Karen Feiderman (3:17)

Yeah, yeah, I agree with you that it seems somewhat overdone. It's a little bit like mini liberation day for these names. But I think that the unintended consequences are great. When you think about, all right, if we got a cap of 10 and we know we've had this sort of credit loss, who, where does that credit loss come from? That person's not going to be able to borrow anymore. The people who do pay back will be able to. That's not how these companies make their money. The revolving balances will go down. That's really where the sort of juice of the business is. I get the intent. I don't know how it would actually come to pass without significant legislative involvement. So I do think it's sort of overdone. I don't know what they, what they need to give up yet at the moment. I think let it play out clearly. It's a message that could resonate with voters. Whether you can implement that and how quickly, that's something else.

Dan Nathan (4:13)

Yeah, politics versus policy. We see it again and again. We've seen it towards a number of industries over the last just month and a half or so. I mean, the administration is really locked into this affordability issue that they were not taking particularly serious, I don't think last year and they seem to be taking it very serious now. Whether they can enact this stuff or not. I'll just say this though, man. These other bank CEOs must be very happy that JP Morgan's reporting first. And Jamie Dimon is going to get the first question about this, I think Wednesday morning. And you know, if there's anybody tomorrow. Yeah, well, there you go. Thank you. If there's anybody who can shoot it down. No, walk the line. I mean, really walk the line from, you know, a political standpoint as it relates to the administration, but also, you know.

Julie Beal (4:54)

Sure.

Dan Nathan (4:54)

Shareholders. Right. I mean, we saw the reaction here today. And then the other point is like, you know, we were saying this last week, pretty tough set up for banks the way that they've rallied into these results. So it was going to take much to get investors to kind of hit the sell button.

Melissa Lee (5:07)

Yeah. I mean, some of the big banks do have some exposure, but their portfolios are not quite the same portfolios as a synchrony financial.

Karen Feiderman (5:13)

Right.

Melissa Lee (5:14)

Or capital. Right.

Karen Feiderman (5:15)

But JPMorgan is the biggest credit card issuer in the United States.

Melissa Lee (5:17)

Right.

Karen Feiderman (5:18)

And so they have a big book, as does Citibank, which I think is bigger relative to them than for J.P. morgan's book. So that was why.

Melissa Lee (5:26)

Well, as would imagine, has a pretty well.

Karen Feiderman (5:27)

And bank of America.

Melissa Lee (5:28)

Yeah, as well. But Julie Beal, though, The moves in MasterCard and Visa seem to be interesting because they're not impacted by a cap, but they could be impacted by overall transaction volumes.

Julie Beal (5:39)

Yeah, I think that's right. The way to think about this is more that what they're really looking for is some kind of a press release that they can claim victory on. It was the same thing when Bill Pulte went after Fair Isaac and the credit bureaus to try to get something. And basically what they got was a nice press release, but nothing economically changed. And I think it will be the same situation here where you need to give the administration a nice little victory that they can tout when they're trying to talk about the impact they've had on affordability for the midterms. But I don't think there really needs to be anything that happens. If they really cared about interest rates, they wouldn't have dismantled the cfpb. Right. That is the place where there is the more extreme examples of people being taken advantage of. And that's what really needs to be regulated. The interest rates themselves are governed by whether or not you're a good credit. Like I'm a terrible credit, obviously, and like I should pay a higher interest rate. And it just that that's just how it's supposed to work. Trying to intervene and you know, put an artificial cap on it makes no sense.

Melissa Lee (6:39)

Yeah. You know, to Julie's point on the cfpb, they were trying to limit the late fees. Right. That was sort of one of the great causes of the CFPB before it got dismantled. So it's interesting where he's going after here. But in terms of the afford, this seems to be the through line right now, at least in terms of which industries to sort of target. So if you think along those lines, do you think about the next one? I mean, is it like car insurance and house insurance? I mean like all these things that cost so much money right now?

Guy Adami (7:08)

Well, I mean if you look at the GDP print, which we all have, I mean the biggest component of it, the reason why GDP was, it was in large, in large part is because of health care. So yeah, I mean all these things, you know, affordability is absolutely a thing you can hide behind, getting credit card rates, lowering, those things. But the reality is people are feeling the pinch. And it's an inflation problem which again predates this administration. It goes back a lot longer than that. So they inherited something but they haven't done anything to fix it. Inflation is a problem. We'll have a Fed conversation. But it's also one of the reasons why I think 10 year yields are going to remain stubbornly high.

Dan Nathan (7:44)

Yeah. If you're wondering why, if they're serious about it, I mean, we had a government shutdown over health care subsidies. Right. And it lasted for about a month and it didn't seem like the administration had a care in the world. About 20 million Americans potentially losing health care or paying a lot more to get health care.

Guy Adami (8:00)

Right.

