← CNBC's "Fast Money"
CNBC's "Fast Money"
China Trade Tensions Ramp Up… And Takeout Targets In The Pharma Space 6/4/25
00:43:49
U.S.-China trade tensions ramping up, as President Trump weighs in on his exchanges with China’s President Xi Jinping. How the markets are handling the latest developments, and what we can expect from other trade deals in the works. Plus Doses and Deals. Pharma in focus as M&A heats up in the space. The names one top health care anlayst is watching as potential takeout targets. Fast Money Disclaimer
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- [00:00]
Melissa Lee
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities, and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, Member, SIPC As America's leading business lender, bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation, we help businesses thrive so communities prosper. What would you like the power to do? Learn more@bankofamerica.com LOCALBUSINESS bank of America Official bank of FIFA Club World Cup 2025 Copyright 2025 bank of America Corporation. All rights reserved. Live from the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Rising tensions, President Trump with some very early morning social posts as trade negotiations with China remain strained. What are markets pricing in and what are the risks ahead for investors in a rare downgrade? A top analyst cutting her rating on Apple ahead of next week's big developers conference. Can the tech giant right its course in the back half of the year? Plus dol tree getting a big discount after earnings. A new report put self driving technology in the spotlight. And Curry Inc. How the Golden State star has grown its business empire way off the court. I'm Melissa Lee, come to you live from studio BE at the nasdaq. On the desk tonight, Steve Grasso, Carter Worth, Dan Nathan and Gaia Dani. We start off with the latest sign of rising tensions in the US China trade battle. President Trump taking a truth social early in the morning to comment on the difficulties in negotiating with his Chinese counterpart. While while markets seem to have taken his comments in stride, the Nasdaq and S and P both slightly higher on the day. The early morning post highlights the lack of progress in negotiations between the two countries. Our Megan Casella is in Washington with the very latest. Megan?
- [02:10]
Megan Casella
Melissa, that's right. It's been a day and a half now since the White House first said that Presidents Trump and Xi were likely to talk this week. But no news yet today on whether and when that call might happen. In fact, the only news on the China front coming in that 2am tweet where the president called Xi extremely hard to make a deal. We'll have to see in the coming days, whether that makes Xi more or less willing to engage in a conversation. And there's little expectation here that a Trump Xi call would really solve everything or maybe even anything between the US And China. But US Officials have said that it's needed at this point in order to get those bilateral talks back on track. And in the meantime, take a look to recap here where things stand on all of the trade talks. Just one nation has reached a framework of a trade agreement and that's the UK but negotiations are ongoing with at least 17 other countries according to the Trump administration besides China. You can see some of them here. That includes the eu, Japan, India, Vietnam, among many others. And as a reminder, we are now just 35 days away from all of the higher so called reciprocal tariff rates against individual countries kicking back in. With the exception of China, that truce is set to last until mid August. For everyone else, though, the clock really is now ticking. Melissa, Melissa, Melissa.
- [03:23]
Melissa Lee
And of course this tweet, Megan, comes after the truce social post saying basically that China is not in agreement in compliance with the agreement made in Switzerland, which refer to rare earths, but probably other things as well. Has that call between President Xi and President Trump, has that been scheduled at all? Was it expected for a long time now?
- [03:41]
Megan Casella
It's been expected, if you remember, since almost the start of the term when the first round of tariffs against China on fentanyl measures first took place. The president has been very cagey about this for months now, not wanting to talk about whether he's talked with President Xi. But as far as we know, nothing has happened since the whole time he's been in office now. And as far as we know, it's not yet Scottish. The White House's language this week was just that it was very likely they would speak this week, but nothing yet on the calendar. We do expect to hear about it after it happens, at least from the White House and probably from the Chinese side as well. But as you say, this comes after the president said last week China had violated its agreement. China firing back, saying the US Also was in violation of the Geneva trade truce. So things are really sort of bottoming out almost here. They're really at a tense moment. This sort of call, while it wouldn't solve anything, would at least get the two leaders, you know, on the same page hopeful and give their lower level negotiators a path on which they can start to move forward.
- [04:36]
Melissa Lee
All right, Megan, thank you. Megan Casella, interesting developments here. And you got to wonder, two o' clock in the morning. What provoked President Trump to actually post that in the middle of the night randomly?
- [04:49]
Steve Grasso
I'm going to say this, I'm going to probably regret it, but the market is no longer. Wait for it, Mel. Terrified. See what I did there?
- [04:58]
Dan Nathan
You are correct, sir.
- [04:59]
Steve Grasso
That's pretty awful, actually. No, I mean, what provokes, what makes him do the 2 o' clock in the morning? I mean, the fact that the market didn't move to me suggests that it's sort of this under promise over deliver and, you know, come out and say how difficult they are to negotiate with and then a week later, you know what they're difficult to negotiate with. But we got a deal, we got a deal done. And I think that's what the market's probably handicapping.
- [05:20]
Gaia Dani
I mean, it's such a. All, even the words. I mean, does China even think they're negotiating? I mean, there's that you've been said to. China's economy has been the largest in 18 the last 20 centuries. Are they negotiating with us or are they just playing the long game? There's so many things that are unclear, but obviously people are working on it and there will be some outcome that will probably be better than the current uncertainty.
- [05:39]
Melissa Lee
Right. What did happen today? Lower yields on the back of weaker data.
- [05:43]
Dan Nathan
Lower yields. And then when you look at the market and you look at President Trump, he's got to, he's got to work out these trade deals before the midterm election campaign starts in earnest. So I would say by fall of this year, because the elections are in 2026, by fall of this year, you're going to see good deals get done, bad deals get done, or they're just going to rest the case on it. Something will get done by the fall.
