← CNBC's "Fast Money"
CNBC's "Fast Money"
A Post-Jobs Report Market Sell-Off… And Construction And Biotech Bucking The Downtrend 8/1/25
00:43:46
Markets sell off after a weak July Jobs Report and news of Trump’s revised reciprocal tariffs, but Jefferies Chief Market Strategist David Zervos says not to be alarmed. Plus, Amazon sinks on yesterday’s rough forecast while burgers and biotech rally. Fast Money Disclaimer
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- [00:01]
Melissa Lee
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- [00:32]
Steve Grasso
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- [01:05]
Tim Seymour
Life in the NASDAQ markets in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. Friday fireworks Weak jobs data prompting the president to oust a Labor Department official. The latest report sinking stocks and sending investors searching for safety. How should you position as we head into next week? We'll debate that and Amazon anguish the tech giant erasing more than a month's worth of gains after its earnings last night and leading the losses in the NASDAQ 100. What warning signs could be found in the results? And can the company stage a rebound from here? Plus, charting the utility stocks with the sector at records. Are any names worth a buy Now? Big money in focus on its second day as a public company and a couple dots of green and otherwise deeply red market. We make sense of the up moves in a trio of sectors. I'm Melissa Lee coming to you live from Studio B at the Nasdaq. On the desk tonight, Bono and Ice and Steve Grasso, Tim Seymour and Carter Braxton work. We will get to the President Trump's firing of the labor statistics commissioner in just a moment. But we start with what amounted to be a very sharp sell off to wrap up the market's worst week since May. The S and P dropping 1.6%, its fourth day of losses in a row. The benchmark index, which hit an intraday record just yesterday, hitting its lowest level in two weeks. The Nasdaq saw even bigger losses, down more than 2%, while the Dow shed nearly 550 points. Yields meantime, sinking the two year down over 25 basis points. That's its biggest drop in nearly a year. The flight to safety coming after a much weaker than expected jobs report. Payrolls growing by 73,000 in July. That is less than the 100k estimate. And June number numbers were revised sharply lower as well. The disappointing data upping the chances of September rate cuts by the Fed from less than 40% to more than 80%. But what does that say about the strength of the economy and the recent rally? Steve, what do you say?
- [02:51]
Carter Braxton Worth
Yeah, so. So we've had the fastest and the strongest recovery from a sell off back in April that we've ever had in the history of the markets. So this was sort of primed. Everyone questioned what we priced to perfection. So if you look at everything that the market has done well, it's checked all the boxes. If you look at everything that the market has done wrong, there's only been a few things right. So the, the lower left, upper right still on track. But we are due for a little bit of a pullback. Tuesday we had an outside reversal day. Yesterday we almost had another one, but we didn't close lower than the prior day's lows. Then we had a, now we have a lower week that we haven't seen in a couple of weeks. So there's a lot of technical things that are brewing. We have 70% of the trade deals that are done. There's a lack of catalysts. You have a big tech, big cap tech, as all reported and done well. So if you think about where the next catalyst is coming from, you probably struggle a little bit. You have tariffs, you have Russia, you have a bunch of things that are negative headwinds right now. So I think you're good to sort of let it all clear out for a little bit reset and then the market will get back on track. One last thing. Just remember how quick we recovered in April. You don't want to sell this market. We recovered in seven days from that. The market was off in two days, 10% and was up in one day nine and a half percent. So the market is always torqued for that. Just be careful.
- [04:20]
Tim Seymour
I think even without the weak Jobs data, you could have made a case early this morning bottom and that it was time for the markets to pull back. But adding that jobs report, how much more concerned are you that this is not just a pullback, that this is a, an actual growth scare perhaps in the making?
- [04:34]
Bono
I would say materially more concerned. To Steve's point. I do think that that previous kind of April reversal and then Strict rally or steep rally has informed investors and I think perhaps they're a little bit less gun shy to kind of like pull the trigger and take profits when we're still in a positive situation. We just came off the back of earnings to your point. All of the catalysts that have primed the market for that rally, the majority of those are now off the table. So there's kind of assume that we don't have the report today. There was already a benign situation with few catalysts. So it made sense to kind of take some profits, particularly given how narrow the rally that led us up here was. It really was tech and tech adjacent. You can argue utilities, you can argue data centers, but all of that stuff has to do on the AI play. I think the jobs number today, I would say listen, there has been divergence between ADP and non farm payrolls, but the, the prior two months revisions I think give you additional concern because the argument. And then you have the GDP number which was revised higher but then you might make the argument that perhaps that was kind of a lot of tariff pull forward. So I think the, the, the, the macro setup is murky enough and is now the new focus where it made sense for us to kind of pause. I think us seeing perhaps a bit of weakness in the labor market is the canary in the coal mine and a prudent trader would be taking some profits without with the additional, you know, cloudiness to visibility.