Dan Nathan (8:00)

And so if you think about that, I think they know that they kind of missed out. They could have done a one year extension. It would have been hard. And you know, the result on a lot of these health care companies is really hard to tell. I mean, we've been kind of parsing this out. So if you think of all the industries, they started out with, big tech, Right. They're trying to bring semi manufacturing back here. Very noble. I mean all of these causes seem about right, but if you're trying to implement them, then you'd be running on a socialist platform. I mean this sounds like Zoram Mamdani who just got elected here in New York. So there is a sense of irony about this. It's also worth noting that the President Mandani had, they had a really nice meeting in the White House about a month ago. Maybe he got his ideas from there, I don't know.

Karen Feiderman (8:39)

So the health Care part. I understand exactly what you're saying on the insurance but if they want to point to something, it's look what we did for drug prices. Right. Look what we did for Novo Nordisk, $149 now. Right. So they do have things that they on that if you follow through that line of what's important to people, I mean, that's one to point to. But I don't know, we'll see where, you know, we have a short memory and we'll see when the midterm elections come that I don't know what, what of this we're going to remember if this credit card thing will really be a thing or I don't, I don't know. I feel like this one is going to be more fleeting.

Melissa Lee (9:18)

Well, today's move in financials comes ahead of the kickoff of bank earnings season. RBC Capital Markets top bank analyst sees today's weakness as a buying opportunity. George Cassidy is a firm's global financials research co head. He is rated 4.98 stars out of five no ranks. That's quite high. Gerard, congratulations. I mean, I don't know where the.02 went but you know, that's what my dad would have asked me in terms.

Gerard Cassidy (9:41)

Of guy must have voted for me. So thank you.

Melissa Lee (9:45)

In terms of the move today, how, how do you view this credit card rate cap proposal and the impact on some of the larger banks that have credit card portfolios?

Gerard Cassidy (9:57)

I think you guys have discussed it well and Karen pointed out about the legislative part of this. The executive order is not going to force any of the banks to lower their rates to 10%. Either has to come legislatively like the 2009 Credit Card act or it could come through the regulators where they codify some regulations. But both of those takes time and we don't expect either of them to happen. So we think that this is a buying opportunity. We think it is done for political purposes. You guys touched on it with, you know, the cost of living and the cost of purchasing different items, whether it's health care or groceries, etc. So this is a way of the president obviously trying to get out there and try to show folks that he's trying to help them out with the cost of living. But once again, we don't expect it to follow through. And as it is a good buying opportunity. And to your point, the commercial banks, the big banks have some exposure, but it's the credit card companies that you guys talked about have a much greater exposure.

Melissa Lee (10:58)

But this doesn't muck up the narrative of deregulation in your view, Gerard, I mean the administration's friendliness toward the banking industry and that being the tailwind, a major tailwind to the bank story last year as well as this year, it doesn't change that at all. It doesn't make you a little bit concerned that maybe there's too much of that in the, in the prices?

Gerard Cassidy (11:17)

No, not at all. I'm glad you brought that up because this administration has done an incredible job of focusing in on deregulation. Treasury Secretary Bessen in February of last year was very clear that they were going to loosen the corset of bank regulation around the banks and they've done that very well. The big one to come of course is the Basel free endgame changes that we expect this quarter. So this actually flies in the ointment of that deregulation trend. But we do not see that changing and especially since the Treasury Secretary wasn't behind this, that would have given me more concern if he came out and said something like this. But again we think it was more for political purposes for the President.

Karen Feiderman (11:58)

Gerard is. Karen, thanks for being on so long. Banks, JP Morgan City, bigger positions. For me, everything's going right now, right? We have deregulation and we have GDP is pretty good, Credit quality is good, asset wealth management is good, capital markets is good, M and A, all of that. Does that scare you at all that it's all so good? What, what could go wrong?

Gerard Cassidy (12:22)

Karen, I'm going to take you to the racetrack. You read my mind. What I really worry about is there's nothing to worry about. That's the worry. And so to us you said it well and I would say that, you know the steepening yield curve we've been pointing out to investors, it's been 20 years that the Fed funds rate has been at around 3% with a positive slope of 75, 200 basis points. If we get that environment for an extended period of time, lenders net interest income will grow very nicely. And I don't know if you guys have been watching the loan reports on Friday. That's the report from the Fed at the beginning of the year the report was showing industry loan growth of 0 to 1%. Last Friday that number was 5 to 6%. So we're going into 26 with 5 to 6% loan growth, steeper yield curve, credit is benign, deregulation is behind us, the economy is healthy. And to your point Karen, it's, it's looking very positive which as bank people, you know, you get nervous when it's that positive, Gerard?

Guy Adami (13:27)

Derek Jeter, somebody did not vote for him to get in the hall of Fame, so he missed it by being unanimous by one vote. By the way, I did not not vote for you. I would have. So the 4 9, 8 is effectively a 5. US Bancorp is the name you mentioned. I think it made its all time high in 2022 trades, 11 times. Next year's numbers. You probably have 10% earnings growth. What's holding that stock back, if anything?

