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CNBC's "Fast Money"
A Housing Revival As Mortage Rates Drop… And Meta’s Nuclear Deal 1/9/26
00:43:21
Mortgage rates dropping to nearly 3 year lows, as President Trump announces he’s ordering Fannie and Freddie Mac to buy $200B in mortgage bonds. The impact on housing and rates, and what the moves mean for affordability as would-be buyers sit on the sidelines. Plus Meta inking more nuclear deals, as the tech giant looks to power its AI ambitions. The names they’re teaming up with, and what the data center demand could look like this year. Fast Money Disclaimer
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- [00:00]
Melissa Lee
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities, and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, Member, SIPC what made you confident that you could do something that hadn't been done before?
- [00:35]
Diana Olek
I have no fear of failure.
- [00:37]
Melissa Lee
Trailblazing women, changing the game One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta.
- [00:51]
Julie Beal
Think big to accomplish big things.
- [00:53]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday. Wherever you get your podcasts.
- [01:02]
Tim Seymour
Live in.
- [01:02]
Melissa Lee
The NASDAQ marketsite in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight, a housing revival. Homebuilders flying as a 30 year mortgage falls to its lowest level in nearly three years. What the drop will mean for buyers waiting on the sidelines and how the Trump administration is continuing its push for affordability. Plus a data center surge. Meta signing a big nuclear deal help fuel its AI ambitions. The names powering the push and how the data center demand could grow in 2026. And later, an evtol takeoff by n like Joby and Archer are soaring this week. Novo's prime pill, how Amazon is bringing the weight loss pill to customers and Google nearing a milestone. The big number and where the traders see the stock heading from here. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Fireman, Steve Grasso and Julie Beal. We start off with that big drop in mortgage rates. A 30 year falling 22 basis points to its lowest level in nearly three years. This is President Trump announces he is ordering Fannie and Freddie Mac to buy $200 billion in mortgage bonds. The drop in rate, homebuilder stocks soaring. Toll brothers Lennar Pulte and Dear Horn all rallying on the drop in mortgage rates. Let's get to Diana Ola. He's got all the details behind these moves. Diana.
- [02:15]
Diana Olek
Well, Melissa, there were all these projections last night about what buying all that NBS would do to mortgage rates in the future, but we really didn't need to wait. Rates moved lower just on the news of it all, the average as you said on the 30 year fixed dropping 22 basis points to 5.99%. It hasn't been that low since the start of February 2023. All that according to Mor Daily and it started last year just over 7%. So that's a big change. It did however, I want to note, bounce back a little bit this afternoon just over 6%. That lifted the residential housing sector, the home building ETF ITB up over 6% of course including names like Lennar Pulte and Dr. Horton. Even home remodeling names like Sherwin Williams, Home Depot and Lowe's. And take a look at Open which will buy your home. It has been super volatile lately but a big lift on this news today. Now we're already see MBS pull back as I said a little bit from this morning and we don't really have any idea when and how this bond buying will happen. But I also want to note something that kind of got lost in the shuffle of today's news and that is that we finally did get some housing starts data which we haven't seen since before the government shut down. So in October, single family starts were down nearly 8% year over year. And building permits which are an indicator of future construction, they were down over 9%. But apparently the stock starts didn't care so much about that.
- [03:36]
Melissa Lee
Melissa, Diana, lower mortgage rate is fantastic but typically home prices go higher when rates go lower. So how do you think this shakes out and impacts affordability?
- [03:47]
Diana Olek
Yes, they do, absolutely. I mean just look back to the pandemic where we saw mortgage rates drop to record lows and in the course of three years we saw home prices jump over 50% and they're still up over 40% since they were before. So I mean yes, they always put a floor on prices and cause them to rise. Prices had been easing in the last six months which was helpful to the market. This is probably going to help some of those first time buyers on the edge who might have been able to save $100 or $200 on the monthly payment. But as I spoke to Ivy Zellman today, you know her noted analyst and she was saying it's not so much that 100 bucks on the mortgage payment, it's really qualifying for a mortgage. And she says a lot of folks now can't even qualify at 4.99% rather than 5.99. So you got that problem as well.
- [04:31]
Melissa Lee
Karen has a question.
- [04:32]
Karen Fireman
Yeah, so $200 billion and we were just trying to go through the math of, okay, what's the denominator of, is it close to $0 trillion of mortgage backs out there?
- [04:42]
Tim Seymour
I don't know.
- [04:42]
Karen Fireman
If you take away what's on the fed balance sheet, 7.6 trillion. So it's not that giant of a buyback if we liken it to a stock. And how is it going to be done over time and over what part of the curve, how does it, how is it going to work?
- [04:59]
Diana Olek
Well, so those details we don't have, as I just said, we don't know when they're going to start doing it. We don't know how long they're going to do it for and over what period of time. But you're right, $200 billion sounds like a lot. The way $100 billion worth of MBS trades every day, that's not now new money coming into the sector, but that is how it trades every single day. So it's not nearly as much as came into the market. When the Fed started buying MBS at the start of the pandemic, that was many billion dollars more. They were buying $25 billion a month. And that went on for quite a while. So you're not going to see rates drop down to 3% like we did then, but you are going to see them somewhere, maybe in the high 5% range. But again, these rates depend also on where the 10 year is going, where the rest of the economy is going. It does help when you buy MBS for sure, to bring rates down, but that's not the entire equation.