- [06:08]
Carter Worth
That'S positive for the market, you know, resting the case. I mean, this is what he did with the Ukraine war situation, which I think is interesting. I think it surprised a lot of people. He's kind of just stepped away. And some of the commentary that you see is kind of lowering expectations for something with China. Pretty soon we're going to get to that 90 day sort of situation. Something's got to give there. They'll probably push it out one way or another. But I think there's another scenario here where, you know, this, this tax bill, I may use the name that you guys, it's the goofiest thing that I've ever heard of, a bill, you know, I mean, that sort of thing they're going to get. This could really start to conflate a little bit. Right. So if you are our allies, if you are China, well, there are adversary. But if you're Mexico and you're Canada or EU and there's some of our biggest trading partners and you see that there's a break within the President's party just to get one of the initiatives through, you might kind of wait the whole thing out. Right. So his approval rating is dropping on the economy. And so you think about what's going on. If we start seeing weakening data and the Fed just stays put a little bit and you can't get the tax bill done and then no one's come to the table, it could really get a little bit messy here in the back half of the year.
- [07:11]
Melissa Lee
All that is happening today. You can make the argument that all of those things were actually in place and that's why we saw lower yields. Lower yields because people are betting that the Fed will step in later in the year. So was that in the end a positive thing for the markets? And that's why the markets seem so inured to this true social.
- [07:28]
Steve Grasso
Just look, I mean the Fed cut rates in September. Yields went straight up. And you know, there's a very good chance if they cut again, yields do the same thing. We've talked about this. I know we all agree. I mean, as much as they control the front end of the yield curve, they don't control anything else. And bond market, I think the bond vigilantes are probably upset how weak the data has been because the only thing keeping yields lower is the fact that things have been slowing down. I think if it weren't for that, yields would be significantly higher. And I still think yields go higher from here.
- [07:56]
Melissa Lee
Where do you think yields go?
- [07:57]
Gaia Dani
I'm in the low rain. Yeah, lower yields, yields. I mean, look again, never once did we close above 5%. Never once. We were there above for 15 minutes about a year and a half ago. It has not been higher for longer. And the real question is, despite all of the record shorts, people are betting for higher yields.
- [08:15]
Dan Nathan
Yeah. And Robert Shiller put out a chart based on the correlation, or lack thereof between higher 10 year yields and the market performance. There's no, for the last 40 years, there's no correlation, or I shouldn't say since 1940, no correlation. And when you look at it, there's been years where the, where the interest rate is above 8% and the market returns are 19%. So I think we're worried about, you know, much ado about nothing. But to Carter's point, we haven't seen rates really explode to the upside as of yet. I'm in the lower rates camp as well. And the market's not paying attention to tariffs.
- [08:51]
Melissa Lee
Right.
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Dan Nathan
Or China or at all to anything.
- [08:55]
Melissa Lee
Well, let's move on and talk about China's curbs on rare earth mineral exports because the auto industry is paying attention to this. It is starting to take a toll on on the automaker. CNBC's Philippe's got all the details here.
- [09:05]
Phil LeBeau
Phil and Melissa, when the Wall Street Journal reported that there were some automakers that perhaps are curbing production because they cannot get a hold of the rare earth metals that are needed for magnets, especially for magnets in electric vehicle motors. Well, a lot of people said this is going to kill the automakers. But take a look at the stocks today. Didn't see a huge reaction here in part because this story has been out there for a while. It's just a question of whether or not we will see an acute impact on the automakers. Look, they're already dialing back what they're planning to do for 2026 today. Bank of America out with its annual car wars report. John Murphy, the analyst there, says in 2026 there will be just 29 vehicle launches, fewest in 30 years. They're going to replace just 11% of the sales in the market. Typically, new vehicles are replaced in 16%. So what are the automakers doing if they're not rolling out a bunch of new models going back to their bread and butter, most profitable ones.
- [10:05]
Dan Nathan
We're seeing companies lean into their core products, very specifically the D3 around trucks and model year 28 and 29, which.
- [10:14]
Eric Hersh
Potentially bodes well for profits.
- [10:18]
Melissa Lee
Yeah.
- [10:18]
Phil LeBeau
He said it could bode well for profits because they're going to go back to the core vehicles that they know they can sell. As you take a look at some of the Asian automakers, keep in mind they're facing 25% tariffs. So they're not in a great position either. But they're going to focus on their core vehicles, crossover utility vehicles, Melissa, Hybrids. That's where the focus is going to be for them. Bottom line is this. All of the automakers realize it ain't a great environment to kind of strike out and try to roll out new models. So what are they doing? They're pulling back.
- [10:48]
Melissa Lee
Yeah. And it's not a great environment too, if you need magnets, which you do need for motors for windshield bikes.
- [10:55]
Phil LeBeau
But let's be clear here, Melissa. Melissa, let's be clear. This has been out there for a While the headline got a lot of attention, but it's not to the point yet where you're seeing automakers say flat out, that's it, we're done producing EVs. There are some workarounds out there. They're not optimal, but at this point there still is some element of getting those rare earth metals that they need.
- [11:17]
Melissa Lee
All right, Phil, thank you. Phil LeBeau joining us with the latest on the auto industry. The CFO of Ford was at a UBS conference this morning talking about how this is an issue that they are closely monitoring. Again, as Phil had mentioned, it's not affecting production at this moment in time, but it is something that they are watching very closely. A trade group representing European automakers are also saying the same thing, that this could really impact production shortly if there isn't a workaround. And in that Wall Street Journal article, they also talked about actually assembling the motors here, shipping them to China, having a Chiclet sized magnet placed into it and then bringing it back as a workaround.
