← CNBC's "Fast Money"
CNBC's "Fast Money"
Can the Market Rally Continue and How Bots Are Winning the Prediction Markets 5/1/26
00:43:15
The S&P and Nasdaq closed at records after Apple’s earnings report last night. And with more than 60% of the S&P reporting results, what have we learned and can the rally continue? Plus a new study shows just where the wins are coming in the prediction markets, and how algorithms are outbetting traders. Fast Money Disclaimer
Loading summary
Transcript142 lines
- [00:00]
Edward Jones Financial Advisor (Narrator)
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. EDWARD Jones, Member, SIPC Is your business achieving its current strategic goals? Are operations as tight as they should be? Are finances in a realistic place for expansion? These are questions investors ask. That's why EY Parthenon brings an investor mindset to help executives reinvent business models for long term growth, reset strategic goals, optimize operations and get finances in order. Let us help you reimagine your enterprise eye solutions that work in practice, not just on paper.
- [01:02]
Melissa Lee
Live from the NASDAQ markets at the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. Rallying to records, the NASDAQ and S and P both hitting new highs again today. But with big tech earnings in the books, how much more can the rally run? We'll debate that. Plus the yen surges against the dollar. Tanger CEO gives his read on the consumer. What to expect from Berkshire's first annual meeting without Warren Buffett and the Fox versus the Bros. A new study finds that real world traders are losing money on their prediction market bets. Yep, and it's the algorithms turning a profit. We'll talk to the man behind the report later this hour. I'm Willisley, come to you live in studio. Be at the nasdaq. On the desk tonight, Karen Feiderman, Tim Seymour, Mike Cohen, Bono and Ice. And we start off with a new set of records. To kick off May trading, the NASDAQ jumping nearly a helped by a 3/plus percent gain in Apple post earnings. The S&P added 3.10 of a percent while the Russell gained half a percent. The Dow though shed about 150 points, dragged down by losses in Amgen and McDonald's. It's about 2% from a record of its own. The moves come after the busiest week of earnings this quarter. Five of the MAG7 names reporting the last few days with Apple and Alphabet among the standouts. In all, almost two thirds of S&P 500 companies have reported so far with earnings on average coming in more than 11% above expectations. That is the biggest surprise rate in nearly five years. And while mega cap tech stocks have seen profit growth near of 60% year on year. Even excluding those names, EPS is still up almost 20%. So what did we learn from earnings this week? Is the foundation in place for further gains? And I think as much as you wanted to doubt the rally, as much as you said higher oil prices will certainly dense sentiment whether it be by the consumer or corporate spending, it didn't Karen. And we didn't really see much of that as evidenced in any of the guidance either.
- [02:51]
Karen Feiderman
No, I mean it was a really, really powerful for the most part quarter especially for the Mag 7. I know Tim, you've been very pro Mag 7, pro semis and I'm a bro too.
- [03:00]
Tim Seymour
I'm supposed to be wrong but anyway
- [03:02]
Karen Feiderman
but it was right. I mean so the companies that seem to be fairly isolated from oil, from the effects of Middle east, from supply chain issues, things like that, they did extraordinarily well. The trade is very much alive and accelerating and so there was a lot to like for earnings we haven't seen. We started off banks, which seems like a long time ago now, you can hardly even remember but there was just this momentum to the market that seemed to, I mean I'm looking at the Vix Sub 17 now. We're still theoretically maybe in a war, maybe not. I don't know. It's hard to know. And yet nobody seems to care about that and nobody seems to care about oil. Energy's trading up almost. If oil's down or up, it just keeps trading up.
- [03:47]
Tim Seymour
Yeah, I mean if you think of what crude did this week and we, we Wednesday afternoon we said a fresh high for this, for this war and for this cycle and equities not paying any attention. All we do is hear that the real kind of feed through from inflation is still yet to come. We had a Fed that if anything went a little hawkish this week. No one seems to care. And I realize the politics around the Fed kind of change that. What's exciting here is that the market multiple might be coming down. And I mean that as we hear what's going on with equities, what we're getting from these, these beats and 60% through 80% are beating a few more beating on the revenue side we all can do this math when you str out a couple of companies, some memory names specifically Micron and Nvidia and and really Google, you have a market that is performing but not quite in the way we had. I love the fact that the triple cues, the NASDAQ 100 made a fresh new relative high against the S and P this week because again if you want markets to go higher, we have the most important companies and the largest companies in the world. We've only gotten. I don't know if Apple's announcement was enough to get that thing really moving. There's, there's less growth and less catalyst drivers in the short term for adult, for, for Apple. But I thought it was a really important week that equities did what they did in the face of oil and
- [05:04]
Melissa Lee
we didn't see all of the mag seven that reported. We didn't see all of those names trade higher after earnings. Mike and yet we still managed to set record high after record high closing highs here.
- [05:14]
Mike Cohen
Yeah, I mean it's interesting Tim sort of pointed out that the multiple is coming down by my work. I think the forward looking multiple on the S and P is probably down two turns or so since the tail end of the fourth quarter last year. And you know, I mean really the reason for this is that the bulk of earnings for the S and P are coming from the tech sector so. And they're crushing it. And I think the biggest concerns that you had, you know, Karen referenced the vix. One of the reasons that the VIX is going to come in after a week like this is that 47% of the S and P and that's what the VIX is based on reported earnings by market cap. So once that uncertainty is kind of behind everybody, you would kind of expect to see implied volatility as a price of options which is what the VIX is reflecting. Come in a bit and it seems like I'm not going to call it complacent. I think it's comforted by the numbers that we've seen.
