← CNBC's "Fast Money"
CNBC's "Fast Money"
Big Tech Earnings On Deck… And President Trump Signs GENIUS Act 7/18/25
00:43:54
Gearing up for Big Tech’s second-quarter results, ahead of Alphabet and Tesla earnings next week. And Why Wall Street isn’t buying Netflix’s AI bet just yet. Plus the next move for crypto as President Trump signs the GENIUS Act into law. How it will impact Bitcoin’s record run and the stablecoins in the space. Fast Money Disclaimer
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- [00:00]
Courtney Reagan
Say you've always wanted to take a spontaneous trip to the Caribbean. Here's the thing, if you get smart with your money, you can do things like that. With Empower, you can start making the most out of your money so you can get out and live a little. Isn't that why we work so hard to have some fun with our money, like treating yourself to something special or spontaneously doing something extra for a loved one? So use Empower and get good at money so you can be a little bad. Join their 19 million customers today@empower.com not an empowered client, paid or sponsored. Don't just ride the index. Seek to outperform it with Felc, the Fidelity Enhanced Large CAP Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other ETF. Discover FELC, the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus and offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail in index as compared with passive ETFs. Fidelity Brokerage Services LLC member NYSE as IPC.
- [01:36]
Melissa Lee
Live from the NASDAQ markets in the heart of New York City's Times Square. This is Fast Money. Here is what's on tap tonight. Big tech on deck. Results from the first two MAG7 stocks to report this quarter. What we can expect to hear and what stage it will set for the rest of the market and a theory I'm playing catch up the Crypto More than 40% just this month, far outpacing the likes of Bitcoin. Is it time to put stock in this trade? And how much higher can it go? Plus, housing starts rising in June. But is the industry really setting a strong foundation? Sarepta sinks over new concerns for its muscular dystrophy drug and a breakout for Alibaba. How the traders are playing the rally in the Chinese Internet giant. I'm Courtney Reagan in for Melissa Lee this evening. Coming to you live from Studio B at the nasdaq on the desk tonight we have Bono and Eisen, Courtney Garcia, Tim Seymour And Mike Koh. And we will start with the countdown to a very big week of earnings. Alphabet and Tesla headlining next week's action. But we also get second quarter results from names like General Motors, Coca Cola, Chipotle and more. The reports come as broader markets continue to trade near all time highs. The Nasdaq setting another record at the close. And while the S and P also set an intraday record, both it and the Dow ended the day with slight losses. But will next week's results fuel the fire for stocks 4 put an end to their record rally? Tim, what do you think? We're going to get an awful lot of reads from yes, big tech but like we mentioned, Coca Cola, General Motors reads really across the board. What should we be expecting? How do we position?
- [03:07]
Tim Seymour
Well I think the market is certainly positioned that, that the tariff impact is, is less than a headwind than we thought going into Q1 at least expecting Q1 earnings I should say. And so it's a very different backdrop and I think it sets the market up for, for possibly a little bit more caution here as we really get into the meat of it. But if we talk about Google, this is a company that has really underperformed the rest of the Mag 7. It's probably done half of what Microsoft has done over the last three months. And I, and I think that that set up is actually quite good. Comps are easy. I think there's better ad spend with a little more clarity around tariffs. I think what we've seen in terms of their cloud business, it's fine. I think YouTube's going to be a bright spot and I think the company itself is priced at least attractively even relative to itself given the backdrop of where people are always concerned about where multiples are coming in. So it's a, it's a big week. I do think that the earnings expectations overall from the analyst community, from the investor community have moved higher and I think that's something that needs to be watched.
- [04:07]
Melissa Lee
Bottom one I'm sort of looking forward to some focus on the fundamentals when it comes to companies rather than perhaps the big macro picture, although it is impossible to separate the two all the time. What are your expectations do with what he's talking about with sort of the difference in Google and Microsoft. Does Google have some ground to make up based on what they tell us?
- [04:26]
Bono
Well in terms of performance they certainly do. It's trailed the Mag 7 is now the Mag 3 or 4 and that continues to we see switching in and switching out of who those top performers are There, I think with the Alphabet story, it really is going to be about whether or not their incumbent search business has the legs necessary and whether or not they are setting up the transition into a kind of driven search and they can kind of defend ground there. Again, I don't think it's necessarily important that they get it right this quarter, but I do think, being that they've been under scrutiny, that investors are really going to be looking under the hood to see whether or not they have, you know, a legitimate answer to what their plans are going forward. The other thing that I think you're going to start to kind of see is insight into capex spend and we have had this kind of resurgent if you start to see a bit of pullback in capex or capex related plans. But perhaps people think twice about that. But I think ultimately we do want to see the earnings from these tech players, the mega caps, because them and the adjacent plays have really been what's it really been? What have taken us to this next leg?
- [05:29]
Mike Koh
Higher.
- [05:29]
Melissa Lee
Yes. So many interesting points there. Of course, Courtney has been sort of this key phrase that everybody wants, wants to say and be a part of. When will we see some of that capex that's been plowed into AI by some of these big names really start to show some dividends in the form of margin expansion? Do we need to see it this quarter? Will that separate sort of the wheat from the trough?