- [05:58]
Tim Seymour
You know, we had some pretty strong earnings out of big cap tech this week, Tim, but we also had a number of companies actually outlining what they are seeing right now is the impact of tariffs. Whether it be, you know, a GM for instance, or Mattel. I mean it really runs the gamut in terms of the impact here and then we get this jobs report. So in your view, I mean we always knew that the impact of the tariffs would be delayed. Are we starting to enter the period where we should actually be much more concerned about the tangible impacts of those tariffs?
- [06:27]
David Zerbos
Well, I think getting back to both the market's performance and Steve referenced how quickly the market recovered. But, but I would argue it wasn't just a seven day sell off or seven day recovery. I mean the market started to sell off in early March and it was selling off on the prospect of tariffs. So if we are now here and again if the market sells the fact, again we're not selling the fact that we've gotten there, it's time to sell markets, we're really selling the reality of what they mean. And you know, back to that payroll number. It's not that the labor market weakened, it's that it dramatically weakened. It's as if somebody pulled the carpet out from under when you're told that the average, that the three month moving average now on labor is 35,000 and that the U6 so the underemployed amount is going up and is at five month highs. It's a very different labor market than what we had. Now as we said on Monday, I know we had this conversation, we had it a week ago going into this big week that the labor and the payroll number was the biggest announcement of the week. So I think you have to at least acknowledge that this is a, a significant moment for the market. Now, having said all that, I do think it's very unclear and sometimes that's enough for markets to sell off. We're going into a long weekend geopolitics, if you started the year, might have been the biggest issue for people out there. And we've raised another geopolitical flag out there. So hard to freak out for all the reasons that have been spoken about so far tonight. It's, it's been a fantastic move to the upside. I'll just say this too. This earnings season has been fantastic. They've, you know, they've earned. Earnings growth is around 9%. Revenue growth is around 7%. The beats are, you know, 7 to 7 and a half percent. The revenue beats are almost 4%. So these numbers are reflecting companies that are doing better in an environment where people thought they would.
- [08:20]
Tim Seymour
Is it a long weekend, Tim?
- [08:24]
H
I think it means it's a long.
- [08:25]
Carter Braxton Worth
Going to be a. Sorry.
- [08:26]
Tim Seymour
Oh, it's going to be a long. I'm giving you.
- [08:27]
David Zerbos
Okay, I'm, I'm giving you Monday off, Melissa, because you deserve it. You work so hard this week. But I mean, I mean it's a long weekend in that any time you go into a summer weekend, it's a quiet time. It can be a long weekend in the world where I think liquidity is actually quite light.
- [08:44]
Tim Seymour
It can be treacherous. Yes. With low volume these days. Volume that is Carter Braxton worth.
- [08:50]
David Zerbos
Yes.
- [08:50]
Tim Seymour
Does this sell off concern you at all?
- [08:54]
I
I mean, on the surface, let's just say what it's two days in duration. Like one would have to get out a microscope to see it. And it's what, 3% plus minus, which is also de minimis and minor. The question and you all are batting it around now, is this the beginning of something more meaningful? I think the precondition for the sell off all the things that might be in effect or clearly in effect a move some 33% off the plunge low of April, the tariff low and a lot of money pushed into the market. Many stocks 100%. If you look at the spy chart that's on the screen, we've exceeded the high of the pre tariff sell off and I've annotated that. It's 631. It's actually 613. And so support even as you sell off is the prior high from which you broke out. So Support begins at 613. And support, however, and here's the second chart is not a plywood board. It is not a concrete floor. It is a mattress top. You get to support and you can sink into and often do sink into support further into support until indeed you start to come up off the mattress just like a child bouncing on the bed in the hotel room. And so we're down a mere 3%. It's nothing. Support goes all the way down 5, 6, 7%. The lower band of that chart is down about 10%. Now that would be a norma give back, drawdown, sell off, decline, correction, drop whatever nomenclature one prefers. But what's happened so far is entirely and absolutely nothing. Today's 3%. There's every indication it should be more.
- [10:32]
Tim Seymour
Meantime, amidst a sell off, there are fireworks in Washington, D.C. today. President Trump demanding the firing of the Commissioner of Labor Statistics hours after the jobs report. Fed Governor Adriana Kugler also announcing plans to step down next week, clearing the way for a Trump appointee on the Fed. Cnbc. Steve Liesman's got the latest on all of this. Steve?