Gerard Cassidy (13:50)

It's a good question, guy. And I think the big holdback was the sentiment on the stock was very negative coming into 25. They had a surprise change with the CEO in February that kind of set it back. But more importantly, from a fundamental standpoint, the company has struggled with its expense growth. And this company, the hallmark of this company five, ten years ago was this low efficiency ratio and they lost sight of that. However, what has happened more recently is the operating leverage. That's revenue growth versus expense growth, which was negative coming into the year, has turned very positive in the third quarter and should be positive in the fourth quarter. If they put up two quarters in a row of strong positive operating leverage and give guidance for 26 for continued positive operating leverage, we think this could be the real winner because to your point, it was one of the biggest laggards last year of the regional banks.

Melissa Lee (14:47)

Gerard, great to see you. Gerard 4.98 City.

Gerard Cassidy (14:53)

Thank you.

Melissa Lee (14:54)

See you next time. Julie Bielhattan, are you also worried that things are so good for banks that something will ruin that?

Julie Beal (15:03)

Yeah, absolutely. I think that's the one thing that I hate the most, is when there's real consensus around anything, that usually means it's time for a change. It's really hard to guess what it would be. It could be something where, you know, regulation starts to change against their favor. If, you know, Trump continues to take a more socialist Elizabeth Warren, dare I say, stance. But I think that broadly speaking, the fundamentals look pretty solid underneath them. It's a function of can this economy continue the way that it's going? And is credit as buttoned up as we all hope it is? You know, I think relatively okay, yeah.

Dan Nathan (15:36)

Going back, I think about a month or so, the CFO of JP Morgan was speaking at a conference and she I mean, the expense growth that they talked about from like 100 billion in 2025 to 105 billion in 2026 sent the stock down like 5% in a straight line. Now, obviously, the stocks rebounded and made new highs. It'll be Interesting to see how investors react to that because we just heard, George, what Gerard said about operating leverage. And so, you know, maybe that was an opportunity to get some of that stuff out of the way for some of their peers and the like. So that's what's interesting to me. And then really, what I think some investors might say, where are the productivity gains coming from? A lot of these banks are not looking to hire a whole heck of a lot of people this year. So again, higher expenses might be in technology, but they might have less of an expense as it relates to, you know, human capital.

Karen Feiderman (16:23)

Well, I think higher expenses go along, though, with some compensation when you have more deal flow and things like that. But you did say something that same day that I agreed with, which is why I remember it so clearly, because it was something that I agreed with, which was, why not? If you're Jamie Dimon or Marianne Lake or whoever's going to do the call, why not be a little tempered in your enthusiasm? Why not? What do you give up by doing that? No, that was your point, and I thought it was a good one.

Dan Nathan (16:48)

Yeah, there you go.

Guy Adami (16:50)

Me, too.

Melissa Lee (16:52)

Meantime, Alibaba shares jumping over 10% today for their best day since August. Reports that the company's Quinn suite of AI models has surpassed 700 million downloads in December, surpassing offerings from Matter and Open Air. The move taking other Chinese Internet stocks with it. Baidu, Tencent, JD.com all seeing some significant gains in acronyms past BABA was played a prominent role.

Karen Feiderman (17:15)

Karen, yours, your fake Ackerman. Had it not been, you know, a past tense, I would have done better, but it was a good one. Yeah.

Guy Adami (17:22)

Alibaba was the, I believe, the A in your carb, not the B. Yeah, that's right.

Karen Feiderman (17:26)

There you go. You look at that mind.

Guy Adami (17:27)

But is that playing by the rules in this year's anagram contest? I'm not quite sure. As you know, Melissa, it was the B in my tube. I think I'm playing correctly. And part of it, part of the reason I think Karen said it at the beginning of the year is because of the cloud business not being valued property. And now you see the. The stock move. I wish it had happened, obviously, on December 30th. It's happening today. With that said, I still think Alibaba goes higher.

Melissa Lee (17:50)

He has had a flurry of announcements from Nvidia last week. And also the notion that Alibaba can now have access potentially to the 200 chip from India is. Is positive, I would think, for a lot of the Chinese Internet.

Dan Nathan (18:00)

And it's not just cloud. Right. So it's that model. If you have that sort of downloads. I mean, people have been talking about OpenAI and the global growth there, you know, a billion almost monthly actives, I think, and Gemini is not far behind about 700 million. The fact that they could do this in, in such a short period of time, I just think that it's interesting to me that, you know, we're not placing probably enough emphasis or giving enough credit to some of these Chinese models because they are going to go for a digital belt and row. They are going with open source and obviously Metta has an open source model that no one's using. So I mean, at the end of the day, if Chachi Beatty and Gemini and these others, they want to keep it closed, they might lose the opportunity in places other than the US and China and I guess also in Eastern Europe.