- [05:47]
Courtney Garcia
I don't know if you need to see it this quarter, but we do need to see it at some point. I mean, that is the concern is that there is so much capital expenditure at the moment, but we don't know at what point you're actually going to see them monetizing that. And I do think when you're looking at Google, who is going to be reporting next week, their, their valuation is much cheaper than some of your other. So I think some of this has been discounted because people are a little concerned about the fact that their search business is the main driver of their business and that I may start to cannibalize that. Anytime you go to Google, the first thing that comes up is that AI search, a lot of people are using that and that's going to diminish their ad revenue. And I think that is why the valuation has come down so much. And so we need to see when they're reporting earnings, is that happening and do they have a path to really utilize that going forward to Bonwin's point. So I do think the good news about them is the bar isn't extremely high for them like it is some of the other companies, but I think we need to see how they do next week.
- [06:37]
Melissa Lee
You know Mike, I said to Bono and maybe we can actually focus on the fundamentals and sort of put the macro aside for a while. That is impossible all the time. When you're thinking about the macroeconomic environments, the tariff situation still being so fluid, do you feel like it's a safer maybe trade, not investment? If you're thinking about short term and what we know right now about tariffs, to sort of look at a company in tech that offers more services rather than sort of the physical goods. Are chips at a bigger risk than some of these service providers when you want to play this game?
- [07:08]
Mike Koh
Well, you know, it's interesting, you might have thought that chips were at risk basically because you might have some restrictions, for example, and then we saw what happened with the 20s and then some of AMD's chips and reopening basically the sales of those to China. And that's basically what's helped propel us to new all time highs. You know, both Bono and Courtney and Tim all talking about Alphabet and their search business. I mean that's more than 70% of their revenues. And it's kind of interesting when you think about it looking at that one because it is trading at a significant discount to the S and P. They have so many good things about their business. They've got Waymo, which is basically a kicker in there for nothing. And we've got Tesla reporting next week and part of the big valuation premium that Tesla enjoys, if we're going to talk about fundamentals relative to the legacy automakers, is because of their self driving tech technology and Alphabet has that arguably they have the best of breed. So you know, I think the real issue, and one final thing I would quickly add about AI is that Alphabet was basically a leader in AI until the large language models suddenly just got released on the public and chat GPT and now I guess GROK are the things that everybody's paying attention to. But I think if we just keep an eye on that search. I was at a, at a presentation earlier this week, a big conference in Las Vegas. People were asked to hold their hand up how many people are still using Google for search and the majority of the hands were going up for that. So you know, if that remains true in their earnings and that's going to be good news for them.
- [08:32]
Melissa Lee
Hmm. Tim, Mike brings up of course Tesla. It's a name we talk about a lot. We're Going to hear a little bit more next week. Shares were up today. What do you think? Is there a trade there ahead of the results?
- [08:44]
Tim Seymour
I think the trade for Tesla right now tends to be more on the macro. And unfortunately, if you're an investor, where we had gotten maybe two quarters ago, really even before Trump joined and Doge Dynamics, excuse me, he joined Trump and the Doge Dynamics was that the company on fundamentals was accepted to be under pressure and that you weren't going to start to see some inflection on sales. If you were going to see it until really 3Q or 4Q of this year, then the stock got ahead of itself in terms of where the political connective, whatever we're calling the connectivity to the White House really was and what it meant. And obviously it's kind of run the course and now maybe in kind of the reverse opposite at this point. I think Tesla to me is one that is drifted out virtual of that mag 7 just despite the fact that it still is measured in the same breath. I just think Tesla is a story that now really has to prove. They have to prove the deliveries in the 2Q came in much lower than expected. Margins seem to be contracting. We know China is an issue and I think the talk about Robotaxi has been overdone. I've never, at least not in years, have I liked Tesla purely on valuation without getting lost in what some of the macro is around the story. I just think it's expensive and I think there's a lot priced into businesses we just don't have yet.
- [10:03]
Melissa Lee
Final one, what do you make of Tesla?
- [10:06]
Bono
It's hard for me to disagree with Tim Said. I mean, you're talking about getting back to the fundamentals, but frankly this stock does not trade on fundamentals in terms of the political connectivity to the White House. I do think that's really what kind of took us to those, to those previous levels in the high four hundreds and then we saw that subsequent sell off. I tend to think that there's not really any catalyst for movement here. I'd probably sell a strangle being that I'm a bit more cautious just on the name. I might buy a cheap downside put just to protect that, but it's really. I just think this thing kind of continues to trade sideways. I agree in terms of Waymo versus Tesla in terms of sfd, where you want to kind of be there and in terms of the valuation reflecting what value you're actually getting. So if I want to play it, I'd rather be in A discounted Alphabet versus a Tesla that, frankly, we have enough headline risk on the macroeconomic front. There's also extreme headline risk on the Tesla front. So it just makes it tough for me to allocate the incremental dollar there. You mentioned a trade versus an investment. I really do think you probably sell volatility and then protect your downside with. With maybe a strangle just because you just never know.
- [11:15]
Melissa Lee
Good advice, good perspective. Well, meantime, our next guest thinks tensions between President Trump and Fed Chair Jerome Powell could reach a boiling point by the next interest rate decision scheduled for later this month. Ben Emmons is founder and chief investment officers at Fed Watch Advisors. Ben, thank you for being with us. I mean, my goodness, I can't remember what day it was this week, but it was a long day and a short day all in one. We had. We thought we knew one thing, and then an hour and a half later, we knew something different. Even though the Fed is supposed to be independent, apolitical, there are also people. Jerome Powell is a person. How, how is it really possible for him and the committee to move forward and continue to do their job, seemingly unaffected by this? I mean, isn't everyone just going to be shrouding every move, decision and discussion point in sort of a curiosity point? Why did they really do this?