- [11:54]
Steve Grasso
Sounds efficient.
- [11:55]
Melissa Lee
It's more cost effective, it's more exact. You need rare earths, you got to go send it to China.
- [12:00]
Steve Grasso
Which is maddening if you think about it. But I mean, you have to do what you have to do in terms of General Motors because that's the only one I think that matters because Ford is sort of is what it is and Carter can speak to this. Since November, a series of lower highs and lower lows. 44 has been support a couple of times. I think it's going to be support again. It seems as though every time sort of GM falls on hard times, you get some sort of carve out of this administration. I think they're really concerned about the legacy auto market. So I think you're waiting to buy GM on a pullback to 44.
- [12:28]
Melissa Lee
They cannot let them send motors to China to be completed and then bring, I mean, that would just. If the whole point is bringing manufacturing back to the United States, that makes no sense.
- [12:38]
Carter Worth
Well, that's what's going on with Canada and Mexico. I mean, this is something that, you know, they came at the Canadians and the Mexicans right out of the gate. And you know, think about if Canada and Mexico also export about $30 billion in steel, where does that go? And it goes into construction, manufacturing and autos. You put a 50% tariff on that, that's $15 billion. Right. So this is the sort of thing, you know, they might cut back production, you know, that sort of. So none of this makes sense. It's not particularly cohesive. And it's the sort of thing that is going to keep the economy really stuck in the mud for a while because we were all pretty impressed about what we saw in Q1 and Q1 earnings. You saw, you know, what went on in the GDP number, it looked bad, was actually good. Right. But we could end up in a really weird inventory standpoint. We could end up in shortages, we could end up in a consumer that doesn't feel like buying and we can end up with businesses that actually start spending on Capex and R and D and stop hiring.
- [13:25]
Dan Nathan
The poster child for this whole rare earth minerals stuff is when you look materials is when you look at materials. Last week up 10%. Today up 12% when there's going to be a deal and there will be a deal with China, this stock will drop again the way it has in the past and the fords and the GMs will all rally. But as a footnote, all these car companies are working on a magnet free cars not going to be available today, not going to be available tomorrow or next year.
- [13:54]
Melissa Lee
But it's the year after.
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Dan Nathan
But they did say that some of them, they actually did say, which I find it hard to believe that the back half of 20, 20, 25, they're going to be introducing us. GM, that's Ford, that's Tesla where they're magnet free. We get for magnets for rare rare earth, we get 60 to 70% from China, we get 90% of antibiotics from there. It's unsustainable to have us not work out an agreement.
- [14:18]
Gaia Dani
I mean just in terms of the investments themselves. I mean you're talking about an area that Mercedes is down 30% from its doing high. Toyota, if you look at the constituents of the MSCI All World Auto Index, this has been a terrible place. No rebound with the market and it doesn't look like it's going to get any better.
- [14:35]
Steve Grasso
Yes, Mel, which is the T in my tube? We're speaking each other unspoken language off camera, but yes, Toyota hasn't done much of anything to be honest with the other three in the tube though have done pretty well though. Back to you, Uber Alibaba. I played the game correctly.
- [14:53]
Melissa Lee
Eqt yeah. Okay. All right. Meantime, our next guest says markets shouldn't assume the worst of the tariff impact is behind us. Hamilton Lane co CEO Eric Hersh joins us here in studio. Eric, great to have you with us.
- [15:04]
Steve Grasso
Nice to be here.
- [15:05]
Melissa Lee
So the low that we saw isn't the low of the, of this tariff trade war.
- [15:11]
Eric Hersh
I Don't think the court ruling is the end of this. I think the administration is clearly signaling that they're going after steel and aluminum and looking for any other way to continue to sort of exert leverage. They sort of have no choice. It's otherwise, you are a dog with no bark if you're trying to negotiate here. And everyone believes that the court's going to step in and just prevent everything. So I think the administration is going to continue to lean in aggressively wherever they can.
- [15:35]
Melissa Lee
So how does your view of the market change or not change if this is a more drawn out sort of. Because the scenario that you're laying out is a much more drawn out sort of negotiation where there could be tariffs in place, there could be exemptions made. It is an unknown sort of territory.
- [15:50]
Eric Hersh
I think that's where we are. I still expect that we're going to see some sort of a get together between Trump and Xi and there's going to be some fanfare and a parade and ultimately a transaction. So I still am optimistic that that's where this is going. But in the intervening time period, I think we're going to be living in this world where we are up, we are down, we are sideways, and there is a lot of turmoil and chaos.
- [16:12]
Dan Nathan
So, Eric, take me out six months. So past the turmoil and chaos, what do you think the biggest challenge is for the market? I think you already stated that, so why don't we just attack? What do you think the biggest opportunity is once we clear that chaos?
- [16:26]
Eric Hersh
Yeah, I think the opportunity is going to be all of a sudden you're going to see this demand kind of rush back in. I think we shouldn't kid ourselves. There is. We're already seeing the slowdown in the pullback, whether it's hiring, whether it's goods, whether it's manufacturing. That's all here. And that seems to be getting worse, not better. I talked to very few CEOs that are saying, boy, we're feeling great and ready to make a lot of big capital decisions around that. So I think the opportunity is in a whole bunch of sectors. We all of a sudden see a whoosh as people begin to kind of come back in over the next couple of months.
- [16:59]
Steve Grasso
We had Drew McKnight on last night. I asked him this question I'm about to ask you Friday of last week. Jamie Dimon talks about the bond market having a crack or something happening. He was convinced it was going to happen 5% to 10 year. What does that, if it happens, what does it mean for you? What do you think? It could happen.