- [10:53]
Steve Liesman
Melissa, the president asserting without offering any evidence that today's bad jobs report was rigged for political reasons and he fired the commissioner of the Bureau of Labor Statistics, Erica McIntarfer, the president wrote, quote, in my opinion, today's jobs numbers were rigged in order to make the Republicans and me look bad, just like when they had three great days around the 2024 presidential election. And then those numbers were taken away on November 15, 2024, right after the election when the jobs numbers were massively revised downward, making a Correction of over 818,000 jobs A total scam. Today's revisions to prior months were large, but they have been bigger than usual since the pandemic, the result of a problem with response rates from companies. The president, though, made a pretty big mistake with this November date, undermining his own political charge there. As can be seen from this CNBC article, the BLS announced the 818,000 downward revision to 2024 job growth in August, three months before the election, not after. It's unclear if the President has any other data showing that the job market is stronger than it appears on the BLS data. The President's actions, however, risk undermining confidence in U.S. economic data, which many economists say is the global gold standard because in part, revisions use new and better data to make and provide that confidence. Separately, Adriana Coogler, the Fed governor, she announced her that she resigned on August 8th. She has served since April 2022. This opens a seat for a presidential appointment five months earlier than originally expected.
- [12:24]
Tim Seymour
MELISSA Just curious, Steve, were there any changes in the odds for a rate cut based on Coogler stepping down?
- [12:34]
Steve Liesman
I don't know about that on a rate cut on Coogler I'm seeing here. Let's see the latest. Now I will tell you what's happened to the September odds which have been north of 90%. They went from 40 to 90 after the jobs number this morning, 45 to 90 and they're now about 96. So maybe a slight increase after the Coogler announcement. The president will probably take a couple months, but beginning Senate approval announcement and approval maybe by September a new person could be in place. I'd say that's the earliest. So the October meeting more likely, but maybe September. And then you have also what looks like a 90%, almost 100%. It looks like odds for a December rate cuts are two built in and who knows, there could be three. If these jobs numbers deteriorate further, we'll get we could even get three quarter point rate cuts this this year depending upon the inflation numbers remaining under control. MELISSA Right.
- [13:33]
Tim Seymour
Politics aside and I understand that's tough because this is basically all politics here that we're talking about. STEVE but in terms of the revisions, they do seem like there have been bigger swings in recent history than in the past. So is there an argument to be made not that they are doctored, but that there is something in the methodology and how it's calculated that is causing this volatility?
- [13:55]
Steve Liesman
So there's two stories here that need to be discussed. The first is the idea that the response rates have been lower since the pandemic and these are eventually chewed up. But the question becomes why there are downward revisions. I've read a paper, maybe two papers on this notion that there's a bias. Those responding are more likely to be those hiring and it's those who are firing or remaining stagnant with their workforce who are later where the BLS gets that data later. That's a problem. I know the BLS knows this is a problem. I know they have requested some funding to make changes of their statistics. They routinely either cut or turn down for additional funding. What's really interesting here is whether or not a big data from the private sector can help out. The ADP numbers look a little bit better. Now, those are pretty much thrown out by a lot of Wall street economists because they don't really match the bls. But that weakness showed up relatively early in the adp. But the president, Melissa, getting back into the political thing, seems to be rejecting the idea that jobs are weak at all, that the jobs numbers are in fact strong. And I'm not sure where he's looking for that or looking at to come to that conclusion.
- [15:10]
Tim Seymour
Steve, thank you. Steve Liesman, Pleasure. For more on all of this as well as the markets, let's turn to David Zerbos. He's CNBC contributor and chief market strategist at Jefferies. David, always great to see you. Fantastic to get your perspective because you were at the Fed, correct? You're at a Fed economist at one point in your life, many, many years ago. Is there any reason in your view as a market strategist now to question the methodology of how jobs are calculated that there might be a political aspect to it?
- [15:42]
H
I think we always want to question the data. We know it could be done better. I think your point, Melissa, was a good one. Why is it that it seems more volatile now than it's been in the past and I don't think we have good answers to that. I think this administration sees a lot of politics behind the scenes and it's a little worried about how those politics are playing out. It sees a swamp, it's called it a swamp in both Trump 1 and in Trump too. And I think they're sort of maybe shooting first and asking questions later a little bit when it comes to appointees and they have the right to change these folks out. That's kind of the prerogative of the president. These are political appointees with Senate confirmation. And to the extent that the September rate cut seemed to have some political biases in it, you could go back all the way to Janet Yellen in 2016 and her non commitment to raise rates after she was committed to raise rates going into the initial Trump won election. There's a lot of undercurrents of politicization that I think are there and I think, you know, kind of gutting it is sort of not to be. I'M not surprised by it, let's put it that way.
- [16:57]
Tim Seymour
Would you be concerned? I mean, I don't know how the interview process is going to go for a position where you are calculating data.
- [17:05]
H
Yeah.
- [17:06]
Tim Seymour
You know, what would they say? How would you have seen the September jobs report? Oh, you would have seen a better labor. That myth, you're hired, you got the job. I don't know if that's going to make anybody feel any better either. That's also politicization in another way.