- [12:07]
Ben Emmons
Yeah, I think that's right. Courtney, you get now far more scrutiny on this July meeting than we would normally have, you know, just irrespective of the economic data. You know, we've got, you know, reasonable inflation data this week, and we had good employment data the other day and actually yesterday with retail sales, too. So we've got an economy that's strong, could keep this Fed on hold for the time being. But the attention to this meeting is only building up now. You saw overnight Governor Waller really coming up with a. I would call a pounding table view of, like, we can cut rates now. So it kind of adds into the mix of this. What's going to be happening here at this meeting. You know, are they really tilting towards easing while you actually have an economy that's strong? I think that tension kind of displayed itself this week in the markets when, you know, it really became apparent that they wanted to remove Powell. You saw the volatility reappear. I think this is what we could expect going into this July meeting because the VIX is low. The probability for cut is priced near zero. So you could get some tension here, I think, as all the scrutiny comes together.
- [13:06]
Courtney Garcia
Hey, Ben, it's Courtney Garcia here, the other Courtney who's on the desk. When we're looking at this, we've clearly had a lot of headlines, right. And at this point in time Trump is saying that okay, he's not going to fire Powell, but clearly there is an issue there. They are going head to head, he doesn't want him in. So at what point does it matter if he actually fires him or not? Because at this point he's kind of out the door. And what does that do to rate changes, if anything at all or anything that we should expect as investors?
- [13:30]
Ben Emmons
I think Cornelius adding to is is basically about the shadow chair. Right. Ultimately we all know that Powell will be out in about a year from now, actually less than a year. And whether he actually gets removed in between or not, it's really about this committee and then about this next candidate and how that candidate is going to interact outside of the committee. I think that's what the market will pay indeed attention to. But nonetheless it's still a committee. So as you had this example of Waller really making a strong case for a cut doesn't mean that the cut actually will happen. It's still the FOMC that makes that decision ultimately. I do think though that you know, could you get some sort of a group think here where people are all going to be on the table saying well a cut is definitely possible. I think that's the biggest signal out of this meeting is that from here what cuts will happen, how soon. And there was a little change here with Daily the other day of indicating that she's also on board for this next round of cuts. So powered away, yes or no, it's the committee drives it. But I do think they will may signal more cuts from here.
- [14:32]
Bono
Hey Ben, what's going on? It's bona win. Great to see you as always. Just quickly, I know you give a lot of great insights about the Fed and typically we focus a lot of our attention around like large publicly traded companies. But there's a large cohort in terms of the small business community that perhaps isn't feeling the same euphoria as might be reflected in the stock market. Can you speak to how rate cuts might affect the front end of the curve and those companies that are probably borrowing with short term variable rate debt and how perhaps that might be presenting a tug of war between what we're seeing from full employment versus what we're seeing from the small business community?
- [15:08]
Ben Emmons
Yeah, and I think that's a good pointer. And because you have companies that you mentioned, they're very reliant on short term funding. And so rate cuts there would potentially help, so to speak. In other words, if you do get cuts, the yield curve should normalize further, the short term rate should get lower and those companies should be able to borrow at a lower rate. Yet, you know, it may not happen really because of the strength of the economy and that that difference there of when it will happen and the rate difference for these companies I think matters. Also think for these companies their business outlook has been clouded by the tariffs. And if you look at the Atlanta Fed, they put out a business inflation outlook that's actually still quite high relative to where you know to say market based expectations are for inflation. So these companies are sitting in a bit of a pickle here. So rate cuts actually would help them a lot. People have always connected small caps and rate cuts as a positive thing. It could see a big rally. I think that would actually be the case. But if we're getting quick cuts, that's, you know, that's where the tension is currently. Right. We don't notice yet. So I think these companies have to buy that a bit.
- [16:11]
Melissa Lee
Ben Emmons, thank you so much for joining us here on a Friday going into a weekend with probably still a lot of question marks, which is when I turned to you, Tim, I think earlier this week it was Guy that said, I think, I think we're going to get some news this weekend between Trump and Powell. Do you think that's true?
- [16:27]
Tim Seymour
I don't know. I'm not sure. As we've all just discussed the dynamic around whether he stays or goes. We're certainly aware that there's a force that wants to change and be aggressive with the short end of the curve and probably can't control the long end of the curve. The weekend is maybe more focused on Japan. You have elections, you have dynamics that I think could have a big impact on where JGB yields, trade. And for those that don't follow JGB yields, I do think that Japanese interest rates can be upward pressure on US Interest rates if in fact you start to see some of the minority parties gain more ground. And they've been certainly negative on current, call it BOJ policy, but also they've been pushing for tax cuts and slightly more aggressive dynamics, but similar to some of the dynamics that this administration is pushing for. By the way, I think this is these are consistent political undertones around the world. So a lot of this could still be leading to the longer end of the curve. If you got a firing over the weekend of Powell, the long end of the curve would React Whether it would be quickly, I don't know, over time, I feel confident it would. And I do think that this weekend around Japan is something to watch for investors.