- [06:04]
Melissa Lee
Sounds like an all clear Bono in.
- [06:09]
Bono
I think it's a mostly clear. I mean it was a very important week. We needed this. I mean there was a lot, I mean but let's, let's think back a month. We were seeing a very different tune. Listen, at the end of the day what you got were very clear results and we can sit and speculate about what, what the macro environment may have for us in store going forward but I think this was, you know, a calming, reassuring set of data. With that said, I do think that we are in very much a push pull with the micro versus the macro in the current situation. And so when we're looking at forward or sorry in terms of forward returns, I think that's where the concern, if there is one, starts to creep its head, you know. Yes, we are compressing the multiple which I think is healthy. I think that's what you ultimately needed given where we were. But I do wonder if the next leg higher, I mean I, I don't think I will expect sequential 11% beats quarter after quarter, year after year. So if and when that normalizes the the path higher is through multiple expansion. And I don't think the macro environment is setting up to support that currently now with the Middle east conflict that could turn on a dime. And so that's essentially a 50, 50 coin flip. But I don't want to be remiss in just reminding viewers that that is the looming risk not throwing any, you know, shade or detracting at all from what the earnings beats were. They were tremendous and they need to be noted and I think the market definitely welcomed that. But as you look forward and position your portfolio for what is to come, I do think you have to have an eye on the macro particularly once we get through earnings season to point
- [07:51]
Melissa Lee
in terms of the macro. You know we talk to a lot of experts on this show on across the and it seems like almost everybody you have on who's an expert in oil or oil equities, they say it will be higher for longer when it comes to oil prices. Even if the conflict ended today, whether it be the infrastructure, the rebuild in reserves around the world that have been drawn down during the conflict or the starting of new reserves in places that don't have reserves because they now want to have reserves.
- [08:18]
Tim Seymour
Right.
- [08:18]
Melissa Lee
And so are we underestimating at these record high levels that longer term impact,
- [08:24]
Bono
I think or is it in here?
- [08:25]
Tim Seymour
Well, I think it's hard to know. And we also seem to at times be very happy stripping out food and energy prices certainly in our, in our inflation readings. I think a lot of companies will find a way to try to pass on energy costs and whether the consumer is willing to do that, I don't know. I'm sure energy prices are going to be higher for longer. We had great numbers and we'll get to Exxon and Chevron and all that. I do think we had manufacturing expand into a fourth month there a little less than expected. But the input prices and the prices paid every regional Fed survey. So I continue to think this also means that if you want to own materials, if you want to own resource stocks, if you want to own places to actually play some of some of the physical infrastructure build out, those are great trades here.
- [09:09]
Karen Feiderman
I also think that the markets energy has been sort of dismissed and forgotten for a while and was really not relevant and now I think that it's sort of seen as, all right, this is sort of something I need to have in my portfolio. So in addition, what's happening with the demand for actual oil and related products, I think is the demand for equities related to the space.
- [09:31]
Melissa Lee
Mike, what's your take on all this?
- [09:34]
Mike Cohen
Well, you were just referencing what we have to make up. There's a shock absorber that's built into the logistics supply chain for oil that has largely been depleted at this point. So people think about that cushion as being things like the Strategic Petroleum Reserve that we maintain in the United States, which was depleted and probably needed some refilling already, probably could stand about 400 million barrels there. But if you just think about the disruption and what has gotten sucked out of what was in tankers, what was in storage in various locales around the world, you're probably looking on the high side of 600 million barrels of crude that is going to need to be, you know, brought in before you get back to where you were. That's a lot. And I think that is supportive of the energy companies for a while.
- [10:17]
Melissa Lee
All right, for a closer look at how markets could move in May and beyond, let's bring in Robinhood Chief Investment Officer Stephanie Gill. Stephanie, great to see you.
- [10:25]
Stephanie Gill
Thanks for having me.
- [10:25]
Melissa Lee
We were just talking about maybe it's an all clear, maybe it's a partially clear for the markets, given how many earnings have come in this week and how well they have come in. You're more neutral here at this point. Why?
- [10:35]
Stephanie Gill
I am now just because I think we've seen the best of the best. I do agree that earnings expectations and the growth that we've seen has probably made valuations come down at least if you look out into 2027, from 21 times to maybe 18 times. But I am worried about the commodity aspect of it that everyone just seems to be ignoring. Maybe the market is telling you that it's fine to ignore it. It is hard to fight this tape. But I. We in our portfolios and Robinhood strategies, we have a decent allocation of resources because we just, we think it's kind of a hedge against that. But you also need to be investing in AI, and that's not going away.
- [11:15]
Tim Seymour
Great having you, Stephanie. And I guess that the asset allocation question, I think, has never been more relevant. What we've seen is this real grinding and rotation that's been going on all year. Does that mean it's time for health care and. And care mentioned the energy names that people haven't been Paying attention to. So they're paying attention to them, but they're still only four and a half percent of the index. Do you believe they should be more. Are you overweight and. And laggards like health care. XLV has been kind of. Kind of a dog.
- [11:39]
Stephanie Gill
Yeah, I mean, actually, so XLE is done really well this year.
- [11:42]
Tim Seymour
It just has taken XLV as in Victor. But yes, XLE is an energy.