Melissa Lee (18:44)

Yeah, Julie.

Julie Beal (18:45)

Yeah, no, I totally agree. I think we underplay the attention that we should be on the Chinese open weight models. I think they have the real potential to be very disruptive here on a better cost basis. And then the approach that they're using for AI is let's focus less on the general AI capabilities and make them more specific and more practicable in industrials and other applications. And I think that's the right approach because when you have a more narrow focus, it really enables the technology to do much better.

Melissa Lee (19:14)

Coming up, a red day for retail. Why names like Abercrombie and Urban Outfitters are sinking today and the other names getting caught in the sell off. That's next. Plus met his new hire. How a former Trump adviser could focus her attention as Mark Zuckerberg leans into the company's ambitions. Don't go anywhere. Fast money's back in tune.

Narrator/Commercial Voice (19:34)

This is Fast Money with Melissa Lee right here on cnbc. Comcast business helps retailers become seamlessly restocking frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become the patient scanning data, managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business. Powering possibilities restriction supply. You have a vision for your business. Your priority might be to expand facilities or bring in the best talent. At Sentree Insurance, we listen, learn and work to understand your business and your plans to help protect your new locations as your business evolves and your vision comes true. Sentry right by you. Property and casualty coverages are underwritten and safety services are provided by a member of the Sentry Insurance group, Stevens Point, Wisconsin. For a complaint complete listing of companies, visit century.com policies, coverages, benefits and discounts are not available on all state. See Policy for complete coverage. Details this episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts.

Melissa Lee (21:13)

Welcome back to Fast Money. A few retail names sinking after giving disappointing guidance for the holiday season. Abercrombie and Fitch dropping almost 18% its worst day since May of 2022. The company narrowed both its sales growth and earnings forecasts for the fourth quarter and Urban Outfitters shed 12% today after posting weaker than expected holiday sales growth. Other retail names Felon Sympathy Bath and Body Works, Victoria's Secret, Best Buy, Warby Parker, Macy's also ending the day in the red. Are you worried about Holiday overall?

Karen Feiderman (21:42)

No, not really. I mean of these names and f I do own so I think the reaction to earnings on December 5th or 6th, whenever it was the stock went from 66 to last like 130. So that was overdone to the downside to the upside. This I think is overdone to the downside. They actually narrowed the range. It didn't even change very much. Clearly there were whisper numbers or the expectation that something would be better than this. But this company now trades at 10 times with a pristine balance sheet and you know, buybacks in place. I like the management team. I think this is really an overreaction to the downside that you know, I got to wait the three day rule. Having not done a great job last year buying Abercrombie, it came down at a similar type of conference where they put this out and the stock got hit really hard. But this seems overdone to me.

Guy Adami (22:31)

Urban is, I mean it doubled since the April low. So I think people are just looking for an excuse to sell it because it weren't disastrous comps, it just weren't good enough. And you see this move. But to Karen's point about the three day rule, I'll give you the three day rule. But if this trades 68 which is within sort of earshot of that's the level to get back in. That's a level of past resistance becomes Support?

Dan Nathan (22:52)

Yeah, I think these kids, they can't get jobs and they don't have any money. I just don't understand how they're buying.

Melissa Lee (22:58)

To start paying back student.

Gerard Cassidy (22:59)

Right?

Dan Nathan (23:00)

No, it's just kind of interesting. I mean, this is a category, I'm kind of joking a little bit, but it's a difficult category I would think, you know, and again, like, we're going to see what margins are, see how much discounting we saw, you know, I mean, in the, in the quarter. But you also saw, you know, Best Buy did not trade particularly well. So maybe this is something we kind of figure out about a consumer that was strained going into holiday season and maybe just didn't spend as much as some folks thought they were.

Melissa Lee (23:23)

Julie?

Julie Beal (23:24)

Yeah, I think I actually am pretty concerned from the margin standpoint, particularly for urban. It doesn't look great. And I think the biggest concern we should all have is normally your holiday season is when you're doing better with your full price selling. And you know, in their commentary they talked about, well, look like, yes, margins are probably not great for the fourth quarter, but coming into the next year we're going to have more full price selling, we're going to be more productive at our stores and it's sort of like, yeah, this year I'm going to pick better stocks and my results are going to be better. It's like, okay, but how are you going to do that? Right? It's not a foregone conclusion that you're going to be able to have more full price selling. You obviously messed up on this quarter, so I would be a little bit more concerned. I think it's telling in terms of both the consumer especially because anthropology was the part that was weak, not the core urban outfitters.

Guy Adami (24:09)

Real quick, the flip side of that coin are these dollar stores, which I think we've done a decent job. Dollar General made a 52 week high today and it feels like even just valuation wise, it still has some room to the upside. And when I say room to the upside, I think the stock could trade about, I don't know, 156, which is another eight, nine dollars from here.

