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CNBC's "Fast Money"
Fast Money 9/24/25
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And now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease so the pillows will get delivered and everyone can sleep soundly, especially you. ATT 5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network.
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What does it mean to live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. EDWARD Jones Member, SIPC 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. Another investment in intel. The semi giant reportedly turning to Apple for its next team up. What it could mean for the stock and how Wall street is looking at the name now. And nearly $9 billion bears minority stake setting an eye popping valuation for Chicago's NFL team. The precedent it sets for future team sales. Plus all the details on Katie Holmes earnings. The guidance that sent shares of copper miner pre port macmoran sinking and driving higher. Shares of GM getting a boost thanks to a bullish call from Wall street by one analyst sees the stock revving up. I'm Melissa Lee, come to you live from studio Be at the nasdaq. On the desk tonight, Steve Rosso, Karen Feineman, Dan Nathan and Bono and Ice. And we start off with what could be another big investment in Intel. Bloomberg reporting the company is seeking funding from Apple to help its turnaround efforts. It would be just the latest in a string of cash infusions. Our Christina Parts and Evolis is here on set with details here. Christina, what do we know so far? This is a potential investment that could be seen as a comeback of sorts for Intel. And the reason I say that is because like you said, Bloomberg did put out this report just within the last 45 minutes or so saying that they are in the early stages. Nothing is confirmed yet. I did reach out to intel myself. They are not commenting. They're quite conservative when it comes to these types of Reports and headlines. But they did also say that there could be a partnership, but it would be limited at the moment. Nothing significant. And I'd like to point out too that Apple and Intel. Intel don't actually have a relationship right now. Apple creates its own silicon. And nonetheless, you did see a positive reaction in shares. Shares closed about 6% higher. But if they're signing on a new customer like Apple, you would expect the stock to jump even higher. Right. Even if it's just a headline. So we have to take this with a grain of salt that right now this is just a beginning of a conversation with a potential partner. And maybe we can just fast forward to just the part where we have all of these investors that are investing in. You have not. Just too long ago, Nvidia making a $5 billion investment, you had intel and now it's Intel's largest external shareholder. You had SoftBank at $2 billion, injecting it the White House, or I should say the administration at 8.9 billion. So a 10% stake. So you have all of these, I guess rescue squads. That's what I called it. Really representing validation maybe for Intel's turnaround at this moment. But it doesn't necessarily change the problem for intel, which is dealing with the losses at the foundry, the slowdown in the 18A advanced manufacturing processes. But nonetheless it's, I guess, seen as a positive with if Apple signs on or even just starts talking or invests.
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Right.
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B
It doesn't necessarily mean they need to start working together on actual product. It's just. But not working together on an actual product and asking for just money. Like, well, maybe they'll do something like Nvidia. Right. So Nvidia said that they're going to be working specifically on a PC product and a data center product. But then they had a press conference and everybody was asking, why didn't you commit to the Foundry business? Why aren't you building any Nvidia chips? Why aren't you even using Intel Foundry for packaging? Which is. I know, Karen, something you and I spoke to just offline. Intel could do packaging quite well as TSMC has backlogged. There's just not enough capacity for putting these chips all together. Intel could maybe step in on that. But no, Nvidia didn't. So what is Apple going to bring to this equation? Perhaps they'll announce some type of small partnership. But it's just. It's a rescue squad and it's not changing the underlying problems. But it's good and the stock people are liking it. Because the stock keeps climbing because it could signal good things to come. Right, Christina, thank you, Christina. Parts Nevilles. As Christina pointed out, the stock was already higher during the regular session and that was sort of eye raising. There wasn't any news. And so maybe this is the answer to that question there, Dan. It could be that Apple sees who the rescue squad is and said, you know, says to itself, let's get in line with the administration.