- [05:48]
Melissa Lee
And just to dig into the move in the, in the homebuilding stocks, Diana, remind us what level homebuilders are buying mortgages down to, because this drop is just, you know, as much as you can close that gap. That's great for the homebuilders.
- [06:01]
Diana Olek
Yeah, so that's interesting. They are already buying them down into the 5% range. So it's not a lot of difference. It might, though, help the builders on their margins because if they don't have to buy them into the 5% range, that gives them more money back. So that's another boon to the builders who had seen shrinking margins. And again, Ivy Zellman also noted that. She also told me, you know, for a lot of potential home buyers who don't know that the builders buy down mortgage rates, this could get them off the couch and out to a builder to talk to them in the first place. So that could help.
- [06:28]
Melissa Lee
All right, Diana, thank you. Diana Olek, as Ann had mentioned, there's a lot we don't know. There's a lot we don't. We don't know how it's going to happen, when it's going to have, if it's going to happen. Is there a trade in your view here?
- [06:40]
Tim Seymour
I think the trades in Home Depot, I don't think it's in the homebuilders and I would be cautious here. I think these are headlines that are fantastic headlines. Affordability is what seemingly we all want for the housing market and I do think it's going to be difficult structurally to change that. It's a combination of really an income gap, a supply side dynamic that does not meet those folks. I get back to Home Depot though, and this is a stock that around 350 seems to bounce, seems to have found a floor technically. But more importantly, I think the expectations in Home Depot are extremely low. They've guided for comps that are more or less flat, maybe down 1, up 1. Home improvement as a share of wallet. Apparently we're at 30 year lows. So I think there's an opportunity and there's a belief that there could be another cycle of just kind of a remodeling. They're pro business, we know, so I think there are different ways to play it. I also just want to folks at home take a look at that XHP and look under the hood, the, the top 10 stocks. There's about three homebuilders in there. The rest are Trane, Masco, Johnson Controls, you know, Home Depot, Lowe's. So it's not necessarily buying the homebuilders when you buy that etf.
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Karen Fireman
So as I own Home Depot and Lowe's, I feel like this is a little lucky, more than fully deserved. But I think the other thing it does do if rates do move is always talk about that embedded loan, right? That mortgage that people have, they're so cheap. Steve always talks about you don't own a home, you own a mortgage. If you narrow that gap somewhat, then maybe you start to get a little more supply and that would help as well. I understand Trump administration trying to do anything to help affordability.
- [08:13]
Steve Grasso
Well, you have to look at it this way. Most people have a mortgage rate that's below 50% of the homeowners right now have a mortgage rate below 4%. So the only people that are going to be motivated to do this are 28%, basically above 5%. So I think that there's a lot of percentages, a lot of wonky data here, but I don't think it's Going to be a mad rush for homes. If the rates come down like it was with the pandemic, you're probably only going to have a third of the people trying to buy a different house or a different mortgage mortgage.
- [08:45]
Melissa Lee
Still, even a little movement here for the sector, Julie, could, could mean a lot because for a long time it was viewed that this is, you know, there was a lock here. We didn't know where the 10 year yield was going to go. We didn't know how that was going to impact mortgage rates. And here we have, you know, this impetus by the administration to directly hit on how you can massage mortgage rates to the best that they can here. And so, you know, that there is, I don't want to say a put, but you know, there's a real force in this administration, they want to do this.
- [09:14]
Julie Beal
Yeah, I mean, I think clearly it makes sense to be able to be motivated towards helping affordability. And I think structurally the biggest issue is we just don't have the depth of mortgage buyers out there and that makes it really difficult to really lower the rates in any kind of meaningful way. We're getting closer to the normal gap between what you see on Treasuries and what you see on mortgages. But it's still pretty high. And that's just a function that the market is really structurally different than it was before the gfc. And you know, I think this is a good first step.
- [09:44]
Melissa Lee
Right.
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Julie Beal
But I agree if we think about this in buyback terms, it's pretty small relative to the overall pool of the market. What the problem is, is really just structurally we just need way, way, way, way, way more homes, way more than we have. And I think any action towards that, towards improving the ability for people to actually build homes is going to be much more meaningful than doing a little buyback right here.
- [10:09]
Melissa Lee
There's a really interesting interview this morning on Money Movers with the co president of Pretium. Basically it's one of the largest firms that owns homes in order to rent them. And his point was that most of his renters, they would not qualify for a mortgage. So there's sort of a. We want to make housing more affordable, Tim, but at the same time people may not either have the ability to or want to buy a home here and that there's a real market for renters.
- [10:35]
Tim Seymour
There's a, there's a huge market for renters and we can see that in single family home and where rental rates are not coming down, they're going higher. And the question is, is that a function really of affordability. And I think it's a bit of both. I also think, I think that the headlines here, leaving aside, you know, what would obviously be headlines that are supposed to be politically expedient, but the dynamic here is the first time homebuyer is a seemingly a younger homebuyer, someone that is really the one I think we're talking about on some level. And that's the case where I just think both demographically and socially and culturally, I'm not sure it's as much of the American dream as it used to be. I'm not sure because that's not me. But I do think in talking to a lot of young people, I don't think it's just about a lack of affordability. I think it's about a freedom. I think it's about an efficiency. And I'm not sure you're going to change that.