- [17:18]
H
So I think that's right. Look, I think that job in particular is supposed to be a non political. Even though it's a political appointee, it's stated that it's a statistics job. Right. It's not meant to have political views. You're supposed to be taking a stand on the data. So I kind of like Mohamed El Erian's discussion earlier today. He tweeted a bit, just, we just need to get better at the data. Let's put some, let's put some resources behind it. Let's get better at it. This is just, I think more about a failure, about getting these numbers right and looking, you know, at anybody's job performance. If you're having that many revisions, maybe it is time for a change. And I think that's a fair, that's a fair way to look at this one.
- [17:57]
Carter Braxton Worth
David. I'm trying to look at catalysts for the market. Yeah, when we, when we look at the, when we look at the trade deals, 70% or thereabouts have been inked. Not that they've been finalized, but they've been inked. What are we looking for for the China deal and when do you think that gets done, best case scenario? And is that the next catalyst for the market?
- [18:17]
H
I mean, I think the Secretary of the treasury made it very clear this is happening fast. They're looking at the European deal, they're looking at the Japanese deal and they're probably like, holy cow, that happened faster and more aggressively than we thought and they need to make a move. So I think that's all going to happen relatively quickly. The question really is how important is it for the market? Because the initial, you know, when we were back in April and we were here and the world was going crazy, you know, the impact was huge. And now it's just people are looking at this and going, okay, I get it. The whole idea was simple. He did the classic art of the deal. He came in and he said, I'm going to disrupt, I'm going to get everybody to the table. I'm going to make a deal, and I'm going to make a deal that's fairer for the United States because I hold the cards. I hold the cards because we're more cooperative than our trading partners. So they have more to lose. Now, he took that bet. It could have gone wrong. It could have, but the bet was because they had more to lose. They'd come to the table and they'd give something up. And that looks like exactly what's happened. So I think the market is now conditioned to understand what the technique is. They don't get scared when the big numbers get thrown out. Even Switzerland, which was like almost 40%, I wouldn't be surprised if the Swiss are back at the table going, you know what? We have figure out how to get this thing down. Like, okay, what do we need to do? And we're back at 15 or 20 before you know it because they made some concessions, they did some investments, they did something. That's. That's the deal. And I just don't think these are going to drive markets anything like what they drove in April. This is. We're going to be driven by monetary policy. We're going to be driven by what changes in the. As though one big beautiful bill goes into enactment and the investment comes in and we start to see that filtering through the data and the economic data.
- [20:03]
Tim Seymour
Tim has a question.
- [20:04]
David Zerbos
So, David, let's. Yeah, great to see you, but not be there, unfortunately. Sorry.
- [20:09]
Steve Liesman
But.
- [20:09]
David Zerbos
But David, how about the market itself? Let's leave the politics alone. And I think we're all kind of tired of the politics. In fact, there are sectors that have been uninvestable, either because of the politics or frankly, they've been a. You know, they have also been at the risk of some of their own business models, but health care for sure, energy for sure. And so in terms of positioning, where do you think investors should be taking a shot here where either things are oversold? There's been nothing about this earnings season that should give us any pushback on the growth around AI So, you know, to me, no matter what happened today, some of those themes are alive and well. But I'm curious where you are on positioning, because there's places that have been beaten up and there's places that have rallied.
- [20:54]
H
Well, as you know, Tim, I'm more of a macro guy. I don't take a lot of sectoral views, so you're not going to pin me down on that one. But here's one thing I will say on positioning, because I think positioning is really important here. I think a lot of people got out of a lot of risk in April, May, and they didn't get back in. And there's a whole subset of investors that have underperformed. And we're going to see redemption. We're going to see people lose their funds and lose their jobs in some ways. And those funds are going to go to those who stayed true to the idea that this was not a panic selling situation and they're going to get more assets. And guess what they're going to do with those assets? They're going to drive them the same way they've been driving the assets all year. So my vision for the second half of the year is that we're going to have a bit of a transfer as people withdraw and move toward those who have been in winning strategies to start the year. Those folks are going to actually lose their assets and you're going to get another leg up because that money is going to get invested. And I think it's going to get invested not just because they have that view and it was correct before, but actually there's a lot of catalysts for that view to continue, meaning there's just great investment opportunities that come from what was just passed in Washington in terms of everything related to the one big beautiful bill. But the other factor will be as we process lower interest rate environments into 26, 27 and possibly even 25, that a resignation today. I think that's going to push pressures on multiples higher. People go in and invest more and you've been steadfast.
- [22:37]
Tim Seymour
Even when you were here in April and things were crazy, you were like, no, things are going to turn out great. We're going to see a lot of catalysts coming forward. We've seen them play out. And so, you know, in terms of what the market has digested, we, we know a lot of, of that because you elaborated on them in April and that's why we went to new highs. So at this point in time, what is that next driver in how important is, let's say, you know, 50 basis points cut total by the end of the year versus 75 versus I mean, does that incrementally make you more bullish? Because it does seem with Coogler stepping down that potentially we have a better chance of getting faster and deeper rate cuts.