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Apple spent the last 20 years trying to get away from Intel. I mean, let's be really clear. And Cape Rush just said this. I mean, less than 1% of the revenue comes from Apple. So Apple has been designing all their own silicon. They've been, I think the only, like legacy sort of Qualcomm has like a modem in the iPhone and they've been trying to do that. So at the end of the day, it is curious, especially if it's not for Foundry. I mean, Apple does have. Most of their chips are made at Taiwan Semi, which is the case for most chips that are out there on the planet. So it's curious. The one thing I'll say about intel is that there are very few stocks in the S&P 500 with over $100 billion market cap that are as heated as much as this stock by Wall Street. I think there's only five buys. There's about four. Four holds in like eight or so cells. So when you think about that, this is really. I love the term rescue Squad because no one's investing in this company because of their technology or their IP or their manufacturing prowess. There's something else there, and I'm not really sure what it is. Yeah, and I'm with you. And I'm really curious what that something else is. I think what this does is essentially makes the pool a little bit murky. Are you investing in intel, partnering with intel because you actually have a strong conviction around what that ROI or ROIC will be or. Or is this a way with you, a way for you to align yourself with the administration? And I just think I'd be a bit ignorant.
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B
Maybe both.
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A
Okay, yeah, maybe both. But my point is that, like, I don't. I certainly don't have a clear answer. And given what we're seeing in the recent positioning, the recent announcement of the White House ownership, to me, a murky picture is not what I want as an investor. Now, with that said, I think this is all tailwinds as far as the narrative is concerned. If you look at the performance of the stock over the last two years, clearly like you want an American turnaround Phoenix from the Ashes story. And I'm not willing to get in front of that because I do think that momentum can be quite powerful. I just do want to spend some time saying that I believe the narrative at this point has somewhat disassociated itself from the actual fundamentals of the company.
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B
Yeah, I mean, I agree with everything you said. I think, you know, the cash infusions, that helps. They need it. They're losing money. Right. That's really important. So taking away some of that downside makes the calculus a little bit better. But there is this frenzy going on right now and just announcement of any kind of tie up, even with or without details, it seems like buy the stock and ask questions later. Which I'm really not comfortable with that, you know, in thinking about the response. What could go wrong? What could go wrong, you know, to the Nvidia OpenAI announcement of a likelihood of a deal, I guess you would call it expectation of a deal. I don't know. It just seems like the math is just starting to get out of whack, you know, I don't know if we'll touch on Alibaba later, talk about it now.
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You just did.
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Okay, so I mean, the response in the stock to this $53 billion of initial. First of all, I don't know if it's incremental or if that was always the spend. Let's just say it's somewhat incremental. The reaction in the stock of, you know, $29 billion of market cap improvement for that is. Seems like a lot. And I like Alibaba. You know, it's fun when it goes up, but I feel like things are getting a little bit out of control. That having been said, I am taking some money off the table either through put spreads or looking for other things to hedge what feels like a very frothy environment.
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I bought intel on the new CEO and then three life preservers or rescue squads later, I sold 25% of the position. I think we can make it to mid 30s. But it's had an incredible move. This was a $50 stock back in December 2023. If it retraces half of it, it's 35. I'm going to sell the other 25 there. If it doesn't and it breaks down, I'll just liquidate the position.
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B
I get your points completely in terms of all the narratives and the question marks, but at the same time, you also have the juice potentially of a new CEO. A new CEO that is committed has been brought on to make the story work. So that plus the life preservers. Doesn't that change us? If it were Pat Gelsinger, still the old CEO with these life preservers, I would agree that the narrative has not changed at all. Maybe when it got. It's a little bit true.
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He was a technologist. I mean these were people that were meant to do this every step of the way. I think they've had five CEOs in the last 20 years or something like that. These are not like chumps, you know what I mean? These are people meant to do this to actually figure out what's coming next, execute on that roadmap. And you know, all the way along, I mean AMD was eating their lunch, you know, obviously Nvidia and GPUs. So listen, these guys all see something. I'm just some dumb guy sits on his desk, you know what I mean? I'm looking at this thing and like they're all seeing something about buying it. But you know, all of these equity infusions, they're all dilutive to equity shareholders, you know what I mean? So it doesn't mean that this is a great investment if you're buying the stock right here. If you are a strategic buyer like an Nvidia or an Apple, there might be dividends that are paid that have nothing to do with the price appreciating one way or another. And the other thing, I'll just say about the Alibaba, it is curious you just mentioned that it got this market cap appreciation based on a Capex number that they threw out there. We had seen that in the hyperscalers going back the last couple of years. Now we start to see it with those sorts of revenue guides that we're seeing like out of Oracle the last few weeks or so. So it's a little curious. I'd rather a stock go up because of revenue guide than a Capex guy. This is way, you know, the returns on that, who knows when that's going to materialize.