- [11:22]
Steve Grasso
But the lack of affordability, wouldn't that help keep home prices lower? Because the affordability is not there just yet. So you don't have the wages are not improving to the same extent that home prices have accelerated in the last couple of years. So you're not going to get that feeding frenzy on buying homes. So you could actually have a drop in mortgage rates now. And you're not going to see the appreciation in home prices really.
- [11:49]
Tim Seymour
Because it's the affordability.
- [11:51]
Steve Grasso
Because, because everything you just said, right. It's a renters market. You could see rents, you could see renters pile in. But to be buying homes at this level, I think the affordability is still question.
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Tim Seymour
It's the people may or may not the people that have credit. If, if, if interest rates drop, housing prices are going higher.
- [12:09]
Diana Olek
Yes.
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Tim Seymour
And what we're actually seeing is housing prices are starting to drop because the velocity of that market has dropped so much because of higher rate mean. New York City's, you know, an example of a market I know pretty well. And so it's a function of a lot of different things in New York City. But, but housing prices have really come down in the last six months and it's not a function necessarily of what's going on politically here. It's a function of at this point, rates being this high for this long, inventory has sat around and I think this is happening every how much lower and I think it's going to continue.
- [12:38]
Steve Grasso
Sorry, how much lower would rates have to go? My point is this. Yes, the inverse correlation exists. What my point is we're not going to get, we're not going to get mortgage rates to the 2 and a half percent or 3%.
- [12:50]
Melissa Lee
At some point people have to move. I mean, yes, people will have to 28% come down enough for them to.
- [12:57]
Steve Grasso
28 becomes a two bedroom. 5%. 28% of home buyers or existing homeowners becomes unlocked around 5%. 5, 5 and a half more years.
- [13:08]
Tim Seymour
When those these 10 year iOS run out. I mean, but even the old, it.
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Karen Fireman
Doesn'T come all the way down and you're still, you still have a below market rate mortgage like the spread now since all right, I got to give up my mortgage. I don't want to, but yeah, but.
- [13:21]
Melissa Lee
It'S time to go. I got, I have a giant house and it's only me. Like there's only so long you're going to live like that anyway. For more on the administration's affordability push in the markets, let's bring in Mike Schumacher, head of macro strategy at Wells Fargo Securities. Mike, great to see you here on set. This whole theme of affordability, it's sort of the through line right now in terms of the actions from the Trump administration in recent days. Do you think that impacts, does that impact your view of the markets about, you know, the robustness of consumer spending, of corporations, confidence, anything like that?
- [13:52]
Mike Schumacher
It helps a little bit on the margin, but it's not a massive impact as far as broad macro markets. But I do think it's a good point. When you think about the mortgage market, the housing market, it's segmented and it's all well and good to talk about people having mortgage rates at sub 3. But think about people who took out those loans. They were probably, now they're probably 40 to 50. So think about the new buyers, new borrowers who are 30, 35. It helps them. So it helps them a bit. Helps politically. Does it really drive treasury yields? Not too much, but still, I think on the margin it helps a little bit.
- [14:22]
Melissa Lee
But on top of this, there's also stimulus, there could be stimulus checks coming to Americans, but certainly there's going to be tax refunds and that should all help. Does that inform your view of the markets?
- [14:33]
Mike Schumacher
It does. And that's actually, that was baked into the one big beautiful bill. So that's actually coming online now with tax refunds or really lower tax payments. That's going to happen pretty clearly. What is interesting though, in addition to that. So that's pretty well understood, I think. But you also have to factor in it's an election year now. It seems like it always is in the US but now it's Getting real, is Congress really going to spend a lot more money? No. So you get this one big burst of stimulus coming up in the next three to four months, then it's probably kind of a desert for the next year or so. So I think unless there's a massive downturn, Congress will not step in to help out.
- [15:05]
Tim Seymour
Mike. So the dynamic with the Fed, you think they're kind of on hold here and. Or articulate what you think the view is and the Fed relative to other central banks around the world and what that means also just kind of dollar dynamics, rate dynamics here, because I get the sense that the stock market is, is pretty jazzed up by the prospect of somewhat lower rates, somewhat weaker dollar, and that's a great environment for equities.
- [15:30]
Mike Schumacher
Yeah, really. That's basically our core view right now, Tim, is the Fed would like to cut a couple more times, but it doesn't have to be now. Is it going to be this month? I'd be shocked. The market's pricing less than a 5% chance of a rate cut now. It's probably 10 to 15% a couple of days ago. So the market said, no, no, not going to happen now. Could they go in March? Could they go a bit later in the year? Yes, I think that's right. But they need to see some data that's actually clean. The data this morning was anything but total mess. CPI is going to be messy as well.
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Tim Seymour
What do you make, what do you mean by messy?
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Mike Schumacher
Well, you had jobs actually that were down relative to expectation, not good. Unemployment relatively good. So whatever you wanted to think about that you could take away from it. It didn't change anybody's view about anything. And CPI is probably the same deal. So I would say the Fed has to wait another month or two until it gets a pretty clean slate of data. And it can say, yeah, I can actually look at this, I can pop it into my spreadsheet, I can do a nice chart here on cnbc and I can see how the economy is actually evolving. But until we get another month or two out, there's really not much the Fed can do. So I think the Fed would like to cut, but not just yet yet. So whether it's two more times, three more times, not really sure, I think that's still pretty likely. Not a given, but that's our base case.