- [11:46]
Stephanie Gill
Yeah, yeah, we had energy and we took some off in kind of the peak of the conflict just to take some profits. I think a lot of had. Had been put in expectations, but there's going to be continued to be a demand for it. So we still have an allocation. We've just kind of rotated it a bit and moved it a little bit toward natural gas in the short term because it's needed all over the world and our exports are going up. When it comes to other. Sorry, what was the.
- [12:11]
Tim Seymour
Well, health care or other places that could be more defensive if you think that the growth of your stuff has happened.
- [12:16]
Stephanie Gill
We have an allocation to health care. And it's been disappointing, to be honest. Until I was worried about Lilly because expectations were so high, but they beat them by a lot. And so we do have allocations and things. I think peptides, in a way are kind of like the other AI trade that we. That has maybe gotten a little less potent, you know, and less focus. And when I think about like the picks and shovels of AI and where we've been putting money there, I've started to think like, what about the picks and shovels of peptides and health care? Because the technology is going to help that as well.
- [12:47]
Melissa Lee
So what are some of the. What are some of those names?
- [12:50]
Stephanie Gill
Well, I've been doing some work. I haven't actually. I mean, I look at hims, but they are. It is quite volatile and kind of sometimes never know what that business is.
- [12:59]
Melissa Lee
And they're more like the platform through which they're being sold as opposed to pick some shovels.
- [13:02]
Karen Feiderman
True.
- [13:02]
Stephanie Gill
But they actually bought a factory so that's, you know, to make some of the compounds. But then we've had this regulation back and forth on the compounds. So it was like, who can make the pens for the packaging and things like that? I've been. There's some smaller companies that do that.
- [13:15]
Karen Feiderman
So I'm sort of curious to Robinhood. So you have that. You. You see what. You can see great traffic and what people are looking at how much of Robinhood is people who say, all right, help us invest.
- [13:28]
Stephanie Gill
Well, we're new we in Robinhood strategies, we're at 1.6 billion now. We've only been around for a little over a year. So it's definitely new for the Robinhood platform to have that. And it's growing. We've got 285,000 customers so far. And I think it's something that we haven't, you know, we just, we've spent a lot of time helping our active traders and we will continue to and so having more of a focus on those who don't want to do it every day also because our average age of our customer is 36 instead of like 30 a few years ago. And so, you know, you get busy, you have a life, you have a family, and you may not want to manage all of your money.
- [14:05]
Melissa Lee
How is what you do different from what you see the retail traders do
- [14:10]
Stephanie Gill
in terms of inside Robinhood Strategies? I think we are, we are a little bit, maybe sometimes longer term focused. We definitely see some clients that are probably like that, trading in and out of things. But we try to, you know, this is a market that you do have to be active and take some profits where you can. But I think you're, you know, we, we also see our clients using us as a place to find ideas because we sometimes invest in things that they wouldn't necessarily have thought of.
- [14:39]
Melissa Lee
Right. Interesting. Stephanie, thanks for joining us. Appreciate it. Stephanie Guild of Robinhood Bonoin how do you think about where you want to be in the markets, given the signals we've gotten this week?
- [14:53]
Bono
I think this week what was reinforced to me is that the AI trade is very much alive and well. And as she mentioned, it's just more in the picks and shovels and some of the names that haven't necessarily surfaced. I mean, Caterpillar, for example, is, you know, historically thought of as, you know, an old economy industrial company. But it's now gotten like a tremendous AI boost. I think ETN is another name like that. If you have look at even the hyperscalers, just the way that companies are being rewarded and punished for either monetizing or not monetizing AI. So I think sliding down the visibility scale in terms of AI is probably the way that you want to do that.
- [15:34]
Melissa Lee
Yeah. Mike, what do you, what are you seeing in terms of risk appetite at these levels in the options market?
- [15:42]
Mike Cohen
I mean, we had a really bullish day today. You know, Fridays, obviously you see greater, you know, greater numbers of contracts trading, but calls significantly outpace puts today across the board. So we're looking at index ETF and, and single stock. And one of the things that often happens when you've had such a pronounced rally like we have experienced now, and that's mostly tech driven, is that, you know, provided everything is relatively intact. And I think there are obviously some problems, but mostly it is. You will see some broadening. And so I'm kind of with Bono and that I think where people should probably start to look is more old economy. And here's just something to think about. A lot of those companies are actually trading quite cheap. But contemplate this. How is AI going to hurt, say a Kimberly Clark, for example? Are people going to start using less diapers or toilet paper because of AI? And the answer is no. Those companies are going to benefit from the productivity improvements that technology can provide and the use of their products is not going to decrease.
- [16:38]
Melissa Lee
I can't displace that, that's for sure. Karen, you own a lot of the. Or not a lot, but many a lot of diapers. You have done that too? Yes, but sort of the old economy stocks.
- [16:51]
Karen Feiderman
Yeah, so I like some of the old economy stocks. I mean, you know, something like a United Rental, but that's very much now a sort of adjacent AI. Right. These giant projects that they do that will take a long time and use a lot of construction equipment. Those are great projects for them. I like this.
- [17:10]
Melissa Lee
Meantime, the Japanese yen popping against the dollar after Reuters and others reported that Tokyo authorities are working to prop up the currency intervention. Central bank data showing Japan may have spent nearly five and a half trillion yen, or $25 billion in the intervention. Earlier this week, the yen was trading at 160 against the dollar, its lowest levels in nearly two years. Some reports have it at $35 billion. Tim, I mean, I guess the question is, does it last?
