Tim Seymour (2:33)

Yeah, we don't know that just yet, Melissa.

Eamonn Javers (2:35)

And we saw today a senior Iranian

Tim Seymour (2:37)

politician responding on social media to President Trump's suggestion that the US And Iran could share joint control of the Strait of Hormuz. Saeed Jalili wrote, they said the Strait

Eamonn Javers (2:49)

of Hormuz must be open.

Tim Seymour (2:50)

Then they said I'll insure and escort the ships. Now they say I'm willing to manage

Eamonn Javers (2:55)

it jointly with Iran.

Tim Seymour (2:57)

This, he said, is the very definition of a retreat. Iran's power has brought the United States to the table of realities. Then he put Trump at the end of Taco Trump there at the end

Eamonn Javers (3:08)

of his social media post.

Tim Seymour (3:10)

But President Trump told reporters today that

Eamonn Javers (3:12)

he believes that Iran wants to make a deal to end the fighting.

Tim Seymour (3:15)

And he said follow up conversations to this weekend's negotiations would happen as soon as today.

Carter Braxton Worth (3:23)

They want very much to make a deal. We'd like to make a deal, too.

Tim Seymour (3:27)

We're going to get together today by

Carter Braxton Worth (3:31)

probably phone because it's very hard to find a country. It's very hard for them to get out, I guess. But we'll at some point very, very soon meet. We're doing a five day period.

Tim Seymour (3:43)

We'll see how that goes.

Carter Braxton Worth (3:44)

And if it goes well, we're going to end up with settling this. Otherwise we just keep bombing our little hearts out.

Tim Seymour (3:52)

And combat operations are ongoing. CENTCOM put out a fact sheet today on the war detailing that US forces have flown more than 9,000 combat flights in the war so far, striking more than 9,000 targets and damaging or destroying more than 140 Iranian vessels. Melissa, back over to you.

Melissa Lee (4:10)

All right, Eamon, thank you. Eamon Javers, what did you make of the action today?

Eamonn Javers (4:14)

Tepid, I think, in a word at best. And the bond market didn't react. I think what scared the administration over the weekend, if I had a guess, was the bond market on Friday and the global bond sell off that's been going on now for the last couple of weeks. I think it's alarming. In 10 year, yields got north of 4.45%, I believe on Friday. And even with the move today, we're still north of 433. I think that's problematic and I think that's sort of why things are sort of. At least they're trying to find some sort of elegant way out of this thing.

Tim Seymour (4:42)

Yeah, I agree. I think, you know, the bond market definitely forced a hand here and it does seem to be a little bit of deja vu. It is a case where Friday afternoon we had a conversation, some of these different quotes came out right towards the end of Fast Money on Friday. Mel, we missed you.

Melissa Lee (4:58)

I missed you, Tim.

Tim Seymour (4:59)

And we were trying to parse for it without you. And ultimately the message was one of, you know, clearly there's some sense that there is a policy response to a lot of different things. I mean in support of at least what is should give equities more ammunition, that this isn't just about staring at the bond market or more more broadly, that the US has spoken to a number of different allies. There have been a number of different folks that have been involved in conversations that obviously have massive global implications. But if you bring it back to today's action, I would agree. I mean the fact that the VIX day over day is only down 2% I realize well off of some of the levels of Friday, but the dynamics here are important. The VIX went down to the 50 day, it bounced. There are key levels of support, there are key areas on the indices they've yet to get back up and over and those are the 200 days. So the question, and it's great to have Carter here tonight because we can talk about what's technically changed, what kind of damage there's been. But great news for the world if we're moving in a way that at least has a, the proper denouement of this. But denouement, which is a fancy word is also going to be.

Melissa Lee (6:10)

Do you know how to.

Tim Seymour (6:12)

Well, I, if we were doing a spelling bee, I bet I could do it. But I think the most important thing is it's a complicated word, it's a complicated exit from all this and I don't think it's going to happen overnight.

Melissa Lee (6:23)

Right. I mean if, if the markets really, if you, if investors really believed that there was the off ramp insight and that the war was about to end, this would not be the reaction at all. I mean we'd be much stronger and it would last through the day.

Karen Finerman (6:36)

We're only back to where we were Friday morning.

Melissa Lee (6:37)

Yeah.

Karen Finerman (6:38)

Right. So earlier in the day there was I think a 1200 ish or so points and you know, the market was up much higher than this. There's a lot of concern that it's not looking as hopeful as we all want it to be. Right. I think most people would like to have a quick safe exit. So I mean it's a nice bounce, but I think it reflects a great deal of skepticism. You know, we always talk about Trump uses the stock market as a proxy for how is he doing. And this would be, you know, not as strong, I think, a reaction as he hope. I don't also, it seemed to me the, the oil markets didn't fully take it in either. There was, you know, still they dropped.

Melissa Lee (7:21)

It dropped a lot, dropped its losses by half.