- [23:16]
H
I think that's right. I don't, I mean, it's hard to parse out why she left five months early. I mean, you know, I don't know the answers. Did she have disagreements with people on the committee? Was she just, you know, ready to go? Does she have a great job offer at a university? I don't know. But it certainly opens up more, more room for a board that is made up of Trump appointees. And presumably Jay will leave at the end of his term in May, although he hasn't committed to that. And we'll have four out of seven seats that are really Trump appointees and it'll be a Trump board. So I think the market's focused on that. The market knows that this sort of playing games of what we saw this week with the FOMC meeting, where it was the hawkish meeting and the tariffs are still an issue and we've got to be careful. And uncertainty, the code word for everything. Uncertainty makes, makes everybody, you know, walk away. I actually don't. I hate this word uncertainty because there hasn't been that much uncertainty. In fact, volatility has been low. The VIX popped a little today, but it was 15. It's probably going to be 15 in a week when we're all back to normal. And bond volatility, bond volatility is at its lowest level since 2021. So I think uncertainty is kind of code word for we don't really like the policies and we didn't really get the investment thing right. So we got to lean on that. I think once we get through this and we get a Fed that is more in touch with where policy is truly, which is restrictive and is committed to bringing that down, you're going to get the next leg up. And that's a big part of the second half year and 2020.
- [24:56]
Tim Seymour
What's the saying? Don't fight the Fed. So, David, great to see you. Thank you.
- [25:00]
H
Always a pleasure.
- [25:01]
Tim Seymour
Coming up, Amazon's awful day. The tech giant the worst performer in the NASDAQ 100 after earnings last night. What's next for this name and what it says about the state of the air trade? Stay tuned.
- [25:15]
Steve Grasso
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Carter Braxton Worth
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David Zerbos
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Melissa Lee
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- [25:51]
Tim Seymour
Welcome back to Fast Money Buzzkill. And Amazon, the stock sinking 8% for its worst day since President Trump's April 2 tariff announcement, shedding over $200 billion in market value. Investors left underwhelmed by last night's earnings with US Revenue growth trailing behind its hyperscaler peers. Profit guidance also coming in below expectations. Carter, does this drop make you concerned about the chart?
- [26:15]
I
Well, I'm in principle the nature of earnings related reactions in the market are typically you gap up or gap down because it turns out it's very hard to predict earnings despite the number of analysts that are trying to do it. And so beats or something good gap up. Something disappointing like this gap down but not a sort of a major event. I would just say it's contained when they really miss or really disappoint. And you see that all the time, they drop 10, they drop 12, they drop 15%. This is nothing like that. I would say it's small potatoes in the bigger picture.
- [26:54]
Bono
Yeah, I think on the surface, I mean as you mentioned, just its, its performance vis a visa, its peer group makes it just challenging. I don't think that that US cloud number is particularly bad and definitely doesn't warrant a drop of this nature. But with that said, I think there are other things that perhaps are looming. One, this isn't really a pure play AI in some in the way that some of its peers are. So if you're looking at investing the incremental dollar or you know, looking to, you know, kind of trim something, it seems like if you want to still play that AI nature there's other ways to do it and will still give you some of the defensive nature of large cap tech. The other thing that might be boiling under the surface is the removal of that de minimis kind of loophole being closed and concerns around tariff and whether or not we talk about nwc, but you know, they still have this large consumer business that might be a bit more, you know, a bit more sensitive to some, some of those tariff shocks. So I think, you know, of the winners, I think this is one that has perhaps some downside there. I'm actually looking to add to the position here, but I'm going to wait for things to kind of shake out a little bit. I can understand the logic here. I just think it's overdone and if you just again look at the numbers in absolute, in a vacuum, this is still a strong performance and I think that they will continue to rise. Along with, with its peer group is.
- [28:09]
Carter Braxton Worth
The growth engine giving up market share is negative. That's why investors got spooked. And if you look at how much they traditionally Capex is a negative, but now they've been able to monetize Capex with the whole AI push for the last couple of years. If it's not being monetized, that's a negative I'd stay away from.
- [28:26]
Tim Seymour
Yeah, I mean, as we said last night, Tim, I mean if you're going to question what that extra dollar spend is going to bring you, that's a problem. And maybe that's a question that we have here with Amazon. Are you worried about this, this quarter and what it might say about its positioning?
- [28:41]
Steve Liesman
A little.
- [28:42]
David Zerbos
Although I tend to agree with what Bono and said. I mean I think this is probably an opportunity, but I don't have any need to go out and buy Amazon tomorrow on this weakness. I think it sets up and it seemingly is a place where a lot of people wanted to own this stock recently. So. But the weakness for us and when you got Azure growing 39%, Google 32% and I just think that the environment in cloud is becoming that much more aggressively competitive and it will and it will become more commoditized and I think margin comes under pressure. So if they're really falling behind in terms of the two primary competitors, that is something to be concerned about and to watch. And the stock could sell off a lot more than that. Especially as we always point out the value of the company. You're getting the E commerce business for free. It's really all about aws. So I'm not buying the stock tomorrow or. Well, I know it's a long weekend, Melissa, so maybe I'll have to wait until Tuesday.