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B
At the same time, the appreciation Alibaba you may be able to justify a little bit more because the valuation Alibaba is much lower. Correct. Than say Oracle or any of these other companies that have announced something and then, you know, got rewarded for it. Even with the extraordinary run of Alibaba, I think probably maybe the multiples move to like 17 times earnings, right? Yeah, yeah. After you take out the cash.
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Yeah. And then you still have some of the friction around the hopper 20 and whether that's going to be accepted in China. So I just, I think that there are tangible things that you can point to in terms of Alibaba. I hear you in terms of 50 some odd billion translating to an increase in market cap of 30 billion overnight. Yes, that's pretty incredible. But I can at least wrap my mind around the narrative about how you get there when it comes to Intel. The fact that the CEO has essentially just re explored the 18A process like undoing what was a poor investment to me is differentiated from a new winning strategy and I've yet to understand what that is. Clearly they've been able to kind of rally the troops and get this, this investment into a US domiciled company. But, but aside from that, I don't know what the deliverables are.
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All right. We mentioned Alibaba earlier. Shares jumping to four year highs after the Chinese tech giant unveiled its latest model. Said it would invest even more into artificial intelligence than it already planned to. Our Eunice Yun is in Beijing with all the details. Eunice. Thanks, Mel. Well, Alibaba CEO told a developer conference that spending on air infrastructure would exceed $53 billion plan over three years. The cloud unit would open data centers in Brazil, France, the Netherlands in 2026. And the company unveiled an updated large language model. Now this bullish outlook emboldened tech analysts to see Alibaba potentially as a serious competitor to the likes of Google and Microsoft. There could though be other reasons for this stock has been moving so much. One is that the state stock paper, the securities Daily recently headlined an article that said that the Alibaba stock rally epitomizes the strength of China tech. That was essentially encouraging a lot of Chinese investors to take the government's cues and buy into the stock. And then ARK CEO Cathie Wood had bought into Baba as well for the first time in, in four years. Another potential factor that Capital Economics, the research firm pointed out, was the ramping up of the national AI plus initiative. So this is essentially getting AI into everything. So it's AI plus manufacturing, AI plus health care. And so Capital Economics said we suspect there is more upside for MSCI's tech heavy China index as a country's own AI plus plan gets going, guys. And of course, you know, there's the question of the chips that they're not probably going to come as much from India anymore. And so it is coming from Inter. Alibaba created chips, internal chips. Yeah, well that's what Alibaba says. But although Alibaba has also expressed an interest to maintain its relationship with Nvidia but that is seen as one key weakness for China's AI industry, that they don't necessarily have the chips, so then they wouldn't have the computing power. And another weakness is that a lot of people here believe that the Chinese AI industry doesn't have a lot of resources when it comes to financing. So even though the government has this big initiative that it wants to run, the local governments are kind of broke. And also private money and capital has been beaten down for so many years because of all the regulatory crackdown. So there's been kind of a reluctance on the part of VCs as well as private capital to infuse their money in a lot of different things such as AI. So that's another big factor that people have discussed as a key weakness for China's AI industry. All right, Eunice, great to see you as always. Thank you. Eunice Yun, live from Beijing for us. Let's get more on the potential investment in intel and I alibaba with Susquehanna's Chris Roland. Chris, great to have you with us on a day when there's just so much chip related news in the air. I first want to get your take on on this Bloomberg report that intel has approached Apple for some sort of an investment. The stock was up curiously during the session. Outsized gains relative to peers. What do you make of this report?