Karen Finerman (7:25)

And then so the backwardation I think is, is there was all. They were lower all across the curve, but not as much as one would hope. So I don't know. This is going to be more difficult, I think, to get out of than maybe we all hoped. So I don't know what to do. It doesn't change the way I invest, really. I don't, you know, I do, you know, tweak around the edges in the vix. Your point to the vix, really this was not a response like, oh, everything's great at all. It's still elevated, but I think it doesn't live here either. I think it probably goes up before it goes down.

Melissa Lee (7:58)

So if the stock market is, is President Trump's barometer, report card, whatever you want to call it, Carter, what is the prognosis? What do you see in here? Is there damage done at this point?

Will Lewis (8:11)

Well, sure.

Carter Braxton Worth (8:12)

I mean the thing is that it's ongoing and it's been happening for months. Right. At one point it was thought that it was because of and still is AI. Right. At one point the thought was that it has something to do with oil. At one point it has to do with rates. It's all of it. Valuations are high. We've come long way from the sort of the lows of tariff. But the action day to day, today in particular, you know, there's so many words. It's schizophrenic, right. It's impulsive, it's impetuous. The range alone in gold, just from the high of above 100, I mean oil right above 100 to 84, gold, even more extreme rates, stocks. It's all being, it's very reminiscent of I have a tariff now. I'm not going to make you get a tariff now. I'll give you half. It's all just on the words of one man. And that's not investing, right? That's, that's just impulsive and, and I'm not sure who's doing that. It can't be the biggest funds in the world lurching around. He said this, he said that. He didn't say this. He contradicts that. He's. He's recanting this. It can't be that. But the total tone of it is unsettled. Yes. Uncomfortable. And I don't think it's the kind of thing that makes people embrace risk assets. The other thing that's important is at the end of every day, the day has to be called a bullish or bearish day. And we could say, well, we're up. So therefore it was a bullish day for the S and P, but not really because of what you all started talking about. It faded. It couldn't stick its landing. We closed at or near the low of the range. Tepid was one of the words used by Guy. But, you know, it's also feeble. It's sort of last gasp. It just. Or as you said, you were surprised, right, as a group, how little the reaction, if it was so clear, and I'll stop here, that this was the end, it was over. The market reaction sure doesn't suggest that.

Melissa Lee (9:58)

I mean, the semiofficial Iranian news agency said there was no communication between the Trump administration and anybody in Iran. And then you had the politician basically, you know, hashtagging Taco Trump at the end of his post on Truth Social. There's, you know, a high degree of skepticism here on the part of the Iranians as well as here.

Eamonn Javers (10:15)

I think one of the things I saw, the only person the President is speaking to was cnbc, which I thought was quasi amusing, but it again, it speaks to if this was the only problem that the market was facing in the form, I'd say, you know what, maybe there's some light at the end of the tunnel. But unfortunately, I think this is one of many problems that the market's been facing. We wind up talking the most about for obvious reasons. But there are other things out there as well. The labor market seemingly is deteriorating. The bond market is clearly selling off, and I'm not sure exactly why. I think I do know this global debt problem is a problem and it's not just the United States, the global yields as well. So if it was just the war, maybe I could see some green shoots. It's not just the war, though.

Tim Seymour (10:52)

I think the sentiment here is also, you know, not surprising. The market is echoing what we're talking about. But, but truly, investors look at today as an opportunity to hedge up. Investors look at today as an opportunity not to buy the dip. Investors look at today as an opportunity to really assess where there are parts of the market that are going to continue to, to probably be under duress. That's been the changing story here. It's not just that we think that the Fed is, is off the table or whatnot, but the protracted nature of this has allowed people to at least listen to companies that say, hey, you know, we're not totally sure where earnings are going to be out a year, but there's no question we are looking at the world a little bit differently already. We're going to have an earnings season which suddenly is not that far away and is going to give corporate insight, corporate leaders, excuse me, C suite, a chance to look at their business and not have to be overly optimistic. Especially when you compare that to, we were talking about 15 to 25% EPS growth in 26 that justified a market that was trading at long term multiples. That didn't really make a lot of sense.

Melissa Lee (11:56)

There is a free pass now to be cautious. There's a free pass to take down guidance to, you know, say a lot of things are unknown. So why wouldn't you take it?

Karen Finerman (12:04)

You would. I mean, we're going to start off with the banks. J.P. morgan reports April 14. I always like to get away from all macro stuff and see what's actually happening in the companies that, that make up the American economy. So JP Morgan's right at the center of it. They're going to be, they always lean toward the more conservative anyway. Why not here it's a free pass. What they cannot do is take charge offs, take reserves that they don't yet need. They're not allowed to do that. Right. Because that sort of shields income. So they're not allowed to do that. But they can talk it down and they should talk it down. And so I think going into earnings, the setup might not be terrible. I'd much rather have the stocks be down than up. And I think the quarter is actually going to end up being okay. Maybe people won't care about the quarter. That was then, this is now. It's a whole new world. But you're right, I think we'll see conservative all over and a lot of companies will get a pass for that conservatism.