- [29:38]
Tim Seymour
Just kidding. Wednesday, it's.
- [29:40]
David Zerbos
Yeah, no, whatever. I know I'm giving you the long weekend so I could be in buying it Monday, but I'm not going to buy it. And I do think investors don't need to go buy Amazon tomorrow.
- [29:51]
Tim Seymour
We didn't even touch on Apple and that was the other big earnings report out yesterday, Bono. And so I'm wondering, it's interesting because you have Amazon here, that was supposedly a player in AI. Disappointing on AI. Apple doesn't have AI. There could we could be setting up for a huge upside potentially they get this right. Which one would you rather? Basically right here, right now.
- [30:09]
Bono
Right here, right now, Apple. And I really don't think it's close. Listen, I think part of the concern there is like you come out and you have Microsoft actually giving you Azure numbers, which they have not done in the past. And Then you have Apple playing it a bit coy. You've mentions of AI. You don't know whether or not they're spinning on Capex or AI related talent. So I think they're being a bit coy. But I do think that sets up for them saying listen, we are willing to come to the table, we're willing to deal and I think that an acquisition is actually on the table. I think that will likely be accretive. So if I'm forced to take to take a position right now, I think it's Apple.
- [30:42]
Tim Seymour
All right. There's a lot more fast money to come. Here's what's coming up next.
- [30:46]
Melissa Lee
Gold breaks out and bitcoin breaks down. What's behind the divergence as so called digital gold pulls away from record highs. Plus burgers, biotech and builders. We found three bright spots in today's market drop. What's behind these trend buckers next? You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
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- [32:05]
Tim Seymour
We have a news alert on ChatGPT OpenAI COO Brad Lightcap just posting on X that they have passed 5 million paying customers on the platform. Wow. Meantime, shares of Figma rising as much as 24% in its second day of trading. Close the day up over 5%. The design software stock more than tripled yesterday from its IPO price of $33. The company now has a market value of nearly $60 billion. Grasso, did you get in?
- [32:30]
Carter Braxton Worth
No, I didn't. I did. I want to look at it for a couple of days. I want to see it take on a personality of its own. You have to. You have to watch IPOs and there's a chance that if the market cooperates, this thing runs aggressively. Even though it ran without the market's help. But I think you're going to see a little bit of a pullback. They usually revisit the price that they first traded at. So I'm going to wait for that.
- [32:53]
Tim Seymour
33.
- [32:54]
Carter Braxton Worth
No, no, no. After it open. And that could easily happen in a heartbeat.
- [32:59]
Tim Seymour
Right. How about you?
- [33:00]
Bono
No, I'm not in it. I'll monitor it. I have just concerns about generative, generative AI, quantum computing and quantum intelligence kind of coming in and disrupting this. I just, I think there's just too many data points that I can refer to. For one, I have $20 billion in the back of my mind in terms of where this thing was fair valued and it's 3x that I have a hard time kind of connecting those dots. So I'll wait until I have a bit more data from the company and can, can look at some statistics or some quantitative data and then make an intelligent investment decision.
- [33:32]
Tim Seymour
What's also interesting about this one, which is, which we haven't really talked about much, is sort of the bitcoin angle to this Figma ipo. They do have a stake a share in, in the Bitwise BTC etf. So you have sort of a little bit of exposure there, Tim, to all the, all the great market trends right now. Bitcoin and I.
- [33:54]
David Zerbos
Yeah. And by the way, I'm going to use the long weekend to figure out what these guys do for a living. I just think this is a case.
- [34:00]
Tim Seymour
Where.
- [34:03]
David Zerbos
My takeaway on this is unrelated. It's that the IPO market and the M and A world are things that are tailwinds for the market overall. And if that's reversed, then that's a big disappointment. But yeah, I understand where the themes are at large here and the bitcoin relationship as an ancillary bitcoin bitcoin play. I think there are much more interesting places to get that ancillary exposure. So I don't think you need to chase on that.
- [34:31]
Tim Seymour
Coming up, a few precious bright spots in this otherwise rough day for stocks. How to trade the moves in homebuilders, McDonald's and biotech. That is next. More Fast Money into.
- [34:43]
Melissa Lee
Missed a moment of fast. Catch us any time on the Go Follow the Fast Money podcast. We're back right after this.