Melissa Lee (24:27)

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

Narrator/Commercial Voice (24:31)

Meta's new hire, how the addition of a former administration official could shape the company's priorities this year and where she could focus her efforts as Mark Zuckerberg powers into AI plus Trump's Powell probe. What the investigation means for Fed independence and how lawmakers are reacting to the president's continued attacks on the central bank chief. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this. Martha listens to her favorite band all the time in the car, gym, even sleeping. So when they finally went on tour, Martha bundled her flight and hotel on Expedia to see them live. She saved so much, she got a seat close enough to actually see and hear them, sort of. You were made to scream from the front row. We were made to quietly save you. More Expedia made to travel. Savings vary and subject to availability. Flight inclusive packages are at operations this episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Landsford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.

Melissa Lee (26:04)

When I need to impress someone with a gift, I go straight to 1-800-FLOWERS. There's a reason they've spent 50 years as the floral authority. Every stem is hand selected by a vetted florist and with same day delivery nationwide, 100% satisfaction guaranteed. That's why millions go to 1-800-Flowers to celebrate life's most important moments. Order now for up to 40% off. Don't miss out on this limited time offer. Act now and save up to 40% at 1-800-flowers.com sxm. That's 1-800-flowers. Com sxm. Welcome back to Fast Money, a new hire at Meta, the company naming former Trump Advisor Dina Powell McCormick as president and vice chair, where the company says she'll help guide strategy and execution. Meta also reportedly ready to cut jobs in its Reality Labs division. Julia Borson's more on all of this hey Julia.

Julia Boorstin (26:54)

Hey Melissa. Well, Meta plans to cut around 10% of employees in its Reality Labs division. That's the division that oversees virtual and augmented reality. This, according to a report in the New York Times. Now, Meta tells us no comment, but we have seen met a move away from its focus on the Metaverse as it shifts focus to AI Matter today announcing a new president and vice chair position for Dina Powell McCormick. The hiring aims to help help Mehta achieve its AI ambitions, which require massive physical infrastructure, data centers and financing. Sources familiar with the situation tell me that Powell McCormick's first focus will be crafting the company's long term infrastructure strategy including, including strategic capital partnerships. Powell McCormick is a former head of sovereign investment banking at Goldman Sachs CEO Mark Zuckerberg saying quote, she'll be involved in all of Met his work with a particular focus on partnering with governments and sovereigns to build, deploy, invest in and finance Meta's AI and infrastructure. Also today, Metta announcing Meta Compute the division's new leaders. Met as global head of engineering and former Safe Superintelligence CEO, will work with Powell McCormick on this top level initiative, as they call it, aiming to build tens of gigawatts of energy this decade.

Melissa Lee (28:11)

Melissa, should we extrapolate to think that this will go beyond the United States in terms of developing these partnerships?

Julia Boorstin (28:18)

I think absolutely. Just looking at the global reach of Dina Palmer Cormac's relationships, she seems incredibly well positioned to partner with sovereign wealth funds which have already been making big moves into the data center area to see where she can find partnerships to really help co finance. All of the infrastructure needs that Met is going to have to have to fuel its AI ambitions.

Melissa Lee (28:41)

All right, Julia, thank you. Julia Boorstin. Karen, how do you interpret this? I mean with the significant increase in spending for calendar year 2026, now you have Dina Powell McCormick deployed to actually help spend it and gather new funds. It seems like they're not going to back down from that spending target and if anything it could actually go higher.

Karen Feiderman (29:01)

Well, we hope it's not notably higher because that didn't work out last time. That was an expensive word. I mean, Dina Powell is quite, quite experienced in a lot of different things. She worked in W's White House. She worked in the Trump administration. The first time she worked at Goldman Sachs, I think she 10,000 women, she's, she's done a lot of things. To me, I would think she would be very helpful in navigating Meta's interactions with government, particularly this one. Right. And then also we know she's married to David McCormick, the senator from Pennsylvania. So she's uniquely positioned, I think and she was on the board prior to this. So this is an interesting hire.

Dan Nathan (29:46)

You know, it's interesting higher. After they spent hundreds of millions of dollars hiring engineers right away from a lot of their competitors that they lag behind in AI. And you know, if there is, I think it is about raising money from sovereign wealth. If you think the deal that they did for that Louisiana data center, they did not want that on their balance sheets, I'm sure they're going to have to go with some very, I don't know, creative ways to kind of get the Saudis or some of these other funds to help build this out. I think having a direct line into the Senate and a whole host of other folks in Washington, that should be just fine. Easy to do.

Guy Adami (30:19)

And so quickly, one more conduit to this current administration. I think that makes sense. And you know, Facebook reports, I want to say the first week of February, don't at me if I'm off, but you know, it has not made it all time high in August. It's sort of sideways to slightly lower since I think you're looking for a place to get long Facebook into that earnings release. And we're getting I think interestingly close to a level of pretty huge support.