Melissa Lee (12:59)

Yeah. For more on bonds and rates, let's bring in Jim Bianco, president of Bianco Research. Jim, great to see you. We're talking about yields and what yields are doing, they go higher seemingly no matter what the narrative in the war is. What, what is the story of the yields at this point? What is a bond market telling us?

Jim Bianco (13:19)

I think if you wanted to Ask do yields go up or down? In general, you have to look at a measure called nominal gdp. That's real growth plus inflation, the two together. And I think what the bond market has been seeing here is a fear that we're going to get more inflation, then we're going to get a hit to growth and nominal growth is going to go up. That's why you've been not only seeing yields go up, but you've also been seeing all the rate cuts we were talking about disappearing. And now we're looking at the end of the year with small chances of rate hikes, not about 50%. But it was the day before the war we were pricing in two rate cuts. Now they're gone. It's about more inflation than you will see in a slowdown in the economy. And frankly, it's not surprising because I was one, like many others, was talking about the day before the war that this was a resilient economy, that it seemed like it was hanging in there and it was taking all the blows. And if it's doing that, then all we're doing is we're adding inflation to it.

Eamonn Javers (14:15)

Jim, the dollar plays into this as well. And it's a global yield story. I mean it's going around all over the world. But the US Dollar, the resilience and the strength over the last couple of weeks, is it a flight to safety or is it actually something other going on here? Is this a sort of a change in direction now?

Jim Bianco (14:30)

I think it's largely a flight to safety because you've also been seeing it with some of the other flight to safety instruments that I'm thinking like gold and silver and maybe some of the emerging market currencies as well, going down that people, you know that whenever you get into a period of stress, it seems like it's an old joke, but it seems like global investors, step one, get all your money in the dollars and then step two, figure out what's going on. And that might be a little bit of what we're seeing right now with the strength in the dollar.

Tim Seymour (14:57)

So Jim, then let's, let's talk about the rest of the world because this was a seemingly a brand new frontier and a golden road for a lot of investors over the last 15 months. But one of the first things we heard out of the ECB was a much more hawkish tone in terms of at least relatively relative to even what I think we heard from other central banks. BoJ finally has had a chance. This gets him in maybe off there the ledge of their branch to acknowledge that there's inflation out there. Are you more concerned about other parts of the world, which you and we have all discussed? Higher rates around the world have also been a magnet to pulling up US Rates.

Jim Bianco (15:33)

Oh, absolutely. Because before, go back to the day before the war, what we were talking about, we were talking about the rest of the world having an inflation problem. We were already pricing in rate hikes for Europe. There have already been rate hikes in Japan. That was before the war. Now you've exacerbated that trend and now we're pricing in as many as three rate hikes for Europe going forward. So we're going to continue to see rates move up. What's going to change all of this is end the war, open the strait, get the ships moving, then we could talk about where interest rates should settle down to. But until then, all the, all the indicators are pointing at more nominal growth driven by higher inflation around the world and higher interest rates.

Melissa Lee (16:16)

So higher inflation but not a real hit to growth, Jim. I mean it's sort of a fine, it's like a tightrope here. So at what point do you think that we're pricing in inflation plus a hit to growth then or a stagflation sort of environment?

Jim Bianco (16:33)

Well, if you wanted a roadmap for what we're talking about, we're talking about 2022. The same thing happened then. Initially what happened was we had another shipping supply constraint. It was with container ships. Inflation started to move up. Yes, growth fell. We had a negative first quarter GDP in 2022, but we got way more inflation because it went to 9% than we did with growth falling. And the Fed raised rates from 0 to 4% in a year and interest rates went up, you know, three full percentage points the 10 year yield did in 2022. Again, the same argument there is that you got more inflation, you got slower growth. So we've seen this story before just four years ago and it seems like we're starting to play that out now. It's not container ships like it was four years ago, it's tankers that is causing this supply, supply problem.

Melissa Lee (17:24)

Jim, great to speak with you as always. Thank you. Jim Bianco.

Jim Bianco (17:27)

Thank you.

Melissa Lee (17:28)

Bianco Research. How do you think about this?

Tim Seymour (17:31)

I think that we were already in a world also where we were seeing CRB and you know, the commodity, commodity rind index, all these different input prices. I mean, look at where copper prices were, were before this. I, you know, Dr. Copper was also one of the first things to get Knocked down And we all know there was a ton of speculation both in gold. Gold miners. Copper. Copper miners. But no, I think we had inflation.

Melissa Lee (17:56)

All right, we've got a news alert here that we do want to get to on Apollo. The company saying in an SEC filing that it is capping withdrawals from its private credit fund as redemption requests hit about 11%. We take a look at the, the shares in the after hour session. They're down by one and a half percent. Of course this whole entire group has been decimated basically on fears about private credit issues. Massive redemptions that would then fuel for sales of assets or sort of a, I don't say a death spiral but not a good cycle to be in.