- [17:35]
Tim Seymour
It doesn't last. It's ephemeral. But it is a case of where the message. Thanks. Well, something on a Friday the message is important. And so whereas if this was Argentina or Turkey and they were defending a currency and currency traders alone could blow this away. I do think part of the dynamic with Japan has been there's been a sense that the BOJ didn't want to do anything. So I think as much as they will also never talk about in concert with other countries, I do think there are conversations that went on. I do think Japan has inflation. I do think a stronger yen in the short term is something that I wouldn't be worried about. It's like all of these trades, if there's a high momentum and a high velocity move I should say a very fast move here. That's usually a sign of a flight to quality and that's usually a risk off trade.
- [18:22]
Melissa Lee
Coming up, the countdown to Berkshire Hathaway's annual shareholder meeting. It's on. And for the first time, the Oracle of Omaha will not be taking the stage. What investors can expect to hear as Warren Buffett steps aside, that's next. And later, all the fast movers catching our eyes today. What is driving the post earnings moves in Cat, Estee Lauder and Lilly and whether investors should believe the latest bitcoin bounce. Don't go anywhere. Fast Money is back into
- [18:48]
Tim Seymour
this is Fast Money with Melissa Lee right here on cnbc.
- [18:56]
Dr. Guy Winch
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 out on the road, it's nice to have a partner who can help you make the most of your journey. A partner like the Love's Rewards appreciate. With Love's Rewards along for the ride, you earn points on food, fuel, drinks and more every time you scan. Then you can spend those points at Love's just like cash, so every stop is even more rewarding. Download the app today and watch the points roll in mile after mile. Love's Rewards save and earn at every turn. Terms apply. See website for details.
- [19:57]
Strayer University Announcer
At Strayer University, we help students like you go from is it possible to anything is possible by offer access to up to 10 no cost gen ed courses so you can reach your goals affordably and fast. Visit Strayer. Edu to learn more. No cost gen EDS provided by Strayer University affiliate sofia. Eligibility rules apply. Connect with us for details. Strayer University is certified to operate in Virginia by Chev and has many campuses including at 2121 15th Street north in Arlington, Virginia.
- [20:27]
Melissa Lee
Welcome back to Fast Money. Berkshire Hathaway shares under pressure this year. Heading to tomorrow's annual meeting, CEO Greg Abel set to take shareholder questions without Warren Buff Buffett for the very first time. For more on what to expect, senior markets commentator and overtime co anchor Mike Santoli who is on the ground in Omaha. Mike, it's good to see you again. You've been to a lot of these things. What question do you want to ask Greg Abel in terms of how he will differ from Warren Buffett's tenure?
- [20:53]
Mike Santoli
I think it's largely about how he does view allocating capital, and I don't mean just the cash that's sitting around and what stocks might be bought and sold, but whether in fact he would like to kind of move in a particular direction already exposed in Berkshire Hathaway's portfolio, its portfolio of wholly owned businesses, or if there are new areas, how much opportunity he sees to sort of raise the metabolism of some of the operating businesses. And then beyond that, I was very interested to hear and see that Greg Abel had identified what the core positions are in that portfolio. Right. Apple, American Express, Coca Cola, Moody's and the Japanese trading house investments as basically low cost basis core holdings where they're an anchor investor. What, what do they think about the rest of them and why are those the core? And I also think he might have something very fascinating to say about Japan as an opportunity, even if he's not eager to make big pronouncements about macro in general or, or things like policy.
- [21:54]
Melissa Lee
See, I'd love to get his thoughts on AI and where he. I mean, we've seen so much disruption this year in terms of, you know, just valuations being decimated by the concerns. I will replace certain areas if there is value there for sure.
- [22:07]
Mike Santoli
And I think, for example, in the insurance business, it's interesting to think about how AI can be better deployed. And then if AI disrupts other industries or at least the market thinks they're going to be disrupted, does that create dislocations, investments to invest? Or maybe they want some kind of, maybe more direct play on the capex side of it. I think it's fascinating that Berkshire Hathaway has underperformed, you know, from a very, very sort of stretched peak of valuation a year ago at a time when the world wants hard assets that can't be displaced. And that's what Berkshire Hathaway is full of, right? The railroad, the electric utilities, all the rest of it. It really is these corporations, core businesses, housing related, a lot of that is not going to be threatened by AI. So maybe he can articulate some of that, as I also expect him to just confirm that the culture is not meant to change that essentially he's going to be an instrument of continuity when it comes to how the company has investment discipline and runs its, its empire. And by the way, I was woefully unprepared with the tchotchkes last time, last hour. But I do have.
- [23:14]
Melissa Lee
How can you go there and not have any stuff to show for it? Because that is integral to the sort of the culture of this annual shareholder meeting. Mike, what do you have now?
- [23:24]
Mike Santoli
Yes, what we have is some of the squishmallows, including the new one. This is Greg Abel right here. If you didn't know what Greg looks like, it's exactly like this is what he looks like. This is some kind of a little builder toy. Also fun because Greg apparently is a big hockey guy, plays hockey. There's, you know, new seas candy that's branded in that direction for hockey player as well as, oh, by the way, a spatula with his image on it from Pampered Chef.
- [23:52]
Melissa Lee
I like the spatula.
- [23:53]
Mike Santoli
As I said, put your orders in. Yeah,
- [23:58]
Melissa Lee
you're going to be. I hope you brought an empty suitcase, Mike.
- [24:01]
Mike Santoli
Yeah, no, we, we can ship, we can, we can carry whatever you need.