- [34:57]
Tim Seymour
Welcome back to Fast Money. Stocks plunging as investors digest a weak jobs report. In the latest tariff news, the Dow down more than 500 points. The S&P dropping more than one and a half percent and the Nasdaq tumbling over 2% gold and Bitcoin moving in opposite directions of precious metals, settling just shy of $3,400 an ounce, the highest level in over a week. While bitcoin posted its fifth straight down day. Coinbase sharply lower after yesterday's disappointing earnings. Today's crypto sell off adding to the stock's woes. But Reddit going the other way. The social media stock getting a big boost after blowing past Wall street estimates and issuing rosy third quarter guidance up 17 and a half percent. A couple of other bright spots catching our eyes today. Builders, burgers and biotech, starting with the builders. The ITB having its best day since July 22nd as rates pulled back. Horton, KB Home, Polti and Lennar all jumping today. How do you feel about the builders, especially now that Coogler stepping down, opening a position for Donald Trump to, you know, appoint his own person.
- [35:56]
Carter Braxton Worth
Yeah, I like the, I like the builders. And we've seen a bifurcation between existing home sales and new home sales. So I think you're going to get a shot for people to start entering the market again. But let's remember, over 70% of the homeowners have mortgage rates that are very, very low, much lower than where they're at now. I think they're below 6, 6% or even 5% if you're going to buy a Homebuilder. I like Dr. Horton. They're spec builders. They can adapt very quickly to changing environment.
- [36:25]
Tim Seymour
I get that. But you see this, you just need a little change in rates, change in rates to make this whole trade look a lot better. I don't know what, how do you feel about it?
- [36:32]
Bono
Bottom well, they also have the ability to buy down rates, you know, now that may cut into some of their, their margin here, but I think they just have a little bit more flexibility. So I think it stacks up more favorably versus the existing home inventory. It's dated, perhaps it's, it's like you mentioned, it's not built to specifications or was built to specifications of, of the premium previous owner. You know, I like them. The run up today is it seems like I'm chasing something and I'm not sure I really want to be buying in a situation where perhaps the consumer is still weakening, perhaps you're seeing cracks in unemployment. But I do think you, in order to trade these, you kind of have to be on the opposite side. Side, you kind of want to be selling when Cinnamon is strong and you want to be buying when Cinnamon is weak. So I think it's something worth looking at, particularly being that it's been an underperformer and it probably, you know, sets up nicely to have, you know, a little bit of dollar cost averaging into a more of a diversified asset, albeit economically more sensitive.
- [37:26]
Tim Seymour
All right, let's get to McDonald's. Also seeing McGain, the company reportedly looking to quote double down on Investments by 2027. According to Reuters, the Price Burger chain reports earnings on Wednesday. Tim, I got to go to you on that. I know you're going to go to McDonald's on this long weekend. That's what you like to do.
- [37:43]
David Zerbos
Yeah, yeah. No, I mean think about how much time I could spend. All the extra time this weekend I could have with McDonald's and think about, I could ponder the adult Happy Meals that are coming as well. Remember they, they teased us with those last year. I think the Crocs Happy Meal was something guy was a big buyer of and I, I just think McDonald's ability to outperform the quick serve is been proven. If you look at their, their third quarter comps, they're actually on the upswing. I think you find an environment here where McDonald's and their ability to employ AI and cost benefits of that and the efficiencies, including what we've seen from their ability to use loyalty kiosks, I think it's another leg higher for McDonald's in terms of margins. So I like McDonald's. It's not cheap, but it will be defensive on the way down.
- [38:31]
Tim Seymour
All right. And some biotech stocks also getting a boost. Abby Biogen Regeneron among the names seeing outsized gains. Carter, how does any of the biotech ETFs biotech sector look to you?
- [38:42]
I
Well, a very damaged area that bounced substantially off the April low. XPI is the way to play it, but just doubling back on McDonald's. Remember this, of course McDonald's is at 10 year relative lows to the S and P. And Tim used a keyword, it acts defensively. It's more highly correlated to the consumer staples sector than it is the consumer discretionary sector in the sense that while it is discretionary, whether you do or don't go to McDonald's is perhaps the cheapest meal you can buy. It's the world's cafeteria and all things held equal in a down market. I'd rather be in McDonald's than a lot of other things.
- [39:18]
Tim Seymour
All right, coming up, one big earnings week down, another big earnings week to go. We'll dive into the options market for a look at how traders are positioning for the reports out of AMD Lilly and more. More Fast Money to welcome back to Fast Money. Another jam packed week of earnings ahead. AMD, Eli Lilly, Uber, McDonald's, Palantir and Disney among the names on deck to report. My CO has been scoping out the options market for a look at how traders are gearing up for this action. Mike, what do you see?
- [39:51]
Mike Co
Yeah, some big moves expected in some big names that had big volumes today. Disney expecting a move of about 6% after they report AMD about 8%. Caterpillar expecting a move of about 4%. Uber 7% and Lilly about 6%. Now all of these names traded above average volume which is usually considerable anyway. But AMD was the most notable and the most interesting activity to me was the weekly 190 calls. More than 30,000 of those traded for almost $2.10 a contract. Largely institutional flow. Those buyers are betting that it could see a big upside move. If it does move that much, that's going to get us more than halfway back to the all time highs from early March of last year.