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Yeah, I think it does make sense on the surface. You know, our, our, our take right now is Intel's on a roll. Trump is behind him, of course, with that $20 intel investment for the U.S. taxpayer. You know, they've added a bunch of guys here, Softbank, obviously Nvidia as well. And really Apple still probably owes Trump something for removing iPhones from tariffs. And so this could be in some ways a bit of a payback. Intel right now is also desperate to get themselves a 14A foundry customer. And so that would presumably be linked with that investment. Hey, so Chris, the whole notion of like state capitalism where the administration is taking stakes in strategically important companies, might you see something in like an AMD for instance? You know, AMD is obviously trying to take market share from Nvidia and the whole idea of having second sources or multiple producers of this technology make some sense. Are you expecting, you know, possibly any other investments by the Treasury? I am not expecting an investment in amd. I think this is more about kind of boots on the ground, Capex, actual manufacturing brought back to the United States. And AMD is fabulous. But there could be some manufacturing sites and related companies that the US could invest in particularly if there was a strong need. TI could be one of those companies. Although I think TI is reluctant. Wolfspeed needs some money in order to continue their silicon carbide ambitions. You might see something there. But, but, but other than that, I think it has to be manufacturing based.
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Is this enough of a narrative, Chris, to be constructive on intel, that there's a new CEO on board, that they are able to string together all these cash infusions from various parties that the Trump administration seems to have a hand, at least on the surface in arranging these extra lifelines to be there? I mean, is that enough?
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I don't know if it's enough. I think cash is good, particularly when you have these manufacturing ambitions. You need cash, but I don't know if it's enough. What they really need is a bona fide large foundry customer and not just a one off chip, you know, a few hundred thousand. We're talking about millions of units and a roadmap that extends through probably 20, 30. That's what intel needs. And if they can share the costs of this manufacturing with their foundry customers, they might have a chance here.
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Chris, it's Karen. Thanks for being on. Can we talk about in video for a minute? A lot of news lately, all kinds of things. Where do you think the stock is? How do you think the stock is priced given all the news?
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Yeah, I think it's priced, I think, I think there is a little bit more upside we could see in Nvidia. Obviously there's a ton of pushback right now about some of the circularity in the deal between OpenAI, Nvidia, Oracle, vendor supplied financing is not, usually, does not, is not a game that usually ends well. But the flip side of that coin is that the numbers that we are seeing, the projections that we are seeing are upsized, they are larger than we were anticipating and there are more to come as well. It's not just about OpenAI. There are some other really big guys out there.
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Sorry to interrupt. Chris, the numbers that you are seeing in terms of the potential deals that have yet to be announced but are announced prematurely. I mean, I'm just trying to understand, you know, because a lot of this is sort of is 10, I mean specifically for Nvidia and OpenAI, this is like the precursor of a deal because the details have not yet been finalized. We hear all these announcements. We don't really know the deployment of this capital or the cadence of the deployment of this capital. And so therefore, you know, as an analyst, how do you put that into your model.
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Sure some of the details are missing. You can back into using some basic assumptions, roughly what we're talking about here. So we think this is a $300 billion deal for Nvidia, but there are more to come as well. There's sovereign AI, there are other startups. Whether they will be on Nvidia platforms or not, it's unclear. There is clearly a growing ASIC movement. TPU right now from Google is gaining a lot of momentum. We also have a bunch of other kind of startup infrastructure movements like Mtia from Meta and alluded to earlier, the Chinese contingent which now looks to be in country.
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Chris, always great to get your perspective. Appreciate it.
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Thanks Melissa.
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Chris Rowland of Susquehanna Just quickly Steve, where do you stand on any of this? Nvidia?
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Yeah, I do think that Capex is unsustainable. You can't continue to spend and they have it going out into eternity the way that they're spending money right now. And I just think that that's something that we all have to come to grips with, that these seven companies or even 10 companies or 15 aren't going to be the only ones who benefit. We have to start broadening out that surge.
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Coming up, details behind Copper's rise and Freeport Macarons drop in the weak guidance weighing on that name. But first, some after hours action results from KB Homes latest quarter when fast money returns.
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For 140 years MultiCare has been in Washington prioritizing long term solutions, partnering with.
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Local communities and expanding access to care.