- [17:14]
Eric Hersh
So I think it's a real possibility. I think you have enough very smart people and they're probably giving you better answers than I'm giving you. But you've got a lot of smart people who are saying we are seeing early warning signs and this is not good now for us. Selfishly, the private markets are a bit more immune from a lot of this. Our companies are not multinational, our companies don't have long supply chain stretched around the globe. So we're not seeing a lot of impact in our portfolios. But if we see a big crack in the bond market that is going to turn institutional investors completely upside down, you're going to see capital flows shut down significantly. So fundraising down, deal, doing down, all of that I think will just grind to a halt.
- [17:55]
Carter Worth
So Eric, back in the throes of the sell off, early April, we had a 10 year yield that was rising, we had a dollar that was going lower. So obviously, obviously bonds were getting sold and the dollar was getting sold and the stock market was getting sold and now the stock market's up on the year, it's made all that back. What does it mean to you that the dollar still down here right at the lows and you know, Even with the 10 basis point move lower in the 10 year today, 435 is still higher than where we were on April 2nd. So are some of the things that are in place right here setting up for an equity decline if we do see a protracted sort of situation where they're not going to have a meeting, they're not going to reach any sort of, you know, real short term deal that would, you know, be a phase one sort of situation.
- [18:32]
Eric Hersh
And I think on the dollar, the market's telling us that it's not viewed as the safe haven that it once was, period. I don't think it's any more complicated than that because we should be seeing a rising dollar in a, in an environment where we're sort of reassuring everything. We're not seeing that. I think there's only one explanation which is it's not the safe haven that it had been promised or that it had been, were perceived to be. So that dollar weakness to me is going to continue until we begin to see stability coming out the other side. It's causing investors to move capital into different places and to think about currency hedging in a different way, which is expensive. And it's again one of the reasons why in our industry capital flows are simply not what they have been historically because there's a bit of a jam up for a variety of reasons, whether it's hedging, whether it's chaos, whether it's uncertainty. It just means money is not flowing historic at historical levels.
- [19:24]
Melissa Lee
Eric, great to have you with us.
- [19:25]
Eric Hersh
Pleasure. Thank you.
- [19:26]
Melissa Lee
Eric Hamilton.
- [19:28]
Steve Grasso
Got to have him back.
- [19:29]
Melissa Lee
Number one, Eric Hirsch, excuse me, Hamilton.
- [19:31]
Steve Grasso
Lane from Hamilton Lane. And number two, you know, again, I'm concerned when Jamie Dimon says that's why I asked question last night tonight because I think it should be concerning. Again, not to suggest that he's right. But you know, he obviously has some sort of insight and I do think if you see another fissure in the bond market like we saw in early April, that things that get problematic here very quickly.
- [19:49]
Gaia Dani
But to be fair, he did say I don't know if it's six months or six years.
- [19:53]
Melissa Lee
Right.
- [19:53]
Gaia Dani
So that's an academic thing at that point. Right?
- [19:56]
Melissa Lee
That's true. Good point there. All right. We got a newsletter here. Want to get to on stablecoin issuer Circle upsizing its IPO plans. Tenaya mcheel has the details. Tanaya. Hey Melissa. Yeah. Per a new filing circle looking to offer an additional 2.3 million Class A shares. So that would bring the total offering to 34.3 million shares at between 27 to $28 apiece as of the amended offering earlier this week. We're still standing by for pricing. Melissa Priced at the upper end of that range, it would value the company at about $6.1 billion. The company could raise here almost $1 billion. Bloomberg reporting just now it is likely to be above $1.1 billion. Melissa Wow. 10 thank you to Nay McHale. Coming up, we're biting into Apple, a top analyst downgrading the name just days before wwdc, why they are souring on the stock and whether our traders agree. Plus dealmaking in the pharma and biotech space. We'll take a look at some potential takeout targets and the prognosis for the sector ahead. Don't go anywhere. Fast Money's back in two.
- [21:00]
Eric Hersh
Your new beginning starts now. Dr. Horton has new construction homes available in Ellensburg and throughout the greater Seattle area. With spacious floor plans, flexible living spaces and home technology packages, you can enjoy more cozy moments and sweet memories in your beautiful new home. With new home communities opening in Ellensburg and throughout the Seattle area, Dr. Horton has the ideal home for you. Learn more at Dr. Horton.com Dr. Horton, America's builder and equal Housing Opportunity Builder. How will you shape the future of industrials with confidence. Whether you need to define your strategy, optimize your supply chain or keep pace with data driven manufacturing, EY professionals understand industrials and the sectors they supply, bringing the insights that deliver real outcomes. With a full spectrum of services. EY helps strengthen your business from factory floor to product development and beyond. So when the global market shifts, your business is agile enough to adapt. EY Shape the future with confidence.
- [22:02]
Melissa Lee
Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single purpose, making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org welcome back to Fast Money. A rare downgrade of Apple Just days before the kickoff of its Worldwide Developers Conference, Needham cutting its rating on the iPhone make maker from buy to a hold, citing threats to near term revenue and EPS growth as well as competition and valuation. And just in the last few minutes, an appeals court denied Apple's request to pause an order to open its app store to more competition. It was part of its lawsuit against Epic Games. Apple shares are down 19% this year, the worst performing name in the so called Magnificent Seven. There's also an FTSE article today saying that the Alibaba Apple AI partnership that would be delayed because of this ongoing trade war can't get approvals necessarily necessary in China. Obviously that is a soft way that China can exert control over US companies. So a lot of things piling up here. But I feel like the bears are already all over this stuff, maybe for good reason.