- [40:30]
Tim Seymour
We were just taking a look at AMD earlier this week. Tim, how do you feel? Tim, you've been in this in the past as the alternative to in video. How do you feel about it here?
- [40:39]
David Zerbos
Yep, I like it. I'm long remember and disappointed. You remember it's, it's the A in band by the way or blast depending on how we're doing it. So yeah, no, I think the risk is to the upside on this one. We priced in a lot over the last three months but we haven't really heard more about, you know, this new round of chips that I think are going to be that which at least put them in a solid second place.
- [41:05]
Carter Braxton Worth
Yeah, they've had revenue acceleration and when you look at the buyback that's in place, this is definitely the second to Nvidia. But if people are tired of riding that Nvidia that goes straight up and they feel like they've missed it, this is definitely where I would go.
- [41:19]
Bono
I'm going to be a wet blanket a little bit. I think that it's an investable asset for certain, but I can't shake those arm numbers out of the back of my head. And so, so that kind of informs me with a little bit of caution here, I'd rather just wait. And the truth of the matter is even if it is up the 8% and I'm buying into the story that 8% isn't going to cost me my investment in the name, I really just don't want to play the binary earnings Risk. And if I would, I'd probably do it like Mike Co would do it via options rather than owning the cash.
- [41:51]
Tim Seymour
Mike, thank you. Enjoy your long weekend. Coming up, utilities, the best performing sector. This. I'm joking. There is no long weekend. The Chartmaster has a couple of names he thinks could keep their rally rolling. He'll lay out the charts right after this. Welcome back to Fast Money. The utilities sector hitting a new 52 week high. It's also posted gains in the last seven months in a row. The Chartmaster says its run is far from over. Carter, you always come with some staggering stats on UTE that I think not many people are aware of.
- [42:28]
I
Well, let's get right to it. I just thought we'd do a follow up from exactly a week ago at this time when the sector was discussed. But let's do it for individual stocks.
- [42:36]
Carter Braxton Worth
First.
- [42:36]
I
The sector. You can see it there. 31 stocks, 1.3 trillion. That equals one Broadcom and a small weight in the S and P at 2.5%. Let's look at two relative performance charts. They're identical. And so this is XLU divided by spy, which is how you get a relative performance, a relative strength line. You can see those converging trend lines. We're at the lower band and we've bounced here every single time to the penny. Next chart has an up arrow. Same chart. I think we will bounce yet again. Now let's look at three individual names. The charts are identical because it's not about what they do. It's that this is a good technical setup for AEP. Look at the second of three. It's the same setup and the same chart for NiSource. Again a different business altogether. Well defined uptrends, good pauses and now just breaking out. And so XLU if you want to play the group or these three individuals are favorites.
- [43:33]
Tim Seymour
Tammy, you've long been a fan of utilities and you're in your own holdings that are not. I believe what Carter's pointing out. But do any of these look interesting to you?
- [43:42]
David Zerbos
Well, and a big fan of Carter's utility stats and charts and goodies. No, I'm a big fan. I'm a big fan because of the thematic elements of what's going on in the the sector. I'm a big fan. Based upon the margin profile of these companies, we know what's going on with demand. We know what's going on where they will actually be defensive in a lower rate environment. There's a lot of reasons to own utilities here, both technically as Carter pointed out, but fundamentally so. Yes, I stay long long constellation long next era. I think there's other ways to play it, but XLU is great.
- [44:14]
Carter Braxton Worth
Yeah nice source. I think the chart looks better than AEP only because AEP has outperformed Nice source on a year to date. But if you look back, let's throw in one of the outperform which has been vistra. That one has been literally on fire. But I agree with Carter. There's an under underappreciated asset with electricity and utilities in each and every one of our states.
- [44:34]
Tim Seymour
Up next, Final trades, Final trade time.
- [44:45]
David Zerbos
Tim Seymour well listen my house. The more we beat a joke, the funnier it gets. Therefore, enjoy the long weekend.
- [44:53]
H
Altria Carter Braxtonworth Copper Record Weekly drop.
- [45:00]
I
On Ever buy for a bounce following.
- [45:04]
Bono
I think that there are some generational demographic changes that are brewing under the surface. I'm staying away from Bud Grasso like.
- [45:12]
Carter Braxton Worth
A fun Friday show, didn't it?
- [45:13]
Tim Seymour
Sure.
- [45:13]
Carter Braxton Worth
I'm going to stick with home builders. Dr. Horton Dhi all right, thanks for watching.
- [45:17]
Tim Seymour
See you back here on Monday. Mad Money starts right now.
- [45:26]
Steve Grasso
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their 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 how will you.
- [46:07]
Melissa Lee
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Bono
In a world where every company is.
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Melissa Lee
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