- [24:05]
Melissa Lee
Excellent, Mike. Thank you. We'll catch you tomorrow, 9 o'. Clock. You can catch the whole thing. CNBC.com Mike and Becky will be there for every moment. But I mean, it's such a, a fun event and such an important one tomorrow in particular because Greg Abel takes over.
- [24:20]
Tim Seymour
I kind of like to know a little bit more about what's going on with the spatula, just anyway. But I think back to Greg Abel, who has already leaned into the insurance business, and I think that's going to be core. We already gotten some sense that there's a lot of confidence in the changing of the guard at Coca Cola and Apple. We've got a sense that outgoing, outgoing players, we've kind of dumped their portfolios. So, you know, I think there, there is not going to be a massive change. I think Japan makes a ton of sense to me. Improving governance, improving tailwinds in terms of truly transparency into companies that really had not had that, but 20% discount to the S and P. I like Japan.
- [24:59]
Melissa Lee
We've got a newsletter here we want to bring you. GameStop is reportedly preparing an offer to acquire ebay. That is. According to the Wall Street Journal. It is reportedly part of Ryan Cohen's plan to turn GME into a $100 billion plus company. This is an interesting one. You see their shares of ebay up by about 9%. This really wasn't on my bingo card for this hour. I don't know what your initial thoughts are, Karen, in terms of I haven't looked at the market.
- [25:24]
Karen Feiderman
I got to look at where are they incorporated, how much do they own do they own any. Is this a 13D? Looks like. Looks like. I don't know.
- [25:33]
Tim Seymour
Well, ebay on its own was not heading towards 100 billion in market cap. So it does give some sense that there's, there's a platform dynamic and leveraging that is, is something. There's some intrinsic value and has it.
- [25:48]
Karen Feiderman
Well, I don't know that it's trading up. Is, is a sign of anything because everything's been trading up. But this, this is fascinating though.
- [25:54]
Melissa Lee
Yeah.
- [25:55]
Karen Feiderman
And is the, is that part of the GameStop plan for. I mean, if you're a GameStop shareholder, what is the shoulder base of GameStop now?
- [26:03]
Melissa Lee
I don't sure if it's in terms of sort of stock or the basis. Mike, I don't know if you've seen any action worth noting in shares of gme. Once upon a time it was one of those stocks and options that were very active.
- [26:19]
Mike Cohen
So what's interesting to me, and this kind of caught me off a little bit because both GameStop and eBay saw extraordinarily above average volumes. So I'm looking at my screen right now. EBay traded seven times its average daily call volume today. And that was a little inexplicable. And GameStop 570,000 call contracts, 180 is what we would normally see. So I'm not trying to stir up the hornet's nest here, but it's awfully interesting that both of these names would have seen such extraordinary options volume. And then we get this news after the close like this.
- [26:59]
Melissa Lee
Yeah, I love it when you stir up the nest.
- [27:01]
Karen Feiderman
Yeah. So GameStop I'd see is $5 billion, I think of net cash. However, the enterprise value of ebay at the close, it's a little higher now, is 49 billion. I don't know how excited I would be as an ebay holder if I were one to get some sort of GameStop GameStop currency, GameStop stock as part of the consideration. Maybe they lever up. I don't know this, I, I find this kind of amusing as well. Just the idea of we were on death's door right. When we survived. We did.
- [27:36]
Melissa Lee
I mean by ebay we did a great job.
- [27:38]
Karen Feiderman
They raised capital into that. Good for them. And now they're going to buy eBay.
- [27:42]
Melissa Lee
Yep. We'll continue to follow the story if we have more developments. Again, the Wall Street Journal is reporting that GameStop is preparing a bid to buy, buy all of eBay. GameStop shares are up 6%. EBay up about 7 right now. A lot more Fast money to come. Here's what's coming up next.
- [27:57]
Tim Seymour
Beauty bailouts and bitcoin. The fast movers catching a bid today as markets wrap a wild week.
- [28:04]
Dr. Guy Winch
What's driving the action and how to play the pops.
- [28:07]
Tim Seymour
Plus, shop till you drop the shift that's bringing younger generations back to shopping centers and what it's signaling about the health of the consumer. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
- [28:26]
Dr. Guy Winch
Out on the road, it helps to have a partner like the Love's Rewards app. Download Love's Rewards and get great deals like a Free Loves coffee or fountain drink. Just buy any four any size and get the fifth one free. Loves, Rewards, Save and earn at every turn. Terms apply. See website for details.
- [28:42]
Strayer University Announcer
The Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen and keep striving. Visit strayer.edu Jack WelchMBA to learn more. Strayer University is certified to operate in Virginia by Chev and as many campuses, including at 2121 15th Street north in Arlington, Virginia.
- [29:11]
Eamonn Javers
We've all heard those scary IRS radio ads that try to frighten you into calling. But Tax Relief Advocates is different. If you owe the IRS 5,000, 50,000 or even $500,000, TRA has a solution for your tax problem. It doesn't matter if you're in your car or at work or with your kids. No matter where you are, visit tra.com don't lose hope. TRA could reduce or even eliminate what you owe. Their passion is taxes and helping people and businesses fix IRS problems. They have over a thousand five star Google reviews and an A rating with the Better Business Bureau. You no longer need to fear the irs. Generous tax relief programs are available now to give you a fresh start. So don't wait. Simply visit tra.com that's tra.com or call 800-583-6428. Once again, that's 800-583-6428. Tax relief advocates real solutions for real people.
- [30:12]
Melissa Lee
We've got a news alert out of D.C. the White House planning to withdraw troops from Germany. Let's get to Eamon Jabbers with the latest.