- [23:22]
Steve Grasso
I admire the call because as you mentioned, not a lot of people have the temerity to do it, especially ahead of an event because the last time we had an event, the stock went nowhere for 24 hours and it proceeded to go from 170 to about 260 over the course of a few months round trip. The entire thing. Valuation is still a concern in the crosshairs of this whole China thing. A strapped consumer, I mean, and valuation it all to me adds up to a legitimate downgrade of a name that could trade 170 very easily.
- [23:48]
Melissa Lee
This is more expensive than Facebook.
- [23:50]
Carter Worth
Yeah. You know, but it's also defensive, right? So you think about it. You know, we've talked about iPhones. Are they discretionary? Are they a staple? Well, they're staple, but people aren't upgrading them nearly as frequently as they had been in the past Right. And there's not a reason to do so unless your screen gets cracked or your battery sucks stocks or something like that. I think the expectations into last year's WWC were very high for all intents and purposes. And at that moment they kind of hit them. Or at least the sentiment was the stock closed at 193 that day. Guys talking about the day of WWE, a lot of people are really excited about. They needed something to believe in that there was another leg that was going to cause this upgrade cycle. Now you say the expectations are really low. Right. But there's nothing that's going to come out. I mean the most exciting thing is possibly just this software developers kit and they're going to work on small models that Apple has in place. So I think you got to push out your expectations for a big upgrade cycle. It's probably like a 2026 thing.
- [24:45]
Gaia Dani
I mean, at the end of the day, in the business of picking stocks or any risk asset, alpha is your relative result. Right. And Apple's relative performance to The S&P 500. All other choices. Right. Was in June of 2023. That's two years ago. And relative to the tech sector, other comparable stocks. It's September of 2022, almost three years ago. This chart depicts it. It has just been a bad place to be based on other choices that could have been made.
- [25:15]
Dan Nathan
I appreciate that and I like the fact that the stock has been taken down ahead of wwdc. I can't sell. I can't sell a stock at this point with a 2.35 billion installed base with a brand with cash flow with most negative China headwinds in the stock. I think the shorts have been on it. They've been accurate. But I think that story is a little long on the tooth. I'd rather be a buyer here.
- [25:40]
Melissa Lee
Let's play this out though. They have that strong install base. Are they selling more services?
- [25:44]
Dan Nathan
Yeah.
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Melissa Lee
Are they upgrading more phones?
- [25:46]
Dan Nathan
Yeah.
- [25:47]
Melissa Lee
Install base, that's. That's what I would go based because there is a phone to be had to be bought this year.
- [25:52]
Dan Nathan
Those are, those are all fair, fair points. I'm betting on the install base gobbling up more of their services. And when you really look at the name, a lot of that negativity has already been priced in the lag. Needham talks about a lag between now and where they should be with AI. With every passing day, that lag shrinks. Right. So you're playing that little bit long in the tooth and I think you probably should. If you're if you're short, you probably should have covered.
- [26:19]
Carter Worth
Well, it shrinks, but not really. So you're going to have to wait another year until WWDC when they update their new iOS and then you got to wait until September, October until they actually have a new device. And so that's one of the things that the longer this kind of lead time spreads out is the longer they don't have an upgrade cycle. So I just think there's a problem. Just last thing is like, yes, maybe developers are going to start building apps that will increase their services based on very small models. I mean you're going to be able to use an Apple like Perplexity to do a whole host of things on your iPhone and you can pay 20 bucks a month for that.
- [26:49]
Melissa Lee
Yeah, there's a lot more fast money to come. Here's what's coming up next.
- [26:54]
Eric Hersh
Doses and deals, the potential takeout targets in pharma and biotech and the names that could be scooping them up.
- [27:02]
Carter Worth
Plus, Tesla under pressure amid new concerns.
- [27:05]
Eric Hersh
Over its self driving ambitions. The latest risks with the technology and how it could impact the company's robo taxi rollout. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
- [27:27]
Melissa Lee
If your small business is booming, you.
- [27:29]
Jared Holz
Might say cha ching.
- [27:31]
Melissa Lee
But you should say like a good.
- [27:32]
Carter Worth
Neighbor, State Farm is there and we'll.
- [27:35]
Melissa Lee
Help your growing business. Like a good neighbor, State Farm is there.
- [27:41]
Eric Hersh
Are you still quoting 30 year old movies?
- [27:43]
Melissa Lee
Have you said cool beans in the past 90 days?
- [27:47]
Eric Hersh
Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past.
- [27:52]
Carter Worth
Discover is accepted at 99 of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back.
- [28:00]
Eric Hersh
Welcome to the now it pays to Discover.
- [28:03]
Carter Worth
Learn more@discover.com credit card based on the February 2024 Nelson Report.
- [28:11]
Melissa Lee
Welcome back to Fast Money. Biotech stocks moving higher in a relatively muted trading day. The XPI had been up more than a percent at session highs, closing well off those levels but notching a fifth straight session in the green. A string of recently announced deals seemingly improving sentiment in the space as big Pharma looks to replenish pipelines ahead of major drug patent expiration. So which company could be the next big takeout target? Let's ask Mizuho health care strategist Jared Holz. Jared, always great to have you. We've been reading about all these deals and earlier this week you Sent out this, this teaser of a note saying that there's a whole spreadsheet you guys have of takeout targets. So what is top on your list?