- [16:39]
Karen Fireman
So if the Fed sort of on hold, let's say for the short term, is your view of the market positive because you think earnings will go up, multiples will go up, both. How do you Think you get?
- [16:49]
Mike Schumacher
Yeah. As far as the equity market goes, I'll defer to my colleague oh Song. He's bullish basically for an earnings call that's really his main rationale. But if you think about the overall environment, the story really Tim just painted it sounds okay for risk.
- [17:01]
Melissa Lee
Risk.
- [17:01]
Mike Schumacher
We were on a call yesterday talking about volatility which I think is a pretty good indicator and if you think about market after market volatility is a really low so just think about implied volatility as a price of insurance. The VIX is super low. Foreign exchange volatility is really low down to less than 10th percentile. Most currencies interest rate volatility was kind of a laggard. It's crashed down over the last few months. What that tells me is investors are saying we're pretty comfortable. Are they overconfident? Maybe, but probably not quite yet. But still I think it's telling us that people are pretty sanguine about taking risk right now. They're taking more of it as far as I can tell. Karen.
- [17:38]
Melissa Lee
Michael, great to see you. Thank you. Michael Schumacher, Wells Fargo. It's interesting this sort of dovetails with what Mandy, she said from CBO yesterday and that is overall volatility is going down on the index level but individual stock volatility is going higher.
- [17:51]
Steve Grasso
Yeah, I mean there's going to be a pick them market right now and to Karen's point if you wind up having earnings beat and we keep going forward with this with the big beautiful bill we have immediate expenses. We have what ran GDP was capex spend. So if you have immediate expensing capex spend is probably going to hang in there for the foreseeable future. If that hangs in there then the economy hangs in there and to your point stimulus checks that are out there, people are going to be spending that money. The economy probably holds in unless we have a real debacle when it comes to earnings in the first two weeks.
- [18:24]
Melissa Lee
All right, meantime the market is on 4 trillion dollar watch Alphabet's market cap getting closer to that milestone. The tech giant hitting another all time high today. Karen, this must make.
- [18:35]
Tim Seymour
How's it feel?
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Karen Fireman
It's good, I'm happy about that. No, I mean the only thing I don't like and I said about banks, I say about this, you know we're going to have earnings in a few weeks.
- [18:46]
Melissa Lee
Weeks.
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Karen Fireman
It's been an enormous run. I do think they're hitting on every cylinder and I think we'll start to see a little bit more of that. But how much of that is priced in already? Some. It's not crazy expensive. I am sort of hoping that this year they break out Waymo in a way. So YouTube is its own line item. Waymo is not. I'd like to see that. If we had some more clarity there, I think that would be good for the stock.
- [19:12]
Tim Seymour
I think if you look at what's going on for the market overall, so, you know, the MAG7 performance, call it even, just the triple cues relative to other parts, whether you're following small caps, whether you're following equal weighted. So RSP versus I. The QS are up 1% on the year. Small caps are up 4, 4 and a half, 5. You have a dynamic here where I really do think this barbell is working. And I, you know, I'm sure I said this in the start of 25. I might have even said it in the start of 24. The oxygen that was choked out by the top seven or eight stocks in the world. I really think you're now seeing the kind of broadening and it looked to industrials, look to health care, look to different parts. We've had this move in banks. Retail is still trading kind of relative to Lowe's, all the way back to, you know, four years ago. I think the market is set up for a lot of moves in the stuff that wasn't. Google's numbers are going to be great. And I think Karen's right. I mean the different pieces of that holding company that we call Google, it's starting to get rewarded too. But the broader market is the story.
- [20:11]
Melissa Lee
I mean, to Tim's Mag seven point, Julie, Google's the one. I mean, if you take a look at Microsoft chart, Meta's chart, not good. And then you have Google being the real standout here. So it seems like within the Mag 7 there was somewhat of a rotation.
- [20:25]
Julie Beal
Yeah, absolutely. You can see Amazon looks absolutely left behind by comparison. And if you kind of rewind the tape at the beginning of the year we were all kind of looking at Google is dead because how are they going to get through this existential crisis of generative AI? And I think what they've demonstrated is they can use AI to grow their business and they've demonstrated incredible competence at building their own chips, which means they're in charge of their own destiny and an ability to create models that are as good or better than what is the frontier. So I think that they've just demonstrated execution at a level that pretty unique. And I think that's normal that you would expect that these things would start to decouple from each other because they do have different drivers. They are different businesses. They're benefiting, but they benefit in different ways. Right. Metta uses AI in a way to make their own business better. Google is selling the AI. So it's just different for all of them.
- [21:18]
Melissa Lee
All right, coming up, oil CEOs head to the White House as tensions from Venezuela to Iran shake up the world's energy markets. What the Trump administration has planned for the industry next, plus mining for a merger. Rio Tinto and Glencore rekindling talks after a failed deal in 2024. Don't go anywhere. Fast money's back in 20 to.