Eamonn Javers (18:27)

And the stocks traded in kind today. I mean this, the stocks Blackstone was down today. At the end of the day I think Apollo was down. So maybe there was an in anticipation of something, maybe something was leaked. However it's not good. I mean people this I'm not saying it's systemic, I'm saying it's problematic and I think the banks are trading on the back of it that way and I think quite frankly you're going to start to see it in the at some point as well.

Karen Finerman (18:49)

So I think you know this cap was there 5% and so it was well north of that 11%. So I think we'll just continue to see is if money stuck people panic. Right. They don't like that. So I think we'll just continue to see it reach the cap for the next several quarters.

Melissa Lee (19:07)

Right. Has to work itself out.

Karen Finerman (19:09)

Right. And I think this is going to happen across, across the entire spectrum until we have more clarity which I don't think we'll have soon, certainly not on you know one of the fears is the software exposure and how that's going to play out. I don't think we'll have clarity for a bit. So I think we're going to be be seeing this headline again and again unless like Blackstone you get more money in right. And whether it's from employees or whatever and then you can meet redemptions. But I think got to think the whole it's going to happen for a couple of quarters.

Melissa Lee (19:39)

Coming up the outlook on Microsoft. What one top analyst says software stocks issues why they're mounting. He'll join us next to lay out what he sees in store for the tech giant. Plus sports betting stocks winning their latest hand against prediction markets. What's got these names riding a hot straight to start the week. Don't go anywhere fast money's back in two.

Schwab Representative (20:02)

Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com trading thy ticket lady, Jennifer of Coolidge.

Melissa Lee (20:33)

Well, many thanks, good sir. Here is my Discover card. They accept Discover at Renaissance fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Getteth with the times, with the tines. You're playing the loot. Yeah, and it sounds pretty good, right? Discover is accepted at 99% of places

Commercial Narrator (20:55)

that take credit cards nationwide, based on

Tim Seymour (20:58)

the February 2025 Nielsen report.

Melissa Lee (21:00)

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 say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the

Karen Finerman (21:19)

task at hand and make an extra sale or two. Sometimes I do miss the bonding time. Sometimes.

Tim Seymour (21:24)

AT&T business Wireless connecting changes everything.

Melissa Lee (21:31)

Welcome back to Fast Money. Shares of Microsoft down more than 20% so far this year. The worst performing stock in the so called Mag 7. One analyst says the tech giants issued could be mounting. Ben Reitzis, Amelius Research joins us now. He just cut his price target on the stock. Ben, great to have you with us.

Ben Reitzis (21:46)

Hey Melissa, how are you?

Melissa Lee (21:48)

So the crux is they have to fix Copilot. I mean it was pretty in February when they said that they sold 15 million seats out of what, a base of 450. That seemed kind of paltry. What can they do to fix it?

Ben Reitzis (22:03)

Well, that's a question for them. They're not really telling anybody. But what they did is they reorg. They reorged the division for Co Pilot and now they have the guy that was running it working on models. That's a red flag. I mean you rarely reorganize anything into strength and look all over your network. All day they were talking about this call and one person after another was talking about, you know, a funny experience with Co Pilot. We all know it's a little bit of a punchline. So I don't think Satya is really happy with it. And I Think that the reorg signals two things. Obviously they're not happy, but two, with Mustafa going to focus on models, they're going to have to spend more on their own models because sharing IP with Open Air is not working out too well. So the street might get negatively surprised on higher R and D, higher capex coming which hits free cash flow and then that all hits on depreciation. So we have to see if there's any margin upside for this company. Actually, given the footfall in Copilot, will

Melissa Lee (23:07)

they still be able to keep up their Azure revenues as they are working more intensely on their, on their models? Will they be using some of that capacity themselves?

Ben Reitzis (23:18)

Not only that, they'll be using. They're investing in their own models which, which ups R and D and then they have to use more internal capacity and God forbid people start using this thing because then they got to inference and that's going to take more capacity. So it's like damned if they do, damned if they don't because we got to have a lot of capacity coming online because they're going to have. If they fix Copilot and actually get people to pay for this, which I'm still not thinking is going to happen. I don't know anybody that's really getting people to pay extra for AI. But anyway, then they, they actually get people to start using it, then Azure upside will be less than people think because it's going to consume more of Azure unless they get tons of capacity online faster than expected.

Karen Finerman (24:05)

And it's Karen, thanks for being on. Do you extrapolate anything to the other hyperscalers either at the, you know, that Microsoft's troubles is good for them or that or anything from that?

Ben Reitzis (24:17)

I think Google and Amazon are going to crush their cloud numbers over the coming quarters. I think that they have a lot of spigot. Their spigot is coming from the open. The anthropic spigot is coming through their pipes more so than Microsoft's and that's been an exponential on the exponential of the growth in recent months, in recent weeks. And then you're going to see that in the upside of their cloud revenues more than Azure because Azure is not going to have the capacity to show the upside now. The Azure growth is going to be great. It'll be maybe in the high 30s, but it'll be hard for them to put a four in front of that number consistently. While Google's numbers and maybe even Amazon's as we go throughout the year systematically beat and can even beat whispers Ben,

Eamonn Javers (25:03)

is Microsoft the shares sniffing out some weakness in the labor market? Because for Microsoft especially it's important to have it, I don't say robust but at least a strong labor market.