- [28:48]
Jared Holz
Well, I think there's. There are so many companies that can be acquired both in the public and private arena. And, you know, China's been a big source of deals this year. But for me, I go back to Insemed. I mean, this is one of the three we highlighted at the beginning of the year, along with Blueprint, which was acquired this week, and itci, which happened the second week of January. So this Enzymed is a, is a rare lung disease company. They, they deal with a bunch of pulmonary indications and I think they have another car to flip in terms of data. But once we see what that looks like, I think this is the next one of size to go. This could be a 20 billion or above transaction at some point.
- [29:32]
Melissa Lee
You mentioned the private companies. You mentioned the molecules that are being bought or partnered with in China. To what degree is all of that competition to these smaller publicly traded companies, biotech companies, being acquired?
- [29:47]
Jared Holz
Well, it's really significant. We really have not been in an environment like this really ever, in which the denominator of companies from privates to other regions such as China has been so abundant. I mean, typically we're looking at just the public domain of takeout names from a denominator standpoint. But now with China and now with so many privates, I mean, we really haven't seen a material slowdown in private equity and venture getting into the space. So it presents a lot of problems, not, not necessarily for pharma, because they have so many choices, but I think from. In terms of what we do, trying to navigate the sector.
- [30:31]
Steve Grasso
Jared, yesterday I think the FT reported that Merck potentially in talks with Moonlake Therapeutics, a name on your list. I don't know if that moves the needle for them because, you know, they're sort of in the stock market penalty box. But they have to do something. Thoughts on that?
- [30:46]
Jared Holz
Totally. They have to do something. This is a company that has been speculated in the past as a, as a takeover target. We're all waiting for phase three data. They have a drug that competes with UCB and Novartis to some degree. I would be shocked if the company were to be acquired before that data unless Merck had a very, very strong view and was willing to do it prior to. But this is probably a $2 billion, $3 billion asset at some point in terms of revenue. Is that big enough for Merck? Obviously not. They have to do a lot more, but it could be one in a string of deals that they do.
- [31:25]
Melissa Lee
Jared, always great to speak with you. Thank you.
- [31:28]
Jared Holz
Thanks so much.
- [31:29]
Melissa Lee
Jarrett Holz of Mizuho all right, so maybe the sentiment's improving in biotech. Is the chart improving? Carter?
- [31:35]
Gaia Dani
Well, so this was so out of favor obviously to the market and to health care. And now with Lilly slumping in some of the UNH, some of the big constituents in the S&P 500 healthcare sector, the relative performance in XPI is literally straight up. I think it can continue though.
- [31:51]
Melissa Lee
Interesting.
- [31:52]
Steve Grasso
I agree. I mean IBB we talked about, I mean it's, it had been horrible, but it's reversing and I think the reversal is, is legit. And I think you stay if you want to play the ETF game, IBB is the one to be in.
- [32:03]
Melissa Lee
Does this make you feel better about large cap pharma stocks in terms of, you know, if they're going to be willing to buy and improve their pipeline, in theory, that's better for them too.
- [32:12]
Dan Nathan
Yeah, and it should be. And if you look at a list of all of these patent cliff stocks, they're the ones that should in theory be out hunting for, for others to include in their pipelines. But all those names, all the large cap names are going to be the hunters. So we have to really look at the smaller names. But I invite everyone to Google search what the patent cliff means to a lot of these large cap farmer names.
- [32:33]
Melissa Lee
All right, we've got a news alert here on Shift for Payments. Julia Borson's got the details on this. Julia. Yes, that's right. Melissa Jarrett. Jared Isaacsman resigning as Shift for Payments CEO becoming Executive chairman. The new CEO is Taylor Laubert. This according to an SEC filing. Now for some context here, Isaacman had been picked by Trump to run NASA. Trump abruptly then pulled Isaac's been nominations in the wake of Elon Musk's departure from Doge. As Isaacman and Musk are close, he has been to space I believe two times on Space X rockets. So there was a question of whether Jared Isaacman would go back to being CEO of Shift4. We just found out he will not as he moves into this executive chairman role. Back over to you, Melissa. Julia, thank you Julie Warson. Coming up, a few fast movers catching our attention today. The headlines behind the drops in Dollar Tree CrowdStrike and Constellation Energy do not go anywhere. Fast Money is back in two. Missed a moment of fast.
- [33:30]
Eric Hersh
Catch us anytime on the go. Follow the Fast Fast Money podcast We're back right after this.
- [33:42]
Melissa Lee
Welcome back to FAST MONEY Stocks closing mix as investors digested soft payroll data and awaited more details on trade deals. The Dow snapping its four day winning streak. The S and P virtually flat. And the NASDAQ with a small gain of 3.10of a percent, its third positive session in a row. Shares of Dollar Tree dropping 8% after reporting results this morning. The discount retailer warning tariffs could result in a profit decline of up to 50% 5,0 in the current quarter. CrowdStrike meantime saying it has received information requests from the DOJ and SEC relating to the outage last summer that knocked millions of computers offline. Shares were already down on the back results last night when the company gave weak guidance. The stock though still up nearly 35% this year, shares a Constellation lower today. Citi downgrading the stock after its Meta Nuclear deal saying plant owners might not receive achieve that higher price premium for their electricity. Sig still up nearly 34% so far this year. And some after hours action here. PVH and 5 below topping EPS and revenue estimates. And MongoDB jumping after beating expectations on the top and bottom line, giving strong earnings guidance. You got to feel bad for Dollar Tree. It rose on the back of Dollar General. Gave that all back and then some today different company.
- [34:50]
Steve Grasso
I mean we specifically talked about Dollar General a of couple, couple of weeks. So we failed to mention for good reason. Dollar Tree Consulate. Constellation Energy is where I like to go quickly because last night we had a conversation about it. We had an analyst on and we collectively talked about the huge run the stock had had. It traded back to levels we saw in January and felt like that was the time to sort of sell the news and then you get the downgrade on the back. This story is not going away but I think continue to trade lower from here.