Melissa Lee (30:41)

Coming up, a Powell probe, the impact of President Trump's criminal investigation to the Fed chair and how lawmakers are responding. The details on fast Money returns.

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Will Lewis (31:00)

We're back right after this.

Melissa Lee (31:09)

Welcome back to FAST money. Stocks climbing back from early losses. The dow down nearly 500 points at its lows before rallying and closing at a fresh record along with the S&P 500. The Nasdaq also jumping a quarter of a percent. Metals also hitting records. Gold and silver both settling at records yet again. Silver already up more than 20% in 2026. And Alphabet becoming the fourth company to hit the $4 trillion market cap milestone. The Google parent climbing to its own record after Apple announced it would use its Gemini AI to power Siri Nvidia is the only other company currently above 4 trillion. Apple and Microsoft have both hit that level, but have fallen below it. Meantime, three former Fed chairs and a host of lawmakers have spoken out against the Department of Justice launching an investigation into Jerome Powell. For more on the congressional response, let's bring in CNBC's Emily Wilkins with latest. Emily.

Emily Wilkins (31:59)

Hey, Melissa. Well, look, D.C. is really still grappling with the shockwaves that have come from the DOJ opening up in a criminal investigation into Powell and Powell. For his part, he's responded. He said that he doesn't believe that this is really about him providing false testimony to lawmakers. He says that it is about a pressure campaign to have the Fed do what the administration wants in terms of lowering interest rates. And Powell said in a letter last night night that the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president. Meanwhile, a number of Republican lawmakers have come out today saying that they do not believe that Powell is guilty and some have gone even further than that. Republican Senator Thom Tillis says that from now on, until this investigation is over, he will not be voting to advance any potential nominees to the Fed. And because of the map on that committee, that means that if Tillis is joining with all the Democrats against the nominee, they can successfully stonewall anyone from getting through to the Fed. At this point, you've had a number of other prominent lawmakers weighing in, including the head of the head of the panel that oversees the Fed in the House, French Hill. He said that this was an un unnecessary distraction and also said that it could undermine the administration's ability to make sound monetary policy decisions. We're, of course, hearing from more lawmakers as they return to D.C. tonight. The question is how is the White House going to respond from this revolt within their own party? Melissa?

Melissa Lee (33:36)

Emily, thank you. Emily wilkins, it's interesting. You know, when the story crossed last night, you saw sort of the commentary in the arc of this overnight. This morning you had concerns about Fed independence. But as more and more resistance came out throughout the day, whether it be from GOP lawmakers or from former Federal Reserve officials or former treasury officials, the market seemed to feel a little bit better about where we stand question, because.

Guy Adami (34:02)

If you had asked me, we play the game. If you told me this, where's the bond market, I would said TLT is down two handles, 10 year yields are north of four and a quarter percent. And obviously that didn't happen. With that said, I don't think this is positive for the bond market at all. Regardless of some of the rhetoric that's coming out in support of Jerome Powell. It speaks to what they want to happen and they don't necessarily want the Fed to be as autonomous as historically been. And I don't think that's a good thing. And again, it be careful what you wish for stuff because the bond market will absolutely challenge whomever is next in that seat.

Karen Feiderman (34:35)

I'm actually surprised more Republicans didn't come out because you know, that used to be party of fiscal restraint and kind of things like an independent Fed, things like that, monetary policy that is, you know, so that was a little bit surprising to me. But I think what you're, what you describe is what happened because if, you know, last night it was not looking this way at all. Gold still, though, gold had a very big day. That's not surprising given this.

Melissa Lee (35:03)

All right, coming up, the who's who of health care descending on San Francisco for the J.P. morgan Health Care Conference. InSMET CEO Will Lewis will join us on the ground with the latest in this company's rare disease portfolio and what to expect in the year ahead. More fast Money right after this. Welcome back to Fast Money, JP Morgan's annual health care conference kicking off in San Francisco today. The largest gathering of biotech and pharma execs, investors and analysts results in the United States. In SMED among the companies on today's presentation docket shares have soared over 150% in the past year with the rare disease drug maker reporting preliminary 2025 revenues of more than $606 million ahead of analysts estimates. Joining us for more is Insmed CEO Will Lewis. Well, great to see you again.

Will Lewis (35:50)

Great to be here.

Melissa Lee (35:51)

And you're actually about to present, I believe shortly. So you're joining us in advance of your presentation at JP Morgan. The stock is really, you know, rocking today because of your new milestone goals. Can you talk just a little bit about RK sales if I'm pronouncing that correctly, because you did raise that milestone. What, what is behind that better than expected sort of milestone goal that you have laid out today?