- [21:37]
Tim Seymour
This is fast Money with Melissa Lee right here on cnbc. Comcast Business helps retailers become seamlessly restocking, frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become the patient scanning data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast Business is powering the engine of modern business powering possibilities.
- [22:13]
Melissa Lee
Restriction supply not every sale happens at the register. Before AT&T business Wireless checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time. Sometimes.
- [22:39]
Tim Seymour
AT&T business Wireless connecting changes everything.
- [22:44]
Melissa Lee
So here's the thing with homemade meals. Eating them is great, but all the chopping and measuring and cleanup, not so much. With new one pan assemble and bake meals from Blue Apron, you get all the flavor of homemade meals with a fraction of the work. Just assemble the pre chopped ingredients, bake in the oven and enjoy shop, assemble and bake@blueapron.com get 50% off your first two orders with code apron50. Terms and conditions apply. Visit blueapron.com terms for more. Welcome back to Fast Money. President Trump saying oil companies will spend at least $100 billion in Venezuela with the US protection as execs from some of the biggest companies meet at the White House today. Eamon Javish has got the details.
- [23:29]
Tim Seymour
Eamon hey there Melissa. Kind of a lengthy session in the East Room today between President Trump and these oil CEOs as the President sort of laid out his vision for Venezuela and what he hopes to get from those CEOs. But you know, maybe a little bit of ambivalence in the room among the CEOs. I want to play you a sound bite here from Darren Woods. He's the CEO of Exxon Mobil. And I think this kind of captures some of the reluctance and some of the, the conditions that the CEOs think need to be met in Venezuela in order for them to go into that country. Take a listen. In Venezuela today, it's uninvestable. And so significant changes have to be made to those commercial frameworks, the legal system. There has to be durable investment protections and there has to be a change to the hydrocarbon laws in the country. We're confident that with this administration and President Trump working and hand in hand with the Venezuelan government that those changes can be put in place. So woods there laying out his concerns, saying Venezuela today is uninvestable. That's clearly not what President Trump was hoping to hear. But then also saying, you know, look, we think this administration might be able to get there down the line, but clearly signaling a sense that they're not willing to go into Venezuela unless all those conditions are met. Melissa, one other thing to flag for you from this session on Greenland. The president was asked about that again and he said we are going to have to go in and do something on Greenland, whether they like it or not. He said we could do this the easy way or the hard way.
- [25:00]
Melissa Lee
Melissa hmm. Eamon thank you. Eamon Javers. I'm going to just go to oil right now. In terms of Darren, what's interesting that, you know, he made those comments. Remember, Exxon assets were seized back in 2007 in Venezuela. So they really had a terrible experience in the country. And when they say the hydrocarbon laws have to be changed, they speak from firsthand it experience in terms of investing there and then not having their investments paid off.
- [25:27]
Tim Seymour
Exxon has a very strong stomach about investing in difficult places. So I would listen to that strongly. I also think that we've heard about the timeline here for getting stuff to market. I just think the integrated oil majors look at their core businesses and they, they probably see a lot more opportunity in midstream. Also in gas, nat gas places where the market's actually tightening. I will say this, though, about the price of Brent and even the share prices of some of the folks that are not Chevron or people that are seen to have the pole position, I think they trade great given the dynamic of where we see supply potential, where we've actually seen the oil price hovering around a long time. And I think that's very interesting. From a trader's perspective and an investor's perspective because I know the big integrators can make those div payments.
- [26:13]
Steve Grasso
These companies were there when it was the most dangerous. To your point, it's going to be less dangerous now going forward. The United States will give them security with security, defense promises or guarantees. I think that the large integrated names.
- [26:27]
Melissa Lee
How much longer is Trump going to be in office?
- [26:30]
Steve Grasso
So do you think that no one.
- [26:32]
Melissa Lee
I don't know. No, I don't. I don't. I'm just saying that you don't know.
- [26:36]
Steve Grasso
Trump did nothing on MBS and the market ran. Trump did nothing on mbs. It was just a headline yesterday. So these companies implement though. But these companies will run, put in infrastructure. Not one MBS was purchased, not 200 billion. My point I'm making is the market will price this ahead. So ExxonMobil, Chevron, Exxon is owned by.
- [26:55]
Tim Seymour
The U.S. have to make financial commitments in the billions of dollars for long Venezuela that they feel comfortable about.
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Steve Grasso
I don't disagree. What I'm going to say is though, they've been there when it's been a horrendous place to survive in. Do you think it's going to be better or worse regardless of who's better?
- [27:11]
Melissa Lee
But that doesn't mean that they're going to do it.
- [27:12]
Steve Grasso
It doesn't mean they're going to do it. But I think he'll offer incentives.
- [27:16]
Karen Fireman
It wasn't so horrendous when they got there. It became horrendous.
- [27:20]
Steve Grasso
Right.
- [27:20]
Karen Fireman
So I get that it's better than horrendous.
- [27:23]
Tim Seymour
Yeah.
- [27:23]
Steve Grasso
I think potentially until Trump is out of office, Venezuela is going to be a puppet for the United States. Therefore there's going to be a flywheel of American companies that benefit from it. ExxonMobil, Mobil, Chevron are going to be at the top.
- [27:36]
Tim Seymour
These are long tail projects. So this isn't going to happen. And I'm not making a political rejection because I don't want to make one.
- [27:41]
Steve Grasso
But I think the stocks can move before the project moves.