Ben Reitzis (25:14)

Oh absolutely. I mean this is a SaaS company at heart really that happens to have Azure and Windows licenses. And so it needs labor, particularly knowledge workers to be using their stuff more and willing to pay more for it because a lot of the SaaS game is just systematic price increases and jamming it through their pipes. And that's why this SAS dam is bursting. As you know we've been saying AI is eating software. But part of the reason that calls worked is that most investors have come to grips with gee, these guys are really just a seat price increase game. And we thought it was growth and that's no way that's going to continue. And so we do need that to continue with Microsoft to put up those mid teens growth figures and productivity and business processes which is its biggest and most profitable segment.

Melissa Lee (26:03)

Ben, always good to see you. Thanks.

Ben Reitzis (26:05)

Thank you.

Will Lewis (26:06)

Take care.

Melissa Lee (26:08)

Carter, how does that chart look? Not very good. Does it?

Carter Braxton Worth (26:11)

Well, I mean there's a lot of correlation obviously between let's take Microsoft and the whole group as measured by igv. But the, the difference is that they all started to bounce on 24 February and to a large extent many of the names have, have maintained the higher levels since the bounce. Microsoft is right back to those lows of February 24th. So on a day to day, week over week relative performance basis, it's very poor. I think it's headed lower.

Melissa Lee (26:39)

If you listen to what Ben said, it didn't sound like he had a $400 price target on the stock even though that's not that much higher. It sounded like he was outright negative on Microsoft.

Jim Bianco (26:48)

It sure did.

Tim Seymour (26:49)

But, but it gets back to, you know, I don't, I don't know where his EPS number is for next year but if he's like the rest of the street, it puts the stock at around 21, 23 times forward and on trailing we know it's 21 times. So you get to a point here where I understand that, but I'm sorry, it's Microsoft, they're not. Yes, some of this is getting eaten. The margins I think are going to be better than people think.

Melissa Lee (27:12)

There's a lot more fast money to come. Here's what's coming up next.

Tim Seymour (27:16)

Lady Luck smiling on the sports betting

Melissa Lee (27:19)

stocks today how a ruling in Nevada

Carter Braxton Worth (27:21)

is boosting these names and causing some prediction pain. Plus more headwinds for airlines surging fuel costs causing one operator to scale back.

Melissa Lee (27:31)

Why you to need United is positioning for oil to stay higher for longer.

Tim Seymour (27:36)

You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.

Schwab Representative (27:48)

Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com trading thy ticket lady Jennifer of Coolidge.

Melissa Lee (28:19)

Well, many thanks good sir. Here is my Discover card. They accept Discover at Renaissance fairs. Yeah, they do here. Discover is accepted at the places I love to shop. Geth with the times. With the times. You're playing the loot. Yeah, and it sounds pretty good, right? Discover is accepted at 99% of places

Commercial Narrator (28:42)

that take credit cards nationwide, based on

Tim Seymour (28:44)

the February 2025 Nielsen report.

Carter Braxton Worth (28:47)

Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.

Melissa Lee (29:18)

Welcome back to Fast Money Sports bettors winning their latest hand over prediction markets. A judge in Nevada temporarily blocking from operating in the state after regulators said the company didn't have a gaming license. DraftKings and FanDuel parent Flutter getting a boost on the news along with gaming stocks like MGM and Penn. Tim, what do you make of the development?

Tim Seymour (29:38)

Well, I think it's, it's great short term reprieve but if you part of DraftKings issue is gets back to this was a company that was de spacked and came out with a valuation that never made sense but it could be justified in the growing addressable market that was online sports betting. We're now at a place where not only has the the environment been so competitive and predatory that there's really very little room for this company to make the kind of money people think. I think Kaushi and Prediction markets are here to stay. It's like everything else. You just have to figure out how to regulate them.

Karen Finerman (30:15)

That's a big thing. I mean, I feel like if you go into one of those and see, oh, in the next three hours we're going to see xyz, I mean, you've got to think that the person on the other side has a chance of knowing something that you can't possibly know. Right. I don't know. I just find it kind of absurd. A bit of the Wild west and I would think it would need to be regulated. That would be better for them, actually, I think.

Melissa Lee (30:40)

Right.

Karen Finerman (30:40)

In the longer run.

Melissa Lee (30:41)

Yes. Yeah.