Will Lewis (36:17)

So we have actually two drugs on the market now. One is Ericase, which is for the treatment of refractory non tuberculosis mycobacteria lung disease. That's one lung disease. And the other is a drug called Brin Supri which targets non cystic fibrosis bronchiectasis. It's the latter drug that has really gathered all the attention because at the end of last week we put out preliminary fourth quarter numbers which showed that in that one quarter we had addressed more than 9,000 patients which results in a revenue generation of $144.6 million. To put that into context, that's more than Dupixent did in its fourth quarter in its first year of launch. So this is the beginning of a very strong launch for Brin Sopri and it was matched by the performance of Ericase, which exceeded our raised guidance in 2025.

Melissa Lee (37:03)

Interesting about both of these drugs with such strong launch is that there are other indications for which you're currently in studies to investigate. So for instance, Brin Suppri for hs, which is a skin disease, an error case as well for I believe another lung disease. Can you talk us through where you are there in and whether or not we will see any sort of applications to the FDA based on these other two indications?

Narrator/Commercial Voice (37:27)

Sure.

Will Lewis (37:28)

So the Ericase trial that's up and Running right now called the Encore trial will read out either March or April of this year. And if we are able to show success in that trial, it will take the total addressable market for Ericase from 30,000 patients to north of 200,000 patients. We've already guided this year that Eric case will do between $450 and $470 million of revenue. So that would obviously be very substantial expansion of that drug and its opportunity to help those patients. And to be clear, just like refractory Mac lung disease, this expanded or front line indication, there's nothing approved to treat either of those. That's matched by Brincupri, which is being very successful in its initial launch in bronchiectasis, but which is also going to be targeting the disease you refer to hydrating Supertiva or more simply put hs, the skin disease. We will have phase two data for that that will read out in the second quarter of this year. So some near term milestones ahead and those are coming on the heels of very successful commercial performance.

Guy Adami (38:25)

Well, congratulations. Obviously we surprise. Well, I shouldn't say that I'm sure you weren't surprised. I was surprised by the growth not only of overalls but international sales were staggering number. I mean is that opportunity as robust as as it appears through these numbers?

Will Lewis (38:40)

It is particularly in Japan where the team has done just an exceptional job. That performance was better than expected even as they raised their guidance throughout the year. And the exciting thing about that is it's still early in the launch in Japan we have we're now in our eighth year of launch in the US but Japan is just a couple of years in and so we're very excited about what they may be able to contribute in 2026 and beyond. Not just for Eracase but but also for Brent Supri, which we expect will have approval in Japan in the second half of the year and launch shortly thereafter.

Melissa Lee (39:12)

Now of course will the J.P. morgan Health Care conference is a lot is where a lot of deals get done on the sidelines. There are a lot of partnerships being discussed, inked, etc. You've got a lot of drugs that are already launched but will have bigger addressable markets potentially if all the studies go well. Do you have enough money on the balance sheet right now, which I believe is just under $2 billion or so, to see these drugs through a bigger launch, through bigger commercialization?

Will Lewis (39:40)

We do and I would say we have the opportunity to do even more not just within our own collection or pipeline as people like to refer to it, but also opportunistically through business development. And in the fourth quarter, we announced the acquisition of what we now call INS 1148, which is a monoclonal antibody targeting a very specific stem cell factor 2, 4, 8. We're going to be introducing that to pursue indications of moderate to severe asthma and also interstitial lung disease, which are both very substantial market opportunities for which there's a clear unmet medical need. So, beyond our internal pipeline, we're adding externally, and I think, as we like to say, this is just the beginning at insmed, because we have an awful lot going on on the commercial front, an awful lot to come on the clinical front. And we're still looking for more.

Melissa Lee (40:26)

Looking for more. But on your own, completely on your own, no partnerships, no acquisition. I mean, other than you acquiring.

Will Lewis (40:35)

Okay, that is correct. Our ambition is to continue to grow the company, and we've done that very successfully over the course of the last 18 months, as your show has presciently tracked. But we're just getting started from our point of view. And that begins with the success of Bryn Supri and also Erica's, but will hopefully follow with the success of the other indications they're pursuing, as well as our very broad pipeline, which is now arranged across three different therapeutic areas. So we are focused on respiratory, we're focused on inflammation, we're focused on neuro and rare. And in each of those, we have a substantial collection of assets that we think will be able to be successful. And we set as our target first or best in class in every disease we're going after. These go as far afield as Duchenne muscular dystrophy and als, for which we're using gene therapy all the way back to the compound I mentioned that we just acquired, which will first be targeting some substantial indications in the respiratory area.

Melissa Lee (41:30)

Will, it's always great to speak with you. Thank you.

Will Lewis (41:33)

It's my great pleasure.

Melissa Lee (41:36)

All right. So he's been steadfast in terms of going at it alone and expanding this pipeline. It's interesting to see the sort of the portfolio you have, drugs that are on the market, drugs where the indication is, you're looking for another indication for the drug that's already out there, and then also a pipeline of drugs for completely new indications.