- [35:15]
Dan Nathan
You know Dollar Tree, Dollar General has always outperformed Dollar Tree by any, by any metrics over the course of a year, five years, 10 years. But I would think that if you get a positive trade headline, that stock's going to be the first one to pop. I mean it's very primed for that. Crowdstrike trades like a growth company. It doesn't trade like a profitable company because it's not. Eventually if they work on profitability, what.
- [35:39]
Melissa Lee
Does either CrowdStrike or CG look like?
- [35:42]
Gaia Dani
Well, I would say CrowdStrike was the one that had the most potential and it's even though it dropped on its earnings today, the the drop is minor, the damage is minor.
- [35:50]
Melissa Lee
Right. Dan, how about you you know, the.
- [35:52]
Carter Worth
CrowdStrike, you get DOJ requests for accounting stuff, how you're dealing with customers. I mean, you kind of get out of the way of that one. You know, it might not seem particularly that interesting, but you have a weak forward guidance, you have that sort of headline. It just doesn't seem particularly interesting, especially at 131 times earnings, 24 times sales this year.
- [36:09]
Melissa Lee
Yep. Coming up, is the robotaxi rollout in jeopardy? The safety concerns piling up over Tesla's self driving tech and how does it stack up against the competition from Waymo will debate that plus basketball and business. How four time NBA champion Stephon Curry is taking his magic from the court to the conference room. An inside look at his strategy when Fast Money returns. Welcome back to Fast Money. A new dashcam video obtained by Bloomberg revealing the moments before a pedestrian was struck and killed by a Tesla that was using the company's full self driving technology in November 2023. The video is hard to watch as you can imagine. So we're showing an image from the car's front camera. It's a sun glare as Tesla approaches the turn. The Tesla failed to brake for stop traffic hazard lights or a person waving it down. The vehicle killed a 71 year old grandmother on impact. The dashcam video release coming as Tesla gets ready to launch Robo Taxis in Austin, Texas next week. Shares dropping nearly 4% today. And this is, you know, the ongoing debate about the different kinds of technology being used by these self driving cars, whether it be Waymo or Tesla, and the different sort of lidar cameras, et cetera.
- [37:19]
Carter Worth
Well listen, that is obviously really sad and I think a human might have actually done the same thing behind that wheel. And it's important to also remember that 40,000 people or so die in car accidents a year in the United States. But there's a lot of emphasis put on this because it takes trust, it's going to be highly regulated sort of industry. And Tesla has not really demonstrated yet. If you think about the regulators, they're calling it supervised full self driving. So let's see how this thing goes. But Waymo on the other side, you know, they're actually seeing exponential growth, right. In 2023 they passed 1 million paid rise. In 2024 they passed 5 million. This year they're supposed to pass 20 million and they're expanding into other cities. And you talk about the difference in technology, I mean lidar, for all intents and purposes, Elon doesn't believe this is probably better technology. Waymo is getting an Advantage right now. And so again Tesla will catch up to it, but it's going to take a bit.
- [38:10]
Melissa Lee
Yeah. The difference in cost though between the technologies too is enormous in terms of how much a Waymo car costs versus how much a Tesla car costs because of that.
- [38:19]
Carter Worth
Yeah. But as they scale, the price is going to come down dramatically.
- [38:23]
Melissa Lee
Right now if you want to launch a Robotaxi fleet in Austin next week or whenever it is, you're gonna want the cheaper option though. I mean at this point, point in time, that's what you need to launch.
- [38:31]
Dan Nathan
Yeah, I mean these, these are just computers on wheels and it is sad. And you don't know. I've seen studies saying that the self drive is safer than a human and then I've seen humans are safer than self drive. So nobody knows. What I do know is that when I put my microphone on my Siri, it can't say the words. Now either I have a speech impediment or the technology is just not. Or the technology, you know, if they can't handle that, I'm not sure how they're going to get to where they have to go with self drive as quick as they want to get there.
- [39:02]
Steve Grasso
Swizzle ain't getting one of those cars. Number one. I mean, no, that I'm just saying I like being behind the wheel for a myriad of different reasons but just technically speaking, and we talked about this the prior all time high, I think for 88, the recent low to 20 something ish which we said was huge support. The recent run up got you to. And Carter can talk about this. Almost a textbook 50% retracement. It stopped where it should have. It should continue to pull back from here.
- [39:29]
Gaia Dani
I would agree. It had a big run off of its lows about seven weeks ago and take profits or sell calls if you're long.
- [39:36]
Melissa Lee
Yeah, I mean the other aspect to this whole story at least today is, you know, as Elon and President Trump have a growing rift between them. Remember how Tesla climbed and climbed and climbed right after the election on the notion that Elon Musk was very close to the President and that that would pave the way for regulations to. To be very friendly for EV adoption. Exactly. And self driving. And here we are. You know, if there is a question mark regarding the Elon Musk Trump love affair, relationship, whatever you want to call it at this point, that could be a problem.
- [40:07]
Carter Worth
Yeah, this is not good for cybertruck sales which are already not good because if you think about who are buying them. I mean listen this is going to blow up at some point. It's kind of interesting that Trump has actually showed a level of restraint right here. You know, I think he recognized the fact that this guy is a real billionaire, I mean, worth hundreds of billions of dollars. And you know, him threatening primaries of two people who might vote for this bill that is really important to this administration's agenda, I think sets up for a really interesting sort of battle here. And to guy's point, I mean, listen, Tesla's fundamentals are really bad. If those credits go away. I know there was a time where he said it's not a big deal. It's a big deal right now.