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Together we're building a healthier future. Learn more@mycare.org and now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly. Especially you. AT&T 5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network I'm no tech genius, but I knew if I wanted my business to crush it, I needed a website. Now thankfully, Bluehost made it easy. Customized, optimized and monetized everything exactly how I wanted with AI. In minutes my site was up. I couldn't believe it. The search engine tools even helped me get more site visitors. Whatever your passion project is, you can set it up with Bluehost with their 30 day money back guarantee. What have you got to lose? Head to bluehost.com to start now.
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Welcome back to Fast Money Earnings alert on KB Home. The homebuilder is just down fractionally after reporting earnings and revenues that beat Wall street estimates. Deliveries also slightly higher than expected for the quarter. The company though did lower its estimates for the full year. Housing revenues down to 6.1 to 6.2 billion from a prior guide of 6.3 to 6 and a half billion. So not too much reaction here. We also got some other data in home, in the home sector in terms of new home sales which were up 20% was a massive increase there. Yes. Although apparently it's somewhat of a noisy figure. I mean, so KB Homes, a couple of little dings, you know, average selling price a little bit light, backlog a little bit down, nothing terrible. I mean the sort of narrative around the homebuilders has been difficult. Right. Some of the tariff things have really hit them. Some of them may be hard to get some of the labor they need. So I have exposure to this space primarily through Home Depot and Lowe's and Zillow and Zillow. This week hasn't been the right place to be. But I'm sticking with those other two. Not a bad report though. Yeah. Yeah. Diana. Today Diana Oleg was saying mortgage rate 30 or more fixed mortgage rates are back up to 6.37%. So that still is a hefty lift in terms of the buy down of the rate by the homebuilders.
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You need these rates to drop to the middle fives. If they drop to the middle fives, then the lift that the homebuilders have to do is a lot less.
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Yeah.
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So but if rates are going down, I think you buy all of them. Dr. Horton has been the one that's outperformed. But if you go with a Pulte or KB or the industry leader Lennar, I agree with you. DHA is always interesting just because it has a scale. I think if you want a bit more nuanced approach, KB Homes does offer some value here. For one, it typically trades at somewhat of a discounted PE and price to book than the group. They also haven't had the same spec house building that you've seen some of the other players. So perhaps to Steve's point, if you start to see rates come down and they're able to lower that promotional value, I would expect it to have more of an incremental effect on their margins vis a Vis some of the other partners.
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Yeah. There's another reason why rates might come down though. That might be the labor market. Right. Which would be a terrible thing for this sector.
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It wouldn't be good for housing. You know one thing I was the stocks have run in front of the rate cuts. Right. So we had a high in the 30 year, I think about two years ago. Fixed mortgage at like 7.1%. So here we are, let's call it 6.4%. I mean if we don't see yields come down meaningfully or rates for the right reasons, that's going to keep the housing market kind of stuck. But you look at the three month average and you look at this big new home sales being, you say that's pretty good. You know what I mean? So I mean maybe they're getting a bit more aggressive. That's why we're seeing these earnings misses and the like here. So it doesn't seem like, you know, this is an easy one from here. I just think they kind of run far fast in front of this and we start having hawkish cuts the next two. I just don't see this group acting particularly well.
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Are you worried at all in terms of consumer discretionary spending and the pressure it might feel from a weakening labor market on a Home Depot and a Lowe's or is it more defensive? I think of it as more defensive. I also think, I mean the projects will get done as long as well, the employment ping is key, critical of course, but I don't know. I also think the valuation, particularly for Lowe's is not demanding as Guy would say.
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And if rates come down, you get home equity loans which helps people to make the purchases. So it's not a one to one with homebuilders or it's if rates come down, you could see those hard items like dishwashers and dryers be purchased more.
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And, and getting that inventory that's been stuck. Those are Home Depot customers. Doesn't need to be a new build for someone to buy a new home and start to spend money. There's a lot more fast money to come. Here's what's coming up next.