- [17:37]
Melissa Lee
Ben Emmons would agree with you, Tim. He didn't quite get to that point. But to your point, he also does agree that we could see those JGBs hit new highs if those smaller minority parties, when he calls it the Japanese Liz Truss moment. But we're going to move on here to the housing trade. I mean overall housing starts rising 4.6% in June from the prior month. But construction of single family homes actually falling to 11 month lows. And that data point sending homebuilders lower with the ITB home construction ETF falling by more than a half a percent and closing out its worst week since May. Mike, obviously we spend so much time focusing on this area of the economy because it does tell us so much and for many Americans this is sort of their largest financial asset. What do you make of the data that we've seen and what that portends for the shares of associated with them going forward?
- [18:22]
Mike Koh
Well, I mean these stocks were already pretty cheap going into it, so there was a lot of bad news priced in. I mean of course we pay a lot of attention to it for two reasons is a quality of life issue and it's a big segment of the U.S. economy. And really, you know, what we're dealing with on the single family housing front is just affordability. You know, median, median incomes have not risen essentially with median home prices. They were propelled upwards by low rates. And then when rates reverse, it just basically hurt the affordability significantly. And that's, and that's creating a lot of pressure regardless of the incentives. It seems that a lot of the homebuilders at the lower end have obviously tried to introduce at the higher end. So we're looking at the Toll Brothers and things like that. Maybe the affordability issue isn't quite as critical. But you know, 420, $430,000 median home price is the highest that we've seen in this country frankly with rates where they are right now. And that's going to continue to be a headwind until we either see home prices fall or which has other implications or we see rates fall.
- [19:20]
Melissa Lee
Yeah, I mean Courtney, obviously there's a lot of strain on the market when it comes to supply as well. But when you're looking at the stocks themselves, do you feel like these are possible trades or not right here?
- [19:30]
Courtney Garcia
I do and I do think this is going to be a longer term Trade. I think short term there is a lot of pressure here because even if the Fed does cut rates, and everybody talked a little bit about this earlier, they're affecting the short end of the curve, not the long end of the curve. The problem is the majority of mortgages are less than, than 4% right now. So when you see the mortgage rates that are in between 6 and 7%, they've still got to come down a long way before any of your existing homeowners start to sell. You start to see more in the market that is to be beneficial for your homebuilders who can start to bridge that gap. But mortgage rates are still very high and I don't see them coming down significantly enough to bridge that gap. But longer term there's a real supply constraint. I mean it depends who you ask. Anywhere from 4 to 7 million. 7 million. Shortage of houses out there. And when you got the additional housing starts, that looks like a headline. Good news. But it's all apartments, it's not individual homes, which is what a lot of people are looking for. So longer term, I think there's a trade to be had there. I do think there's still some short.
- [20:20]
Melissa Lee
Term pressure, however, on when do you think there's an options trade in this one?
- [20:24]
Bono
Oh, there's always an options trade because whether, because whether you have movement or not, you're able to use options. So I think, I think Mike would agree.
- [20:32]
Melissa Lee
Yes, of course.
- [20:33]
Bono
Definitely champion the old options action crew. Listen, I think I would probably be looking to either sell that previous bottom. Sorry, sell puts on that previous bottom of itb or sell put spreads in some of the like the dhi, the Toll Brothers and perhaps kbh. I'm with Courtney. I think long term you probably have some upside. I don't think you're going to get a short term catalyst and I think it's an opportunity for you to bring in some premium.
- [20:58]
Melissa Lee
All right, well coming up, all the details behind the earnings moves in Amex, Charles Schwab and Netflix. Plus shares of Surrepta Therapeutics Plunging. In today's session, the latest next on a controversial drug and how the FDA is responding. Don't go anywhere. Fast money is back in two.
- [21:19]
Courtney Reagan
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- [23:57]
Melissa Lee
We'Ve got a news alert on the latest name to join the S and P fintech firm Block will replace Hess after that company's acquisition by Chevron closes. You can see shares here after hours moving up higher, almost 11 and a half percent. Robinhood again overlooked those shares are down slightly. Well, two financial services stocks moving in opposite directions today sticking in somewhat of the same vein. American Express dropping more than 2% despite a beat on the top and bottom lines. The company saying total spending on its cards jumped 7% but travel spending was weaker than transactions for goods and services. Meanwhile, Charles schwab of nearly 3% hitting an intraday high dating back to its 1989 hey, hey, Taylor Swift IPO. The company also beat estimates as a trading surge around the tariff volatility did help boost profits. Interesting here. Bono and I, I find the action Amex interesting because when I first looked at this, I thought, isn't this great for consumers? The spending up 7% but, but the travel part of it was interesting. More spending on goods and services. What do you make of all of that? What it says maybe more broadly about the consumer, the state of the economy.
- [25:01]
Bono
Well, I think in amex's case they clearly are appealing to a more healed higher income. I want to make sure I'm choosy with my words here, but yeah, well healed, well heeled consumer. Aside from the travel and goods, and that's clearly part of their core business. Their credit loss provision was actually slightly higher. And I know that they didn't make the same provisions that some of the banks and others made in previous quarters, but that did kind of jump out to me because I'm trying to understand, really like reading the tea leaves. Is there something that we're overlooking even in that upper cohort, why are they now deciding to make those provisions? This is previous quarters where we thought perhaps there may be starting to show some, some cracks in the consumer. So for me, that stuck out a little bit in the report. But I still think if you're going to be in the space and you want the credit card exposure, you want the consumer exposure, this is squarely where.