- [40:41]
Melissa Lee
Coming up, from buckets to business, how four time NBA champion Steph Curry is building an empire off the court and the strategy, partnerships and brands fueling his endeavors. That is next. And here's a sneak peek at the Kramer Cam. Jim is chatting exclusively with the CEO CrowdStrike on the back of earnings. I'll catch the full interview. Top of the hour and mad money, more fast money.
- [41:14]
Carter Worth
DF being a part of an ownership group and the right opportunity that allows me to have an impact on how a franchise should be operated. Run how you're, you know, going after true winning like we've done here with the warriors. That's, that's something I'm excited about pursuing. It's interesting you obviously, as an active player, you can't participate in that level until you're done. So you'll see me in a seat somewhere down the road.
- [41:47]
Melissa Lee
As a sneak peek of the latest CNBC sport documentary, Curry Inc. The Business of Stephen Curry. You can catch the full interview, full premiere I should say at 9:00pm Eastern tonight right here on CNBC. Our Alex Sherman spent plenty of time with the four time NBA champ to make this documentary happen. He joins us now with a closer look at the big business of basketball, basketball. It's amazing how thoughtful Steph Curry is in terms of where he wants to be. He's got so it's not just wanting to be part of an ownership structure of a team, but he's got all sorts of businesses as well.
- [42:17]
J
There's a bunch of different facets to this, Melissa. You'll see if you stick around and watch the piece at 9pm the first half of the piece is really dedicated to 30 Inc. Which is the company that Steph is the CEO of. And it is a mini house of brands. It is a, it owns a bourbon company or co owns one called Gentleman's Cut. It owns Unanimous Media, which is Curry's media company, but it goes well beyond Steph Curry. They have about you know, 40 projects in the pipeline and some of them, Curry is the front of some of them. He produces. They own several sports leagues for kids. They own a marketing consultancy and they're looking to continue to grow this thing. So you know, they. And even potentially divest certain companies that I think they'd want to remain somewhat involved with. But look, they're trying to grow out a little mini business empire. And then on the side, which is what the clip you heard, Curry's also thinking about, all right, maybe I should get into team ownership, maybe I should get into broadcasting. Maybe I should play on the Senior PGA Tour when I turn 50. We talked about all of those things and he said he was open and seriously considering all of those different paths.
- [43:29]
Steve Grasso
Maybe you should buy a bigger boat that you guys were on because.
- [43:31]
Eric Hersh
That's right.
- [43:34]
Steve Grasso
With that said, you know, sometimes too good to be true with a lot of these guys and gals. But you talked about it this morning. You said you looked for things on him. You talked to a lot of people trying to find some. Can't find anything wrong with the guy. He is what he is.
- [43:47]
J
Yeah, it's pretty amazing. I thought, I mean, yeah, I went into this being like I'm gonna get something, I'm gonna get something dirt on this or a dark side to him. And I tried and I spoke to Steve Kerr and I spoke to everybody worked business and his. Some of his ex teammates and I struck out every single time. And so I eventually just asked Curry himself, like, do you have any flaws? Like what are they? And that's the second half of the piece where it starts to get a little bit more candid and heavy and philosophical. And it's pretty much just a back and forth long form interview between the two of us where he talks about, you know, how do I stay present as a father and as a husband and continue to do this. He says he still has imposter syndrome at times and that there is a real weight to being Steph Curry. And he certainly embraces the adulation of his fans, but also realizes that he's got 65 people working for him and he can't always just say or do what he wants because there's a responsibility attached to that.
- [44:43]
Jared Holz
That.
- [44:44]
Melissa Lee
Such a fascinating story. Alex, thank you so much. Looks fantastic. And that boat is a little small. Catch a full.
- [44:51]
J
He just chartered it.
- [44:52]
Melissa Lee
It wasn't all right. Very documentary. Curry Inc. The Business of Steph Curry. Tonight, 9:00pm Eastern Pacific right here on CNBC. We've got breaking news on Circle, the stablecoin issuer just pricing its IPO today. Mikhail's got the details. Tana. Yeah, Melissa. Circle, the issuer of one of the biggest stablecoins in the world, has priced its IPO at $31 per share. So that is above the expected range of between $27 and $28. And that would give the company a total market value of about $6.8 billion. So they'll raise about $1.05 billion in the offering of 34 million shares. It's a measure of in a measure of enormous demand for the company. Circle actually increase the number of shares sold in the IPO from 32 million after the market closed today. So originally, Circle had sought to raise just $624 million by selling 24 million shares in a range of 24 to $26 per share. Back to you, Danaya. Thank you. Up next, final trades, final trade time.
- [46:02]
Dan Nathan
Steve, if you believe in Quantum, and Quantum is here. D wave is the way you play it.
- [46:07]
Gaia Dani
Carter Silver is poised to pop by. My work slv get you done.
- [46:13]
Carter Worth
Dan Seller, Boeing buyer. My mom, big fan. Her birthday today. M.J. nathan, birthday.
- [46:18]
Melissa Lee
Mrs. Nathan Guy, big fan of the.
- [46:20]
Steve Grasso
Show Agneco, Eagle Minds.
- [46:24]
Melissa Lee
Thanks for watching. Fast Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, 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 Courage.
- [47:11]
Megan Casella
I learned it from my adoptive mom.
- [47:13]
Melissa Lee
Hold my hand. You hold my hand. Learn about adopting a teen from foster care@adoptuskids.org you can't imagine the reward brought to you by Adopt US Kids, the US Department of Health and Human Services, and the AD Council.