- [30:17]
Eamonn Javers
Eamonn yeah, Melissa. This report coming to us first from CBS News now matched by other outlets. And what the report is that about 5,000 troops in Germany will be brought back to the United States, according to Pentagon plans that are underway right now. Now, as a percentage, that's not enormous. The pentagon has about 36,000 troops in Germany right now. But as a political statement, it certainly will not go unnoticed in Germany. The president has expressed frustration time and again with the German government for not joining his war in Iran and has expressed enormous frustration with NATO itself as a whole for not participating in that war as well, saying that he doesn't believe that NATO would be there to support the United States, although NATO did invoke its collective defense agreement back after September 11, 2001. So this news just crossing, Melissa, and now it looks like a couple of news agencies have matched it. Back over to you.
- [31:15]
Melissa Lee
All right, Eamon, Thanks. Eamonn Javers. Stocks mostly higher to kick off the month of May. The NASDAQ leading the way up almost a percent while the S and P added three tenths of of a percent, both closing at records. The dow shedding about 150 points. Bitcoin higher by more than 2%. And in positive territory for the week, the crypto now trading around the 78k mark as they lauder up after the beauty brand beat earnings estimates and raised its full year forecast. The company also said it plans to cut more jobs as part of its turnaround efforts. And JetBlue taking off amid reports that Spirit Airlines is close to shutting down. Just in the last hour, the Wall Street Journal reported that Spirit is expected to see cease operations at 3 at 3am Eastern Time on Saturday. Bono and what you want to trade?
- [31:59]
Bono
I want to trade. I want to trade bitcoin and I want to trade bitcoin adjacent names. I think it still is very much a reminder that there is still a pocket of the market that is looking for risk and is willing to push further out on the beta curve. And I think that is the type of activity, activity that I think you might want to caution against heading into the macroeconomic environment that we're into.
- [32:19]
Karen Feiderman
All right.
- [32:20]
Melissa Lee
Coming up, the retail detail. The Sea of Tanger will join us next to dig into the company's latest earnings and the trends he's seeing among consumers. More fast money after this. Welcome back to FAST money. Outlet mall operator Tanger reported record leasing volume last night and increased its guidance for the year. This even as the consumer comes under pressure from rising gas prices, prices and economic uncertainty. Tanger stock was down 2% today, but is still up nearly 9% this year. CEO Stephen Yellow joins us on set here. For more on the quarter in the state of the consumer. Stephen, great to have you with us.
- [32:52]
Stephen Yellow
Thanks for having me back.
- [32:53]
Melissa Lee
We were just chatting during the break. It's surprising to you. Is it surprising to you that the consumer is still doing well in spite of all of this?
- [33:01]
Stephen Yellow
Well, yeah, you know what's, what we're seeing is a much younger consumer show up in our shopping centers. And that's part of the surprise. But you know, with rising gas prices, the old narrative, particularly in outlet centers was people have to pile into the car and drive 20, 30, 40 miles to get to the center. But I'm finding that a lot of people are moving closer and closer into the geographies where we have shopping centers. So a lot of the localization work that we've done, restaurants, entertainment, things like that, I think are really resonating across our portfolio. And we're seeing the customer come and shop.
- [33:32]
Melissa Lee
Triple A reported that the average price of gas station lean is now at 430, which is up from I think 403 or something like that last week. So the spike is real in terms of how quickly it's gone up. At what point do you start getting concerned? Oh, this level, I would expect to see some traffic slow down.
- [33:49]
Stephen Yellow
Yeah, you know, I think in our outlet portfolio and you know, we have some full price shopping centers too and they serve a very localized customer base. So I don't think there'll be as much impact across that portfolio. But, but in the outlet portfolio, you know, when you're selling value every day and when you've got the opportunity for customers to come in and buy their favorite brands and you gap gaps back. Unbelievable business. Nike coach Michael Kors at the best possible price. I think that the customer is like, you know, the, the gas price is less of an issue when they know they're going to get great savings when they come in, they shop.
- [34:25]
Tim Seymour
Stephen sharp dressed man. Well, we'd love having you. Great numbers last night. Part of that beat was lease income and you know, give us some sense of also just a step removed from the consumer. But, but leasing demand and what you're seeing because on some level those are the folks as we just said. I mean Gap, great turnaround. Not everyone's going through that. So what are you saying?
- [34:45]
Stephen Yellow
You know, first of all, from a tenant point of view, the first thing we say is it's really not about categories, it's about brands themselves and the brands that are really resonating. So you know, you'll have the accessory category as an example. Well, coach is just such an Outlier doing unbelievable business. The family apparel category is doing extraordinarily well right now. Gap is an outlier and you know, the athleisure business and we know what's happening with some of the athleisure brands that had, you know, great success in the last few years. But now all of a sudden the brands like Aerie and if you take a look at the three, those three brands that I'm calling out, it's that young consumer is really feeding into to a lot of that as far as leasing volume is concerned. You know, there's not a lot of new supply being added to the marketplace from a development point of view. So the, the M and A business, there's a lot of acquisitions going on. A lot of, lot of properties are changing hands, but they typically come well leased. So there's not a lot of space. And I find the brands are really competing for space and trading up a lot of these shopping centers. The successful centers are just getting more, more successful. And the middle of the pack centers are starting to see interest from brands that they hadn't seen before. And we're really benefiting from a lot of that. You know, last time I was on, we talked about Sephora just as an example. Well, Sephora is not an outlet player, but coming into the outlet business because they see a customer shopping with us and they want to put their product in front of that customer.