- [25:56]
Courtney Reagan
You want to be.
- [25:57]
Melissa Lee
Well, Meanwhile, Netflix dropping 5% today despite better than expected future earnings and upping its fall full year guidance. And it was the stock's worst day since April. It's now down nearly 10% from its record high on June 30th. Michael, I feel as if you did an options action trade on this one for us earlier in the week. What do you make of the action?
- [26:14]
Mike Koh
Yeah, I mean, I did and actually we also put an article on the CNBC website and really my issue here with Netflix was simply that the stock was a bit extended. It's not because the fundamental story isn't robust. Like I have said many times, I think in the streaming wars, there's Netflix and then there's everybody else and they're clearly in the lead. They have everything going for them. It was just a little bit of a problem on valuation. It was a little bit of a problem technically as well. I mean, I think the stock was about as high above the 150 day moving average as we've seen it in a long time. I still like it here. It actually in some ways hasn't even fallen back to that long term moving average. So I'm not super excited about it in the near term. But fundamentally this stock is still in very good shape I think.
- [26:59]
Melissa Lee
Tim, what do you make of that Netflix?
- [27:02]
Tim Seymour
Well, yeah, in fact on the other side it traded through the 50 day to the downside, which it hadn't done that type of a move through the 50 to the downside since March. And it tells you just where this is not. You know, it's not a one day move, it's a couple day move. And in fact, as the chart just showed, probably 10% off the all time 52 week high. I don't think you're running too far away from Netflix. In fact, there are plenty of people that would love to own the stock and probably want to own it around here. There was nothing in what they reported. In fact, they continue to show that their content is, is really top of the top of the food chain. I do think at 50 times forward it takes a ton and that's really where we were on the stock. I don't think you need to buy it. I'd be interesting to see where it settles in here, but it's not far from here.
- [27:45]
Melissa Lee
Good stuff. Well, coming up, the latest on Sarepta Therapeutics. The stock plunging on reports of another death linked to its gene therapy drug. How the FDA is getting involved. That's up next. You're watching Fast Money live from the NASDAQ markets in Times Square. We're back right after this.
- [28:07]
Courtney Reagan
Don't just ride the index, seek to outperform it with FELC. The fidelity enhanced large cap core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other etf. Discover FELC the Fidelity Enhanced Large Cap Core ETF Part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus and offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. Fidelity Brokerage Services LLC member NYSE SIPC on WhatsApp, no one can see or hear your personal messages. Whether it's a voice call message or sending a password to WhatsApp, it's all just this. So whether you're sharing the streaming password in the family chat or trading those late night voice messages that could basically become a podcast, your personal messages stay between you, your friends and your family. No one else, not even us. WhatsApp message privately.
- [29:42]
Melissa Lee
Welcome back to Fast Money. Shares of Sarepta therapeutics sinking nearly 36% today and hitting nine year lows. FDA reportedly now taking action after news of a third patient death linked to one of the company's gene therapies. Angelica Peebles has the details. Hi Angelica. What do we know now?
- [29:57]
Courtney Reagan
Hey Courtney. Well, I don't have to tell you what a wild week that it's been for Sarepta. And today it got even crazier after we learned that the FDA will ask the company to stop shipments of a Levitis. This is just two days after management made it seem like there wasn't any real risk that that would happen.
- [30:13]
Melissa Lee
We also learned that there was another.
- [30:14]
Courtney Reagan
Patient who died in a phase one trial of a different surreptive gene therapy and that management chose not to disclose that when announcing the big restructuring just.
- [30:23]
Melissa Lee
A couple days ago.
- [30:24]
Courtney Reagan
And the company is saying that they decided that that wasn't material since it didn't affect any of its marketed therapies. Well, now there's real risk for its biggest drug and that's a Levitis, and.
- [30:33]
Melissa Lee
It already makes up over half of.
- [30:35]
Courtney Reagan
Its sales and it's the main driver of the company. Lyric analysts just out with a scathing note saying that they can no longer.
- [30:42]
Melissa Lee
Recommend the stock under any circumstances. They started off this morning writing that.
- [30:46]
Courtney Reagan
There can be a distinction between a good between a company and a good stock. And I also just got off the phone with Peter Marks. He was also, he used to be the head of the division that approved.
- [30:56]
Melissa Lee
Levitis at the fda and he said.
- [30:58]
Courtney Reagan
That it wouldn't be unreasonable to ask the company to pause further dosing of the gene therapy until you do a review of what's going on. So really all the cards are now.
- [31:08]
Melissa Lee
Stacked against the Repto guys. Angelica, thank you for bringing us up to date. As you mentioned, there's been a lot going on this week. Bono and I mean, I think Angelica brings up some pretty pertinent points. It seems like really the trust issue might Be with management sort of the way they've made their decisions about what to disclose and not. And when.
- [31:26]
Bono
Yeah, I mean, I think this is the perfect storm of when financial distress meets lack of management oversight. Right. Underscoring everything when you're making an investment is credibility and transparency. And they squarely have dropped the ball on both of those. I still don't quite understand how a death in a phase one trial is non material information. I think clearly everyone would know that the investment community would react probably negatively to such news. And now we're seeing the FDA kind of step in. And I think this is the worst case case scenario, quite frankly. And I don't think there's an option trade that I have to suggest for you getting any type of long exposure to the stock.