Eamonn Javers (30:42)

I think they've openly talked about the want for regulation and how they want to do things the right way. I will say though, the DraftKings look at the daily chart today. It did not trade well. Open on the highs, closed on the lows. Having a stock that had been basically sold off over the last six months, I mean, that is not an impressive performance. With this headline and with today's tape

Melissa Lee (31:00)

coming up, United's big warning how the airline is navigating the surge in fuel costs and the flight cancellations that could impact your travel plans. The details on Fast Money returns. Welcome back to FAST money. Stocks rallying to start the week but closing well off their highs of the session. All after President Trump said the US And Iran have held productive talks. The Dow surging more than 1100 points at its high of the day but still closing more than 600 points higher. The S and P and Nasdaq both gaining more than a percent, all three indices snapping a three day losing streak. Shares of Amazon jumping over 2% today. The company's MGM Studios getting a big win with its project Hail Mary film this weekend. The movie starring Ryan Gosling taking in over $80 million at the box office. The highest grossing debut of any movie this year so far and Amazon's best film debut ever. Excuse me. Shares of Estee lauder falling nearly 8% today. The cosmetics company reportedly nearing a deal to combine with the Spanish beauty group that owns Gauthier and Dries Van Noten. And Chevron CEO Mike Wirth weighing in on energy volatility, saying the Iran war impact on supply disruption is not fully priced into the oil market and that it's trading on scant information and perception. Crude settling above $88 a barrel today, pulling back more than 10%. Brent trading around $99 a barrel after topping under 12 on Friday. What do you make of the comments from Mike Worth? I thought those are interesting.

Tim Seymour (32:31)

Well, I just, you know, the paper versus the futures markets in oil, the disruption that we've seen fascinating today though that kind of like what you saw with golden gold miners. But you saw oil prices drop and you saw, you saw the XLE and Chevron and EXAM rally because they can't rally under a oil price shock, but they can rally under generally higher oil prices, especially when these US Players don't have the same kind of exposure.

Karen Finerman (32:58)

Let's say there were a cease fire tomorrow. I don't know how long it would actually take to I mean it's not like the, there's damage that's easily fixable. There's a lot I know there's, you know, here in the US we're in a very nice position to be in. But I agree, I think it's going to be a long time and feeds through the economy everywhere.

Melissa Lee (33:17)

Meantime, airlines taking off today as crude prices fell but oil still up 32% since the Iran war began. United Airlines CEO Scott Kirby warned over the weekend that the company will make cuts if fuel prices remain elevated for an extension extended period. CNBC's Philip Phillip Bowe has more on this.

Philip Bowe (33:34)

Phil and Melissa, Scott Kirby is expecting fuel prices to remain higher for longer and that's part of the reason he sent out the employee memo on Friday evening essentially outlining the steps the company is taking to make sure that they can handle this higher cost. They're going to cut 3% of capacity, primarily flights on the slower days, Tuesdays and Wednesdays, the less profitable routes, overnight routes, the redeye flights. Long term investments remain in place. They are still planning on spending as much as ever when it comes to new aircraft. But here's the key. They expect higher oil for longer. And as you take a look at jet fuel, the important thing to keep in mind here is that the crack spread which is really crucial in the pricing of jet fuel, it's more than doubled over the last month, month and a half and the airlines cannot sustain that. Now they got a little bit of relief today, but United is assuming that oil goes to 175 a barrel. That's what Scott Kirby said as a high and it stays above 100 through the end of 2027. I've had people ask me since then, well, is it possible it could come down? Sure, it could come down. They can adjust their business plan but that's what they're making the assumption of right now. And why are they cutting flights? In his note, Scott Kirby said, look, there's no point in burning cash in the near term on flying that just can't absorb these fuel costs. So as a result, as you take a look at shares of United, keep in mind that they are seeing strong demand and yes, they have raised fares as all of the airlines have, and yet that's not going to offset the increases in jet fuel if it is sustained at the current level. We're going to be talking with Scott Kirby tomorrow morning first on CNBC on Squawk on the Street. Melissa, this is going to be an interesting conversation because he's very candid about his belief that you have to manage for the long term. You cannot assume that this conflict may be over in a month, month and a half and jet fuel prices are going to come down and they can always adjust. If things do change, they can adjust. But for now, this is their game plan.

Melissa Lee (35:35)

You mentioned his commentary about burning fuel on routes that won't be profitable. I mean, embedded in this 3% capacity cut, is there an assumption that there is that there will be soon, at some point soon demand destruction because of higher airplane airfare costs?

Philip Bowe (35:50)

Well, there will be demand destruction. And right now United and the other airlines and they said this last week when they were all at an industry conference, the JP Morgan Transports conference, they all said that they are seeing much stronger demand than you might expect in this environment. In fact, most of them raised their revenue projections for the first quarter. But let's be clear here, Melissa. At some point there is a lag, but at some point if you have to continually raise your fares and you see jet fuel prices at these costs and other things in the economy start to slow down, there's a good chance that you're going to see demand slow down as well.

Melissa Lee (36:26)

Right, Phil? Thank you. Phil LeBeau again. Phil's talking to Scott Kirby tomorrow in the 10:00am hour. What do you think of the this

Eamonn Javers (36:33)

is a tough one. You look at a Delta chart, go back to January of last year, went from 67 to 40 almost in a straight line. Now it recovers covered. Obviously we just made a new all time high but we're in the midst of one of those types of moves to the downside. And I don't know how to handicap this because if the economy is slowing, if the labor market is deteriorating, if energy prices are going to continue to be where they are, if people are reticent to fly for a number of different reasons, it's really hard to be bullish, I think in the airlines.