- [27:44]
Tim Seymour
Maybe. And if we're just getting down to stocks, I mean, you know, maybe the best time to trade Exxon in the next six months was probably two days ago. I mean, I don't know. Chevron, I don't know. I think Halliburton's the most. I mean SLB is the most interesting. And now we got to go.
- [27:57]
Melissa Lee
All right. There is a lot more fast money to come. Here's what's coming up next.
- [27:59]
Andrew Obin
Next.
- [28:02]
Tim Seymour
Mining for A merger. Rio Tinto and Glencore rekindling talks for a long awaited tie up after a deal fell through in 2024. The latest on what would be the world's largest mining company. Next/ meta making moves on its data center. Build out plans. We'll trade. What's next as the hyperscalers put the pedal to the metal. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
- [28:32]
Melissa Lee
What made you confident that you could do something that hadn't been done before?
- [28:37]
Diana Olek
I have no fear of failure.
- [28:39]
Melissa Lee
Trailblazing women, changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got.
- [28:52]
Julie Beal
To think big to accomplish big things.
- [28:55]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money. Rio Tinto and Glencore resuming talks over a potential $260 billion takeover bid which would form the world's largest mining company. Initial plans for a merger fell through back in 2024. Glencore's London listed shares popped 10% while Rio's dropped almost 4%. And this is one you're watching very close.
- [29:22]
Tim Seymour
Yeah, and look, I'm long Rio in a pretty big way out in my etf. I personally, I think integrated miners especially, you know, we talk, all we do is talk about gold and now all we do is talk about copper. There's also been really good activity in iron ore and some of the bulks that are a big part of what Rio Tinto especially used to be part of. I think the trading prowess and what Glencore, Glencore does extremely well. They are a levered play on what's going on in the commodity space. If, if they are getting together, they have a view on the commodity complex. This, a lot of this feels like 2007 or maybe even 2003 when I was looking at kind of the rest of the world, Australia and these parts of world that are mineral rich countries. All this happening without a strong Chinese economy I think is very good news.
- [30:07]
Melissa Lee
Glencore also has coal assets. How does that fit into Rio? I mean, as a Rio Tinto shareholder, do you want coal assets?
- [30:14]
Tim Seymour
I think it's not, let's put it this way, it's not antithetical to what they do. I mean, I think, I think they're already heavily involved in an iron ore and you know, Dirty parts of the former energy space. It is what it is and priced accordingly. In fact, there seems to be a bit of an arbor some undervalued element of that part of their business that I think might be part of this.
- [30:37]
Melissa Lee
Coming up matters Data center build out is going nuclear. The three power providers signing with the hyperscaler and what it means for the future of AI. That is next. Fast money's back into.
- [30:49]
Tim Seymour
Mr. Moment of fast. Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.
- [31:05]
Melissa Lee
Welcome back to Fast Money Meta. Signing a mega 20 year nuclear deal today with Vistra and Oklo today to help power its data centers. The stock soaring double digits. For more on a data center build out in the space, bank of America securities Andrew Obin joins us here on set. He is a firm senior industrials analyst. Andrew, great to have you with us.
- [31:23]
Andrew Obin
Thanks for having me.
- [31:24]
Melissa Lee
We didn't chat too long ago and yet it feels like a lot has changed in terms of the announcements that we've gotten from cbs, for instance, the perception that perhaps there won't be as much cooling needed. How do you sort of take what has happened in this space and integrate into into your views of these in particular cooling companies? Like a train?
- [31:43]
Andrew Obin
Yeah, sure thing. So where I would start is that we're in the midst of massive technology change driven by Nvidia as Jensen is building moat versus the competition. And our thesis is that big players in the industry, both in the H Vac side and electrical side, are partnering up with the data centers to drive this technological change. And the mode is the pace of the technological change. So we think there will be a lot of news over the next couple of years as we're transitioning from GBX Rack to Kyber Rack, right. And as we're going from Blackwell to Rubin and then we're going to go to Feynman Chip. And each one of these steps requires very, very massive change in technology that supports the data center infrastructure. I just think there's going to be a lot of noise and I think the answer is stick with the big players. Because what the data centers want, they want to partner up with people who can design, install, commission and service the equipment. That's the moat. And I think the market is missing and there's a lot of note. Basically what Jensen said is effectively you can run chips now with water at 45 degrees Celsius. So all of a sudden people say hey, maybe you don't need these water cooled chillers. It's much more complicated Effectively because if you run a data center in Texas on a hot day, your temperature outside is going to be 45 degrees Celsius or 115, 120 degrees Fahrenheit. And frankly there is no other way of getting heat out of data center efficiently other than this large water cooled chiller. Now does this mean that for this iteration there probably less chiller content per megawatt? Probably, but there are offsets because you actually now need to put more stuff on the roof. I think generally it's noise. And the thing to keep in mind, Trane is sold out on water cooled chillers for the next two years. So looking from the outside, you're not even going to see see it right in the earnings, you know, but it's something to get excited. Right. There are these rapid technological changes. You have to follow them. Creates a lot of volatility around the stocks, but I think that's how we look at it.
- [34:07]
Melissa Lee
And I would imagine on top of the actual components being sold, there's a services part of the revenue stream. Right. That is more consistent. So that offers you sort of. Well that's right.
