• Increased IPO activity could provide fresh investment opportunities and enhance market liquidity.
• Focus on companies ready to perform as public entities, ensuring sustainable growth post-IPO.

Expert Insights:

• Guy Adami [44:34]: Emphasized the bullish outlook on equities, supported by liquidity and private equity exits.

7. Additional Earnings and Market Updates

Discussion Points:

• Reports on Dell’s mixed earnings, driven by AI investments but hampered by weak PC sales.
• CrowdStrike's earnings beat on revenue but stock declined due to full-year guidance.
• Nordstrom’s strong comparable sales contrasted with other retailers' struggles.

Notable Quotes:

• Christina Parts Neville [22:29]: "We are winning deals at a price premium to our competition."
• Guy Adami [25:06]: "First of all, it’s been a roller coaster ride... So I think you can own it here."

Conclusion

The episode of "Fast Money" provided an extensive analysis of the current economic and market landscape, highlighting significant geopolitical tensions, sector-specific performances, and the dynamic interplay between small-cap gains and IPO markets. The panelists offered diverse perspectives, emphasizing the importance of strategic investment decisions amidst volatility and evolving market conditions. Investors are encouraged to stay informed and agile, leveraging market opportunities as they arise while being mindful of underlying risks.

Disclaimer: All opinions expressed by the "Fast Money" participants are solely their own and do not reflect the opinions of CNBC, NBCUniversal, their parent company, or affiliates. This summary is intended for informational purposes only and should not be construed as financial advice.