- [32:05]
Melissa Lee
Mike, what's your take on this one?
- [32:07]
Mike Koh
Well, you know, the options traders are actually looking for exposure to the downside. This thing traded 20 times its average daily put volume, more than 84,000 contracts today. That actually exceeds the entire open interest on the put side, which was about 65,000 contracts coming into today's news, which was obviously viewed very negatively. And the most active contracts were the 10 and 12 and a half strikes. So the August 12 and a half puts, which is obviously still a big discount to where the stock is trading right now, and even the ten strike puts. So, you know, that's down another four and a half bucks for a fourteen and a half dollar stock. And I would just add one other thing for people to think about. You know, you're dealing with a company that has about $800 million in debt and only $1.3 billion market cap remaining. So the stock is going to be more volatile just as a function of balance sheet leverage. And we're seeing more and more of that.
- [32:54]
Melissa Lee
Well, that's a really critical point on the fundamental side as well, Courtney. I mean, my gosh, look at the, look at the, the week that it's had and the news today really doesn't leave you a lot of positive feeling.
- [33:04]
Courtney Garcia
Yeah, and I think this is, this is just the headlines we're seeing today. And I think what the follow through is, is going to be the question. So I kind of want to echo everyone's point here. I don't think this is something you want to be in by any means. And I think right now the FDA has come out and asked them to stop shipments, but at what point do they actually shut this down if that's going to happen? I mean, there can be a additionally further downside here. The fact they're not disclosed that information to Bonham's point is what trust do investor has anyway even if those shipments aren't are allowed to go through going forward. So I think for a lot of reasons you want to stay away here.
- [33:31]
Melissa Lee
Well, coming up, the next move in crypto as President Trump signs the landmark stablecoin bill. What will it do for bitcoin and the other players in the space? Don't go anywhere. There is more fast money into.
- [33:45]
Mike Koh
Mr.
- [33:45]
Courtney Reagan
Moment of Fast. Catch us anytime on the go follow the Fast Money podcast.
- [33:50]
Bono
We're back right after this.
- [34:00]
Melissa Lee
Welcome back to FAST MONEY Stocks. Little change to close out the week. The dow falling about 150 points. The S and P down less than a point after hitting an intraday high during the session. And the Nasdaq slightly higher enough to set a record close. Though shares of elements continue continued to move lower after earnings Yesterday, down another 8% today, bringing those losses to 20% for the week, its worst week since the start of the pandemic. And President Trump signing the Stablecoin Regulating Genius act into law today, calling it, quote, a massive validation of or for the industry. It's the first of three crypto bills to be signed, the Clarity act, which will define market structure and an anti central bank digital currency bills. So still to go to the Senate for a vote, xrp, Ether and Solana all rising on the news and surging this week. XRP hitting a new intraday high, ether now at 40% just in July. Bitcoin the only major coin negative for the session and for the week. Meantime, the Peter Thiel backed crypto firm Bullish Exchange formally filing for an IPO just minutes ago. So for everything, crypto. Evgeny Gaivoy joins us. He is the CEO and founder of the crypto trading firm Wintermute. Evgeny, thank you for joining us here today. I guess just first of all, so having the signing today by the president, does this pave the way in a real sort of fundamental way for stablecoins and cryptocurrency currency writ large to have a more commonplace use case every day?
- [35:28]
Evgeny Gaivoy
No, absolutely. Lack of lack of clear regulation has been such a boon on the industry, honestly. And this in particular, the Clarity act has been, yeah, very patiently waited by a lot of people in the industry. And yeah, we still have Senate to pass, but we have, I think a lot of people are just very optimistic of how much progress on how much business for us specifically it will bring.
- [35:55]
Melissa Lee
What do you think this does for institutional money that may want to look into getting into this area at least even maybe more so than they were before. Is it sort of give them a and it's okay, this is safe. There's some regulation behind you now. I mean, is that sort of a check mark that they felt they needed?
- [36:14]
Evgeny Gaivoy
Basically one of, one of the key things that clarity brings is a lot of more transparency around how the stockings operate about busy disclosures that various sectors in the space in the space bring when trading those tokens, when sending those tokens to somebody else. So this clarity has been a hallmark of basically traditional finance and now we finally have something like this ready for crypto as well.
- [36:40]
Tim Seymour
Evgeny, it's Tim. Thanks for joining us. Fascinating times. And so this week shows that stablecoins are no longer on the fringe and in fact major bank CEOs are very involved. So. So that's great. And I agree that more regulation equals higher valuations for folks at home who may own some Ethereum, they may own some bitcoin, but they have no idea what the next move here is. How are you suggesting investors can actually either do additional work, look at the cryptocurrency. In other words, there's a lot of other places and this week was a week where the crypto world was on fire and it wasn't really bitcoin and it wasn't really Ethereum. So just your thoughts here?
- [37:22]
Evgeny Gaivoy
Yeah, I would say one really interesting place to look at and I think it's going to be a pretty major theme for this year as a Treasury companies. So I mean we all know micro. Well former microstrategy, now just strategies that's basically made bitcoin a lot more popular. But basically there are basically dozens if not hundreds of the strategy companies that will be listed effectively by the end of the year. And I think it will drive price of a lot of long tail assets, specifically not just Ethereum and Bitcoin, but like a lot of long tail.