Karen Feiderman (41:53)

It's just sort of interesting. Looking back just two years ago, the market cap of this company was four and a half billion dollars. It's nine times that now. You've been on this one for a long time, missy.

Melissa Lee (42:03)

Well, collectively and Especially nine.

Guy Adami (42:05)

Well, collectively we all have. And it could double from here. And we've said it. I'll use the example. I mean I think it was 2019. Bristol Myers bought Celgene, I think for 74 billion. That's six, seven years ago for $74 billion. This is a very similar type of situation. So listen, I get the, it's going to fluctuate over the next couple of weeks or something, but this is a stock that I do believe could double from current levels.

Melissa Lee (42:29)

There's a lot more from the J.P. morgan Health Care conference on Mad Money. Jim is chatting exclusively with the CEOs of Medtronic, Novo Nordisk, Bausch and Loam and Pfizer. You can catch the full interviews top of the hour on Mad Money. Up next, we are revealing the first two trader acronyms of 2026. Will Guy spell out a winner for a second year in a row or will Dan earn redemption after last year's photo finish? More fast money in two. Welcome back to Fast Money. It's that time of year. Our traders will be unveiling their 2026 acronyms all week long. They've been hard at work picking the they think will outperform guys too. He was of course our big winner last year, narrowly eking out a victory over Dan's Gen AI. So it's only fitting that we have them kick things off. So Guy, what is your acronym for 2026?

Guy Adami (43:22)

Well, obviously I've always been very proud of my tube, more so last year than any time in my 62 year history. But this year I'm unveiling my junk to the people of the United States. So let's just take a look at how this is comprised. The J. Jacobs solution Yield, Jacobs Engineering. This is sort of not necessarily a green play, but getting people up to speed in the 21st century in terms of retrofitting and stuff a lot in the life sciences. The stock has sold off pretty significantly since its all time high. I think you're getting at a very attractive level here in terms of valuation. In terms of stock price, number one, Unity software is the you and my junk. Melissa, I'm playing the game correctly. This sort of a gaming play that's fallen on some disfavor over the last few months. But valuation alone and the potential for M and A here could make it interesting. The end in my junk. And this is, I'm very proud of Novo Nordisk, which we're in the midst of a bearish to bullish reversal. I think we've Talked about this story for a while, but finally it's starting to show some signs of life. And I think this is one that could potentially be a 75 to 80% winner for me over this year. And then the K in my junk would be Ken View. And why? Because this whole Tylenol thing going to get washed away at some point. As Karen pointed out prior to the show. Some activists getting involved. I think you're getting it at a very attractive level. And a double in this name is not out of the realm of possibility. So I give you my junk.

Melissa Lee (44:47)

Mel, you present your junk and interesting components to your junk. Let's get to dan, who is second place last year. 2026 is what? Dan?

Dan Nathan (44:56)

Yeah, it's stash. That's s t A S. And what I'm doing here is a little bit. It's not names that have been absolutely disrupted by AI it's names that actually haven't really embraced it yet and integrated it into some of their products and services. And so to me, the first one would be Snap. And this is a company that's obviously been left for dead. Its products, you know, are still kind of well used. They just don't monetize that well. I think this year they probably have an AI moment. The next one is the trade desk. Now this is a name guy. We had the CEO walk up to the desk the day that this company went public. This is a ad tech company. It's absolutely gotten destroyed the stock here. So I think this is kind of interesting. I think they're going to do a better job with Adobe. Another one very similar to what I just kind of described here. And also this is one that has nothing to do with that theme. This is sweetgreen. It's just gotten absolutely destroyed. I think you probably have a double from here. And the Last one is HubSpot, much like the other ones. I said do a better job, integrate AI. So to me, that's my theme. Last year was Jenny. This year it's integrating AI into your existing products and services to stocks have been just smeared.

Melissa Lee (46:05)

All right, well, you know, tomorrow we'll get the acronyms from Karen and Tim. We'll see who plays by the rules and who doesn't care.

Karen Feiderman (46:12)

Okay, fine, fine.

Melissa Lee (46:14)

Up next, final trades, Final trade time. Julie Beal.

Julie Beal (46:26)

Man, I thought the J and Junk was gonna be me. Ollie's only retailer.

Melissa Lee (46:31)

I'm not worried about Karen.

Karen Feiderman (46:34)

Yes, A and F. I think this is overdone. But wait, wait, wait Three days.

Melissa Lee (46:38)

Dan.

Dan Nathan (46:39)

Yeah, the first S in my stash is snap. I'm go with Snap.

Guy Adami (46:43)

Okay A dollar general system. All right.

Melissa Lee (46:46)

Thank you for watching Fast Money. See you tomorrow here at 5. Mad Monu. Jim Kramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do.

Julie Beal (46:56)

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