Melissa Lee (36:58)

How did the charts look, Carter?

Carter Braxton Worth (37:01)

Well, a lot has been discounted to Be fair if you were to look at the four or five big ones. American down 38% at its lows of two or three days ago from its peak of gen February. United down 30. Southwest down 31. Delta 29. So my hunches, they're stabilizing and that obviously no one can, I mean no one can predict 175 a barrel to 50 a barrel. We you know the last time Wall street did that, we the invasion of Ukraine.

Tim Seymour (37:27)

Right.

Carter Braxton Worth (37:27)

And their targets are 250. Once you start hearing that oil collapsed, let's just say that a lot has been discounted. My hunch is to play for a bounce.

Tim Seymour (37:35)

I like that call. I think, I think too much has been discounted. In fact go to CNBC Pro. I actually did a trade on this. I think Delta who also has their own refinery, a bit of a hedge on themselves. They guided in that AK that Phil referenced. They're going to have EPS not 5 to 7% but actually up 7 to 9% and I think they're going to finally get past pre Covid numbers in terms of eps. I think stocks cheap.

Melissa Lee (37:59)

Coming up, a bumper biotech company in smed. The stock looking to bounce back from a rough stock start to the year. The trial data pushing that one higher and what the CEO has to say about the results. He'll join us next when Fast Money returns. Welcome back to Fast Money. INSMET jumping almost 6% after its latest trial data. Patients with a rare form of bacterial lung disease seen meaningful improvement when using Insmets Ericase in combination with antibiotics. Ericase was previously approved to treat a non responsive form of the disease. Expanding the drugs label to include first line treatment could take the addressable market to 200,000. That is up from the current 30,000. This according to Insmet. Joining us now for more is InSmet CEO Will Lewis. Will, great to see you.

Will Lewis (38:46)

Thank you.

Melissa Lee (38:47)

In terms of this expansion of the address of the market that is enormous. How should we think about it if you're filing for the NDA second half of 2026 and when the drug can be for sale under this label.

Will Lewis (38:58)

So we will file for the expansion of the label in the US by the end of the year and Japan as well. And that is important because there are actually more patients in Japan that have this disease than there are in all the United States. So it's a very substantial market as well. But this is indeed an exciting day for patients with this condition. This would represent the first time a drug was approved formally to treat this just as it was the first time when it was used for refractory patients. So it's a big advance. We saw improvement in patient response in terms of symptom scores, culture conversion, that is the eradication of the underlying infection as well as it happening faster and more durably.

Melissa Lee (39:36)

So total, that expansion of the total addressable market should happen in 2027. Can you sort of give us what the contours will look like in terms of launch?

Will Lewis (39:44)

Yeah. So we're going to take the target product profile that we'll derive from today's data, which is obviously very positive, and go out and understand what the journey to peak sales will look like. This year we estimated we would do 450 to 470 million dollars for this product in just the refractory market. So thinking about a sevenfold increase in the addressable market sets us up to make this our second blockbuster product of what we think are going to be three. Because we had Brin Supri approved last August, we recently announced that we thought, we believe we will do over a billion in sales just in Brynn Supriya. 450 to 470 for Ericase, expanding with this label. And then the third product, tpip, which is in four separate phase three studies for pulmonary hypertension.

Eamonn Javers (40:25)

So we know the story, I think, pretty well by this point, and you've done an amazing job. What don't we talk about that you're excited about, that you can talk about that's in, you know, phase one or two right now.

Will Lewis (40:35)

So the earlier stage programs that we have, and they number upwards of 30 that are percolating along. The one that I would probably draw a circle around right now is our gene therapy for ALS that is now dosed two patients. We're very excited by the preclinical data there. This is a very difficult to treat disease. It's obviously fatal and tragic for anyone who experiences it. But we're trying to advance what we believe could be a really impactful therapy there, and we should have data from that by the end of this year, beginning of next year.

Melissa Lee (41:03)

Has AI changed how you research these drugs or how you do these trials?

Will Lewis (41:08)

In fact, we have an AI program out of our New Hampshire research facility that is focused on using AI to de immunize therapeutic proteins. So the short answer is yes. It's affecting pretty much every aspect of the business from how we operate, how we run things commercially, clinical development, but also importantly in drug discovery, as I mentioned. And so I would add guide to the one I just mentioned, the program coming out of New Hampshire which is for the treatment of gout and that is a derived drug which will be entering the clinic next year.

Tim Seymour (41:39)

So. Well, with a third product in the pipeline here, a lot of exciting news and some of the pharma majors falling all over themselves for, for exciting new avenues and pipelines. However you want to handle that now, it's like what's going on out there, it seems like it's actually despite the headlines in the world, it's a pretty exciting time. And biotech certainly can be kind of defensive here. But in the strategic and in the M and A world, obviously you're not going to comment on what's going on with you. What are you seeing out there?