- [36:04]
Karen Feiderman
So when you say you're seeing strength in a younger consumer in their twenties and yet we hear stories about, you know, fears of AI disrupting the job market for someone in their early 20s, you're not seeing that at all. It sounds like, well, hasn't they're. They're working and have money to spend.
- [36:20]
Stephen Yellow
Yeah, you know, it hasn't really resonated yet. And we're seeing that Gen Z consumer that's really a big cohort of ours now. That's who we're marketing to. That's are we have a loyalty program. That's who the key players are. As we keep on building that loyalty group up, we're seeing a lot more of that Gen Z Z age bracket coming into our centers and you know, sort of looking for deals, looking for great brands, looking for the experience, looking for amenities and spending more time. You know, that the largest dwell time across our portfolio is coming from that cohort of consumer. Has the I fear resonated. It's probably more fear than reality right now. So you know, we'll, we'll make hay while the sun is shining, particularly as it relates to that consumer.
- [37:01]
Melissa Lee
Stephen, great to see you. Thanks for coming by. Of Tanger Maika, what do you make of skt?
- [37:08]
Mike Cohen
Yeah, I mean, I'm not really that interested, to be honest. I mean, look, it's, you know, I always use the Holly index as my barometer for consumer strength, and I'm not really big on the shopping side. I will tell you that if I'm looking at the consumer, one of the names that has long been on my list is, is Ralph Lauren. Frankly, I think that's, that's been certainly an impressive place. And another thing on the consumer side that I think is kind of interesting, and you mentioned Estee Lauder earlier. That stock did very well today. The name, though, that I'm kind of interested in on a relative basis is actually elf. And I probably should defer to people who know more about the makeup business than I do, but that's a faster, growing business at a better turn. So when I'm looking at the consumer, that's sort of the area that I'm looking at. Long, Elf, Short, Estee, Long, Ralph.
- [37:54]
Melissa Lee
Run. All right, coming up, prediction markets soaring in popularity, but it's bots, not traders, for reaping most of the profits. A look at what the betting data is signaling. Next for Fast Money into. Welcome back to Fast Money, a report this week maybe giving prediction market betters pause before making their next wager. The study found retail traders are actually losing money while algorithmic strategies are netting a profit. More of the battle between bots and traders. Let's bring in the professor behind the study, Josh Delavon Vedova of the University of San Diego. Josh, great to have you with us.
- [38:33]
M
My pleasure. Thank you for having me.
- [38:35]
Melissa Lee
I feel like this is what most people believe, but you've actually found the data behind it at this point. And it's not that the retail trader is guessing wrong on the outcome. It's that they're slower. Can you explain?
- [38:46]
M
Exactly right. So in my research, I found that retail traders are actually correct 51% of the time, but lost $80 million over the last four years. In contrast, bots, these algorithms that are trading thousands of times per day over thousands of markets, they're not correct. They're correct at a rate about 50%. A coin flip, and they made $130 million in prediction markets. It's not just about being right. It's about being early. And that's how you make money.
- [39:17]
Melissa Lee
Okay, and so what is the discrepancy? What is the difference between how much retail makers make and how much the bots make.
- [39:25]
M
Exactly. So think about retail traders. They're coming in quite late, just three days before these markets resolve, and they're betting about 85 cents to win a dollar, win 15 more cents, while bots are getting in weeks before building up these markets, trading much more volume, betting 50 cents to win 50 cents. It's not just about the direction, it's about execution, quality. Similar with high frequency trading in equities, for example.
- [39:55]
Karen Feiderman
Professor, thanks for coming on. So are some of the retailers smaller bets or bigger bets than the bots? Who's betting more money and does that matter in the calculation here?
- [40:06]
M
Yeah, this is interesting because bots only comprise of 4% of the traders, but they make up 90% of the volume, while everyone else just constitutes 10%. They're actually turning over the market, making spreads, getting in early, and that seems to be the most profitable strategy. By the time retail investors come in, like you and I, trading at 90 cents, there's nothing more to be gained. We're betting too much to win too little.
- [40:36]
Tim Seymour
Josh, it's Tim. Thanks for joining us. Fascinating, Professor. And so when I think about this, it seems like we could get second and third derivative bots moving bots in one direction to go the other direction. And how much of this. And it's not necessarily market manipulation, but obviously the markets themselves, as you said, are inefficient and larger players are pushing markets around. So it seems to me that the bots would be competing in a way that we would be almost three steps down the checkerboard.
- [41:06]
M
Yeah, that's an interesting comment, because bots are actually moving prices more towards fair value. So there's actually a competition among bots in which the top 10% of bots are making 70% of the profit. These are sophisticated market makers coming in from other markets and they're providing liquidity for retail or other investors that embed the information. So when it says Rory McElroy has an 85% chance of winning the Masters, he actually has an 85% chance. It's not so much they're manipulating the market, but they're being compensated for building the market.
- [41:41]
Melissa Lee
So unlike the markets, the bots are not going against the retail traders. They're both betting against the house, so to speak. And so I'm wondering, in your view, how does a retail trader lose out? They're able to only win less money because of the presence of the bots and heavy volume.
- [41:58]
M
So bots are providing liquidity, as I mentioned, but in this market, there isn't a house. It's a peer to peer network in which investor A is making a trade against investor B. The best way that they're losing out on money is they're betting too much to win too little. If you're betting 90 cents to win a dollar, you have to be right 90% of the time to be profitable. They're only correct 51% of the time. That's not a profitable strategy in the long run.