- [34:17]
Andrew Obin
And that's. And you know, then you have to think, okay, well Trane or jci, they put this equipment over the past couple of years is going to start getting service towards the end of the decade. Right. In volume. The other thing, what I would also say is that jci, Trane, they always talk to the likes of matter aws. Right. Alphabet and those guys do know what the technological path is, right? I mean they knew a couple of years ago. So you know, we're asking that this is like brand new, you know, development and all of a sudden all this capacity that has was put in is just going to go poof. You know the reality, right. Nvidia has given a roadmap to hyperscalers 12, 18, 24 months ago and everything they're ordering today is to be built in 26, 27. Right. So just keep that in mind. I think, you know, people just get very, very excited around these announcements, Andrew.
- [35:13]
Tim Seymour
I get excited and the second time you come on to talk about this and each time I feel like there's a trade out there that I'm missing. And so the advanced nuclear kind of reactor design. Yeah, I mean today was a nuclear deal. There's different days, different types of power. Nuclear alive and well. As someone that's been very invested in nuclear, happy to see this isn't just about, you know, a story of sometime in the future. But can we drill into kind of the nuclear reactor design and who is helping to build some of that infrastructure. Are they some of the same big names that we already knew about, but it sounds to me like it would be a different group of players.
- [35:49]
Andrew Obin
So. Yeah, so I think the theme is that we're short. We're short power in the U.S. right? And even if we do solar, even if we do NAT gas, we're still going to come up short and nuclear is the next solution. So actually we think that one of the biggest winners is going to be G ver Nova and they have one of the most conservative designs, effectively based on 40 years of their reactors and they have the largest and so one of the largest install base in the US and effectively they're going to the market with BW x 300 and it's based on the existing design. It's a little bit bigger than some of these startups and but they do have a deal sign in Canada which is going to start kicking in early 2030s. The only problem with nuclear is that it takes time to get approvals and generally you're not going to see until early 2000 and 30s now what's important.
- [36:41]
Tim Seymour
Even in a new Trump administration that seems to be fast tracking all of this.
- [36:44]
Andrew Obin
It's just, it's nuclear. You don't want this stuff blowing up.
- [36:48]
Tim Seymour
I don't.
- [36:50]
Andrew Obin
I mean, look.
- [36:50]
Tim Seymour
But it's not happening in my backyard.
- [36:52]
Andrew Obin
But that's exactly right. But I think what's important to think about that Meta today is grabbing. If you look at the announcement, right, there are two parts of the announcement. They have a 20 year power purchase agreement, right. And then there are all these nuclear developments. So what they're doing, they're grabbing 2.2 gigawatts today and then they're ensuring another 2 gigawatts by 2035 in future builds. That's exactly right. So the message is that Meta is short power, Matter is worried about your ability to access power from the grid and Matter is basically going behind the meter or striking their own deal with the utilities to get access to power. This tells you that the story has legs, right? The message here, you know, matter is thinking 10 years ahead. When we talk to investors, right. And go to the chillers, right. People are worried what's going to happen over the next six to 12 months. This tells you the hyperscalers are thinking a decade ahead and rightly or wrongly, right. You know, there is a debate about that, but that's the internal thinking.
- [37:55]
Melissa Lee
It is great to speak with you. Hope to see you Soon. So much changes so quickly.
- [37:59]
Andrew Obin
I know.
- [38:02]
Melissa Lee
Coming up, drone maker Joby Aviation soaring this year as Washington ramps up its defense push. What could be next for Steve Grasso? This favorite and the latest upstarts in space right after this. Welcome back to FAST money. Top defense names Northrop Grumman, Boeing, Lockheed Martin and RTX surging today as President Trump calls for a $1.5 trillion defense budget. But some of the bigger action in the defense space is happening under the hood. Drone makers like Joby Aviation, Vertical Aerospace and more seeing huge gains just since the start of the year. Steve's been keeping a close watch on these ones.
- [38:41]
Steve Grasso
When you look at the regulatory environment, President Trump's administration is doing a push for advanced aviation technologies. And all of these fit right in that wheelhouse. So there's going to be a lower regulatory burden for these companies. There's going to be a pull forward of benchmarks, whether it's the battery power or whether it's the distance that they're flying. I think it's a great environment for them to be in right now. They probably can go higher. They came out of the blocks really, really strong. You might want to let them breathe a little bit before you jump in.
- [39:10]
Melissa Lee
All right. And cnbc is celebrating 250 years of America. We are sharing the business stories that shine a light on our nation's entrepreneurial roots. Here's BNY Mellon CEO Robyn Vince.
- [39:23]
Tim Seymour
As our country celebrates its 250th anniversary, CNBC spotlights the leaders driving business and the nation forward. I am a good example of somebody who's just been drawn by the promise of America, the entrepreneurship, the freedom, the opportunity to innovate, the no limits on what any one person can achieve. And I think that is the message.
- [39:50]
Steve Grasso
Which is everything that we've got here.
- [39:53]
Tim Seymour
In the United States that creates that special sense of possibility. And the message to everyone in the.
- [39:59]
Steve Grasso
Country is that we really can do.
- [40:01]
Tim Seymour
Whatever it is that we put our minds to. When you bring a group of people together with common purpose and setting a.