Melissa Lee (42:07)

I'm going to add to that. Before you answer, you're on. Like when, when analysts send out tables of takeout targets in Smart is always on that table.

Tim Seymour (42:15)

Okay, so we've, we've taken, we've made it, we've taken that off the table. But, but it would be really helpful from your seat to hear what you think is going on inside the industry. What's.

Will Lewis (42:26)

Yeah, well, I think what's going on right now is obviously health care is a defensive place to play, but within health care, biotech tends to be more volatile. We sit in a very unique position as a mid cap company with a series of what we believe are going to be blockbuster products, which is very unusual. We have three of them. We like to say we're three for three. And that sets us up for growth for not just the next year, but for the next three to five years at what I think is going to be an increasing and interesting pace. Behind that, as I mentioned a moment ago, we have a number of programs in the pipeline that does make us a very attractive company. We're well aware of that. But our mission is to create medicines that are first or best in class and keep our head down and stay focused on that.

Melissa Lee (43:04)

You're not looking for a partner or anything like that?

Will Lewis (43:06)

No, I don't believe in partnership as a general rule. I think if we are able to develop a medicine that's going to have impact on patients, no one's going to know the drug or the patient population better than we are. And so we're going to bring our resources to bear to launch it at ourselves.

Melissa Lee (43:18)

Well, it's always great to speak with you. Thanks for coming by.

Will Lewis (43:20)

Thank you.

Melissa Lee (43:20)

Will Lewis, CEO of insmed. Coming up, some momentum in motors. What the Chartmaster season store for auto stocks like GM and Toyota and whether he is taking this trade for a spin. That's next for Fast Money into. Welcome back to Fast money. Auto stocks off to a bumpy start to the year, but The Trustmaster believes two names in the space are about to shift into Dr. Carter Worth. What did the charts say?

Eamonn Javers (43:51)

Sure.

Carter Braxton Worth (43:51)

Let's get right to it. I got three comparative charts and then two stocks I'd like to single out. So if you look at the MSCI All Country Global Auto Manufacturing index on a 20 year basis versus the S& P, it of course has lagged that orange line lagging the blue line. Let's pull it into 10 years. You'll see the same thing. A lag. Let's do it just on a very short term basis. Year to date you're talking about again down some 15, 16% versus the S&P down 3, 4. But two stocks in particular do very timely to my eyes. So let's get right to it. The first, this is of course the largest U.S. manufacturer, automobiles. General Motors is down some 17/ percent and it went right to its 150 day moving average and bounced to the penny. I like that kind of action. The second is the largest auto manufacturer in the world, Toyota, and it went down to its 150 day to the penny, undercut a little bit and then closed right at it. So both stocks down some 17, 18% or thereabouts from their highs of just five, six, seven weeks ago. And I think the bounce potential is excellent. Their price action today was very good. Just before we end, it's important to note that of course autos overall worldwide are very small part of the global equity complex, only one and a half percent, but they account for some 7, 8% of global GDP in terms of parts and dealerships and OEM and all of the sort of ecosystem associated with auto is a very important part of global commerce.

Melissa Lee (45:27)

Quickly, Tim, your pick of these, it'd be gm.

Tim Seymour (45:30)

And again, it's a profitability as much as it is again them taking market share. It's been a difficult year in terms of tariffs and whatnot, but companies never been better run.

Melissa Lee (45:39)

Up next, final trades. Do you not miss our next CNBC Pro Live event, wealth for women, May 28th right here at the NASDAQ Marketsite in New York City, including our own Karen Feiderman. Limited tickets still available. QR code on your screen or visit cnbc events.com wealthforwomen and speaking of, it was just announced this morning that Karen's podcast How she does it has won a Gracie Award in the educational audio podcast category. Congratulations, Karen.

Will Lewis (46:22)

Thank you, Gracie.

Karen Finerman (46:23)

Yeah, like Gracie Allen.

Melissa Lee (46:25)

Yes, exactly.

Tim Seymour (46:26)

Come on, guy.

Melissa Lee (46:27)

Time for the final trade. Let's go around the horn. Carter, Braxton, Wirth.

Carter Braxton Worth (46:32)

Both General Motors and Toyota Long playing for a bounce.

Melissa Lee (46:36)

Timbo.

Tim Seymour (46:37)

I mean, I'm going out to listen to Karen's podcast right away and then I might jump on an airplane and if I did, it would be Delta Yale.

Melissa Lee (46:45)

Karen.

Karen Finerman (46:45)

Yes. So Golar has had a big run with all of this situation in the Middle east, but it's had a huge run. So sell some upside calls.

Eamonn Javers (46:53)

You know, we have this great crew here. Eyes on Miles. We get a camera on. It's Miles Ross's birthday. Round of applause for Miles Ross.

Melissa Lee (47:05)

Thanks for watching Fast Money. Happy Birthday, Miles. Mad Money 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 Snoring Gasping during sleep?

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