- [42:29]
Melissa Lee
All right, Professor Josh, thanks for coming on. I'm sure a lot of people out there will be shocked by this data. Thank you.
- [42:37]
M
Thank you so much.
- [42:38]
Melissa Lee
I misspoke. They are going at. There's no house. But it is interesting that the odds are stacked against you basically.
- [42:44]
Tim Seymour
Well, it's much like a lot of things, it's how you bet. And you could sit at a poker table one hand too long if you haven't been betting the right amount.
- [42:54]
Melissa Lee
Coming up, the traders will lay out their top charts as we wrap up a week full of big market swings. All the picks straight ahead. Welcome back to Fast Money. It's been a big week for markets with big tech earnings, a Fed decision, new market records and a slew of massive single stock moves. So we thought we'd ask for traders which charts caught their eyes this week. So, Mike, why don't you kick it off chart of the week time?
- [43:20]
Mike Cohen
Well, you know, we'll start at the top Alphabet. That's the chart that definitely caught my eye. And you know what's interesting? We can show the price chart, we can't show the forward earnings chart. I wish we could because if you did that, this is one of those names that we've just been talking about has actually become cheaper over the course of the last seven days.
- [43:42]
Melissa Lee
Yeah. So your chart of the week is really Forward earnings chart.
- [43:46]
Mike Cohen
Exactly. That's clever.
- [43:48]
Melissa Lee
Not as catchy, but yeah, I like that. Karen, what's caught your eye?
- [43:52]
Karen Feiderman
Well, Google, but I answered too late. So when, when they asked again, what was your chart? This one, Qanta Services. And it was really just an absolutely extraordinary earnings. They beat on earnings by 30%, which is really crazy. Now what they do is they do a lot of stuff related to the electrification and maintenance and new electrification and obviously data centers and AI as well as onshoring and general construction. All of that just led to blowout earnings. If I owned none, would I buy it right here if I were.
- [44:29]
Tim Seymour
Honest question.
- [44:30]
Karen Feiderman
No is no. It's just, I mean, it's great there, it's extraordinary. But the valuation is also quite high.
- [44:36]
Melissa Lee
All right, now what's your chart?
- [44:40]
Bono
It's Eaton. And you know, this week the hyperscalers already had everyone's attention, so this one popped up because I was focused there. And notice this, I think Caterpillar gets a lot of the attention. We've seen them run up in that name. Eaton is also up about 55% on a one year basis. But if you believe the AI super cycle story and the backlog that they've expressed, I think this thing has upside. With that said, it is fully valued here. So you have to be buying into that story.
- [45:06]
Melissa Lee
And Tim, what is your pick for the week?
- [45:08]
Tim Seymour
My chart of the week is a tip of the hat to Karen and Carter who have talked about this name. I'm talking about Zoom. And it's a company that is breaking out now and it's finally breaking out. Carlos talked about that long base and we know the farther the space is
- [45:21]
Melissa Lee
that the longer base.
- [45:22]
Karen Feiderman
Yes, father.
- [45:24]
Tim Seymour
It's also a company that their companion is three times engagement of what it had a year ago. They had almost 2 billion of free cash flow in the first quarter that probably improve upon that. In fact they're talking about buybacks and you know, possibly cash givebacks. It's a story of a software company, company that's outperforming during a software, excuse me, a software winter. And it's been very impressive. So it's not expensive. Zoom.
- [45:49]
Melissa Lee
They also have a little bit of, they have a stake in a little
- [45:52]
Karen Feiderman
bit of a ton. More than $5 billion.
- [45:56]
Melissa Lee
Up next, final trades. Tim, did you just put that pin on? What a lovely pin.
- [46:05]
Tim Seymour
This is a sunflower. And if you're a trader, everybody knows that the sunflower is a flower, has the Fibonacci sequence. It's also the flower for the wealth for women event on May 28, which Karen and a lot of hotshot women are going to there and teach other women. It's going to be a great day. In fact, get a ticket for mom for Mother's Day.
- [46:22]
Melissa Lee
That's right. Time to get your ticket. Wealth for Women May 28. Scan the QR code on your screen. Go to CNBC events slash wealth for Women. Final trade time. Mike Coe.
- [46:32]
Mike Cohen
Yeah. More than 10 years after AlphaGo Alphabet continues to demonstrate their leadership and AI
- [46:37]
Bono
Google Bonoin power and grid infrastructure Play Eaton.
- [46:43]
Melissa Lee
Karen.
- [46:44]
Karen Feiderman
Yeah, quick shout out to my sister producer Wendy Finer in her movie Devil
- [46:47]
Melissa Lee
Wears Prada to open nice and meta. Tim.
- [46:51]
Tim Seymour
Got to go see that Estee Lauder. Maybe I'll put on some something nice
- [46:54]
Melissa Lee
from Estate Mad Money starts right now.
- [46:59]
Edward Jones Financial Advisor (Narrator)
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 Real talent is
- [47:31]
Bono
defined by what people can do, not where they learn to do it. So by stopping at the education section of a resume, you might throw away the perfect hire or skills first. Hiring helps you see talent others miss. Like more than 70 million stars skilled through alternative routes, let their story unfold and gain a competitive advantage. Because hiring managers who start with skills are 60% more likely to find a successful hire. Hire skills first. Learn why at tearthepaperceiling.org, brought to you by opportunityatwork and the ad Council.