- [40:08]
Steve Grasso
Mission wrapped in freedom and the opportunity.
- [40:12]
Tim Seymour
To innovate, you can do amazing things. That that is the story of the United States of America.
- [40:24]
Melissa Lee
Welcome back. Novo Nordisk Rising again today, the company teaming up with Amazon Pharmacy to offer its WeGovy pill through cash, pay and insurance plans. Novo up more than 12% this week. For more, let's bring in Citi's head of health care research, Jeff Meacham. He just published his outlook for Biopharma in the year ahead. Jeff, great to have you with us. What do you make of this huge gain in Novo Nordisk in the past week on the Wegovy pill? And the Amazon deal seems to be, I mean, there are 220 million Amazon prime members. Most of them are in the United States. It seems like a huge win for Novo.
- [40:56]
Jeff Meacham
It does. And thanks for having me, Melissa. Yeah, I think the Novo vs Lilly competition is still going to be pretty dramatic this year. But I think the main thing is it's not a zero sum game. So Novo and Lilly, you know, both can, can gain share this year. We'll get, you know, the benefits of the Medicare Medicaid agreement with the White House, which was reached last fall. So, you know, I wouldn't view it as, you know, Novos gain to Lilly's loss. Right. I do think that, you know, both companies with broader access are really going to see their, you know, their meds dramatically, you know, get much greater utilization.
- [41:33]
Melissa Lee
This year and then, and then which sort of upstart players, you know, smaller companies working on the next sort of weight loss drug, whether it be oral or some other injectable, which are on your radar in terms of being potential targets and how much richer should they be valued given what we're seeing in the space right now. And also the deal from its. Sarah.
- [41:55]
Jeff Meacham
Yeah, yeah, I mean, met Sarah and Pfizer. Pfizer definitely is investing very heavily in, in phase two and Phase three trials going forward. Amgen is in a bunch of phase threes, but I'd say the smaller players include, you know, structure, for example, Viking and others. There's not necessarily a winner yet. I would say that Lilly and Novo created such a high bar that you have to have, you know, really amazing efficacy, but also great tolerability and low dropouts. And so I think, you know, I would look to phase three trials as really the true test here. Anyone can come up with decent phase one or phase twos that are sort of proof of concept.
- [42:36]
Karen Fireman
Karen, let me ask, first of all, thanks for being on. Let me ask you about structure specifically. So sounds like maybe you think some of the excitement about it is it may be overblown.
- [42:49]
Jeff Meacham
No, I think that there, there are multiple players that can win here. You know, what we're modeling is if you look out to 2030, call it 2032, it's mostly Novo and Lilly. Maybe you could say Amgen gets a slice of the market just because they're already in phase three, but there is room for probably two or three more players. And so I wouldn't say that you know, I wouldn't count out, you know, Pfizer or Roche or even some of the smaller players like Net Sarah, I mean like, like structure, you know, or Viking. But it would, it would compel me to say though that you know, some of those smaller players probably need deeper pockets and, and maybe at least a corporate partner to get them through a large scale phase three.
- [43:31]
Melissa Lee
We caught you just before JP Morgan health care and that's obviously a big event of the year and obesity is going to be a huge theme. But what are some of the other major themes and are you expecting any sort of deals to be announced given the flurry of activity we've already seen in deal land end.
- [43:47]
Jeff Meacham
Right. Yeah. And even this week, right. I mean there are, there were, you know, articles about both Abbie and Merck doing large scale deals. I wouldn't be surprised to see a deal, you know, happen or a few maybe on, on Sunday or Monday. That's not unusual for, for jpm. But the other themes are I think coming from the bigger cap management teams really validating the fact that we're going to be in theory more quiet on the policy noise and headline that obviously contrasts with last year. So just getting a check on that that you know, no new negative policy worries is I think a big deal for the group. Lots of IPO activity expected. So that I think is going to be you know, part of the chatter and then of course AI and how that could play out, you know, with regard to speeding up drug development timelines.
- [44:35]
Melissa Lee
All right Jeff, great to speak with you. Thank you.
- [44:38]
Jeff Meacham
Thank you.
- [44:39]
Melissa Lee
Jeff Meacham of Citi just quickly your.
- [44:42]
Tim Seymour
Novo very much so. And now and I Jeff was very balanced in his view of this is an addressable market kind of a dynamic and the Amazon news but I will say you can't tell me that the two stocks haven't haven't responded to news flow related to each differently. And I just think this is time for no but outperform.
- [45:00]
Melissa Lee
Up next, final trades, Final trade time. Julie Beal.
- [45:18]
Julie Beal
You know a safer way to play housing might be transunion.
- [45:22]
Melissa Lee
Timbo.
- [45:22]
Tim Seymour
The offshore drilling market though is still an interesting place. Getting back to our oil conversation. SLB it's now named Karen.
- [45:30]
Melissa Lee
Yes.
- [45:30]
Karen Fireman
So I like to buy protection when it's cheap which it seems cheap to me now with a vision fix here.
- [45:34]
Melissa Lee
So spy puts Steve Boeing been here.
- [45:37]
Steve Grasso
For a little bit. I think it's going higher.
- [45:39]
Melissa Lee
Thanks for watching Fast Money. Have a great weekend. Mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer the New Year.
- [46:21]
Tim Seymour
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