- [37:52]
Bono
Watts, Yevgeny Bono in here. Quick question. I'm curious about some of the divergence we're seeing in terms of institutional adoption and allocation, mainly Bitcoin and Ethereum versus some of the other allocations that we're seeing from retail investors, meme coins, higher beta coins, etc. Can you kind of speak to why that might be the case? And if traditionally you would think that if large institutions are flowing into something that's likely where the quote unquote smart money is, can you kind of speak to that divergence between the two?
- [38:25]
Evgeny Gaivoy
Yes, it's not very new for crypto industry in general. It's, it traditionally was the case that institutions are looking at something relatively safe, however safe, however crypto can be perceived as safe in general. So Bitcoin and Ethereum are the place to go effectively for more sophisticated, more, more, less like risk averse investors. But on the retail side, people are always looking for a beta. They're always looking for a beta to Syrian for a better bitcoin, but serum better, Solana even. They're always looking for something that will move much faster and a lot more, especially in crypto where you can get a lot of leverage on top Evgeny.
- [39:04]
Melissa Lee
Thank you so much for joining us. Working through all the levers that are going on in the space today. Mike, what's your take on what having the Genius act signed by President Trump today means for the industry? And do you think that this move that we've seen in a theorem is based on the regulation, institutional flows, retail flows, technicals, what is it and is there more to come?
- [39:25]
Mike Koh
Well, I think there is a lot more to come. I mean, the Genius act and the clarity act to anything that basically gives, you know, traditional legacy financial institutions some confidence that they aren't playing with fire is going to be a net positive for the space or overall. I don't think this really steals from the bitcoin story necessarily. I mean, I definitely understand that people are looking for beta, they're looking for volatility, they're looking for, for leverage. And when you start to see some confidence that some of these other coins might actually sort of become more mainstream, that does offer that. And so I do think we saw some money flows from bitcoin as a result of that. But I still think that the, the story there remains, you know, fundamentally strong. So bitcoin being the biggest player, I'm still bullish there as well.
- [40:12]
Melissa Lee
Courtney, what do you make of this base? And as we sort of get more regulation and more insight from Washington, do you think this opens up the door for maybe even more retail investors to get a piece of this?
- [40:22]
Courtney Garcia
Yeah, and I think the more of these headlines you see, I think it is the idea that it is going to create this, this it's okay to invest in because it's a mainstream asset class as opposed to something that's so speculative and new. Again, I don't know if we're there yet. I think it is still more speculative than you're seeing, but this is going to kind of bring it along there. And I think what's interesting about this legislation, it's specifically going towards stable coins which are going to be pegged by the US Dollar and backed, you know, oftentimes backed by Treasuries. So I wonder if you see that demand there, what is that going to mean to those other asset classes, which I think is a question you need to look at down the line.
- [40:52]
Melissa Lee
Absolutely. I was thinking about that earlier this morning and the threads that connect all of that. I'm happy that you brought that one up. Well, coming up, we still have more to come on Fast Forward money. With earnings season in full swing, we're going to bite into the restaurant names they're reporting next week. The read on what that could give us more talking about the consumer when Fast MONEY returns. We're back into welcome back to Fast MONEY Restaurants. Among the names dishing out earnings next week. And after a quarter filled with tariffs, consumer uncertainty and price hikes, where will the food stocks fall? CNBC's Kate Rogers has more on what to expect. Hi, Kate.
- [41:38]
I
Hey, Courtney. So the backdrop is interesting here. Consumers showing some resistance in the sector as restaurant costs continue to outpace grocery costs. And the best performers year to date are Domino's, Papa John's, Wingstop, all pandemic darlings along with Dutch Bros. That stocks up over 20%. The names taking the biggest hit so far, Sweetgreen, Kava and Jack in the Box. So the key things to watch across this quarter will be the performance of all consumer cohorts, but the low income consumer in particular, something that McDonald's, the broader fast food industry as well, has been focused on and struggling with in some cases, pricing power. Names like Chipotle and Starbucks have long had pricing power. But that dynamic, of course, has shifted in recent quarters as consumers are kind of bristling against higher prices. Chipotle Holtley CEO Scott Boatwright said last quarter saving money because of concerns around the economy was the overwhelming reason that consumers were reducing the frequency of restaurant visits. And interestingly, the casual dining names, Courtney, have been performing well with investors because they may be seen as better positioned from a price perspective for diners. You're getting more experience for your dollar in this environment, which is really key. So we'll see what all of these companies have to say next week. And beyond. Court back over to you.
- [42:49]
Melissa Lee
Yeah, Kate, and I know a lot of these restaurants also have sort of changing CEO suites with new people in and people leaving. I mean, how many of those may be giving us some new strategies at least in the short term, coming up next week?
- [43:02]
I
Oh, totally. I mean, it's a great question. We talked about this last week, but There have been seven, I believe, executive changes over the last year and a half. It's been kind of like a reshuffling and a revolving door of all of these different executives kind of moving around, some taking on very big challenges. Like Brian Nicholas at Starbucks with his Back to Starbucks plan. Looking forward to hearing more about that in the weeks to come. Scott Boatwright, of course, we're going to talk to him next week after Chipotle reports earnings. He stepped into the CEO role at that company and many, many more. So a lot of them are really focused on the consumer, the experience, the menu, whether it's adding new items, slimming it down, etc. And whatever it takes to bring them in and keep them coming in. So a lot more to come.
- [43:43]
Melissa Lee
Interesting stuff. Thank you very much, Kate. Happy Friday, Tim. You know, I love a good latte from Starbucks, but my gosh, when Kate's talking about pricing power, I mean, am I really going to pay like $12 one day? Like there's got to be a cap at that, right? I mean, pricing power, how much do you have when you're already charging $8 and change for one of those delicious drinks?
- [44:01]
Tim Seymour
Yeah, look good for you and your latte. I'm not afraid of Starbucks either. And I'm not afraid and I will probably give up my expensive coffee last. But I think we frame this story perfectly, which is that I think eventually we always thought that there was going to be pricing issues. It's just taken longer to play out. And if it was a year and a half ago, all we were talking about was wage inflation. And remember it was two years ago where McDonald's in California had to counter the minimum wage dynamics. And so where I think restaurants are now caught in the middle is they don't have pricing power and they have a higher cost base. The question is really where is the consumer? In some cases it actually feels like the lower income consumer, but more importantly the ways to the manifestations in the market. So how you play it, whether it's Dollar tree, whether it's McDonald's, some of those, I think some of those folks have actually done very well by investing in the low income consumer. That's actually been more resilient. I think where we're more worried about the high valuation stories, where you really do rely upon a middle and upper middle class. And I think Chipotle is struggled. It struggled for 12 months. It's actually struggled really for 15 months since Brian Nichols left the firm.
- [45:12]
Melissa Lee
Interesting stuff. Well, coming up, we've got a lot more Fast Money with a China tech breaking out more on the mainland moves and then whether Alibaba, that's your clue there. Can continue its recent bounce more fast into. Welcome back to Fast Money. A winning week for Chinese tech firms. The K Web Internet ETF up nearly 7% while Alibaba gained more than 12%. Its best week since February. Tim, you flagged this name as a potential breakout. Congratulations.
- [45:48]
Tim Seymour
Well, you know the blind squirrel, right? But it's a name I've been long and I've traded and I do play from the long side. It certainly was at one point in my acronym last year and I believe in this story. I love the charts on it. It's held essentially this uptrend from January, it's bounced on the 200 the couple times it's needed to. But mostly the fundamentals make a lot of sense to me and people forget. All we do is talk about hyperscalers here. This is a hyperscaler. This is one of the biggest tech companies in the world. Ali cloud continues to grow and the enterprise spend there is enormous. We think it's just an E commerce play. So I like the story on fundamentals, on valuation and I like the chart.
- [46:27]
Melissa Lee
Courtney, this was one of the names in your acronym.
- [46:29]
Courtney Garcia
Yep, exactly. I think the optimism there, especially earlier in the year was that the Chinese consumer may actually start to come back and I do think that is starting to happen and will benefit their E commerce business. What's happening right now all has to do with their cloud infrastructure which they're really one of the leaders of in China. Now as you're seeing, video chips may be able to get exported back into China that's going to benefit them as they're getting these stronger chips. So I absolutely think there's something they want to be invested in here and especially for the long run.
- [46:52]
Melissa Lee
Mike, what's your point of view on Alibaba or the Chinese Internet stocks in general?
- [46:57]
Mike Koh
Yeah, I'm with Courtney and Tim on this thing. I mean this is first of all, it's about 22% cash. Alibaba, if you strip the cash out, this thing is probably trading around 9 times next 12 months estimated adjusted EPS. So it's. That's pretty cheap. It's a, that's a good place to be. I like the story and I like the chart.
- [47:16]
Bono
I like it for slightly different reasons. I just think we've already heard about some of the money moving out of the US to international funds and for a dearth of international investors investing in the US and you think about Germany, you think about some of the Europe trade that might be a bit crowded now, I think. I think China very much has been under pressure the last several years and if you're looking for outperformance in beta and you don't want to trade meme stocks or coins, perhaps this is the way for you to get it.
- [47:39]
Melissa Lee
I like that perspective. Coming up next, it's already time for your final trades.
- [47:56]
Ben Emmons
Foreign.
- [47:58]
Melissa Lee
The final trade. Let's go around the horn. Mike, you get to start us off.
- [48:02]
Mike Koh
Yeah. I think you can still continue to play baba to the upside use call spread risk reversals.
- [48:06]
Melissa Lee
All right, Tim.
- [48:09]
Tim Seymour
Courtney, first of all, thank you for all your help this week. We had a lot of Courtney this week. It was great. Google, I think next week. Again, the setup is easy. I think the tailwind for cloud and what's going on broadly in the sector. YouTube up 13%. I like it.
- [48:22]
Bono
Von Win, I think you've heard from both SLB and Halliburton around some of the positive dynamics around production. I think although they've lagged this year, you still have some some trade upside.
- [48:32]
Courtney Garcia
Oh, and Courtney, American Express, we saw those numbers today. They still have a really strong consumer is holding up despite tariffs. I think you want to stay here.
- [48:41]
Melissa Lee
Fascinating stuff. A big week ahead next week. Thank you for watching. Fast Money Mad Money starts right now.
- [48:54]
Courtney Reagan
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 trading@schwab is now 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.
- [49:50]
Ben Emmons
Get 24.
- [49:51]
Courtney Reagan
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.