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A mining meltdown. Freeport McMorin forced to halt operations in Asia after a deadly mudslide. The details from the accident and the impact on copper prices next. Plus the next move for markets as major indexes pull back from record highs. What one top strategist sees in store for stock after Fed chair Jerome Powell raised a red flag on valuation. You're watching Fast Money live from The NASDAQ market site in Times Square. We're back right after this. And now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, luckily, AT&T5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. ATT 5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network I'm no tech genius, but I knew if I wanted my business to crush it, I needed a website. Now, thankfully, bluehost made it easy. I customized, optimized and monetized everything exactly how I wanted with AI. In minutes, my site was up. I couldn't believe it. The search engine tools even helped me get more site visitors. Whatever your passion project is, you can set it up with Bluehost with their 30 day money back guarantee. What have you got to lose? Head to bluehost.com to start now.
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B
Welcome back to FAST Money. Shares of Freeport McMorran dropping 17% today, the worst one day move since the start of the pandemic. The company cutting its outlook for gold and copper sales after a mudslide halted all operations at a critical Indonesian mine earlier this month, killing at least two workers there. That news sending copper futures higher by more than 3%, hitting its highest level since June 30. This is part though of, you know, aside from today, an overall bid for metals across the board. Gold, most, you know, specifically silver also, but also some copper showing signs of.
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Copper on revenue basis, it's 63% of Freeport's revenue and 50% is gold. And then the rest, you get a lot of assorted little stuff. They're terrible news, terrible headline. But I would still be a buyer. I still own the stock. I've trimmed a little bit, but I would still be a buyer. On this discount. Yeah, first and foremost, again, we want to kind of acknowledge a loss of life that's clearly like the most important issue here. But in terms of kind of like part and parceling out the trading opportunities, I'm with Steve. It's something that I'd monitor. I'd probably add it to my, to my shopping list. But I want more clarity on how long these delays or pause are going to be and whether or not this might kind of be incentive. An incentive for there to be some type of investigation or re overhauling of safety protocols or things of that nature. I think that could add a little bit more murkiness and perhaps make this much more a much more protracted process. And to me that's the real risk here.
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B
Yeah, gold miners, gold all catchy but I know that that's not where you normally traffic carrying but in terms of the data center build out in the grid build out that has to accompany a data center build out. You have copper, you have aluminum, all of these other industrial metals that are needed to back that and you saw you know taking that much offline. So copper spiked a lot today. Yeah, I know for homebuilders that's not going to be great either I think I mean the data center, I don't know the percent. I'd be curious to know if someone knows please at me the percentage spend of copies copper in a data center over the. Yeah, yeah over the you know the denominator of the entire spend. Well it should be how much of it. I mean how much copper in terms of the total supply of copper would a data center build out point by you as well like looking at is.
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Short too for a government stake as well. Right. Howard Lutnick made that comment about it just sort of a one off reserve as a strategic reserve. So mate, maybe when you see a sell off like this and I echo what Bono and so you never want to see any loss of life be responsible for a sell off that you want to profit from. But when the administration sees a sell off like this, maybe that ups the odds.
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Coming up, stocks falling farther from records after yesterday's valuation warning from the Fed chair. What our next guest sees in store for equities. Next best money's back into.
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Missed a moment of fast. Catch us anytime on the go follow the Fast Money podcast. We're back right after this.
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Welcome back to FAST money. Stocks closing lower for a second straight day. The Dow falling 171 points. The S&P Nasdaq both down about 310 of a percent. The small cap Russell 2000 dropping nearly 1%. Marvell Technology jumping more than 7%. Leading the Nasdaq 100. The chip maker unveiling a new $5 billion buyback plan. The stock still down though more than 25% this year. And energy stocks pumping higher. The best performing sector in the S and P with equity core Phillips 66 Devon Energy leading the charge there. Marathon Petroleum also hitting its highest level since April of 2024. Well markets turning their attention to two big events in the next week, Core PCI. The Fed's preferred inflation gauge comes out Friday and the federal funding deadline is next Tuesday. To discuss all of this and much more, let's bring in CNBC contributor David Zervos. David is a chief market strategist at Jefferies. He is on the list of 11 potential candidates to be Fed chair to see Jerome Powell. He is the most dressed up guest we've ever had here at nasdaq. It is great to see you, David.
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It's great to be here.
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Usually you're in a hoodie.
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It's like a transformation.
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B
But I want to talk to you about, first of all, Chair Powell and what he said yesterday in terms of the stock market because you are very bullish. And he, what he said yesterday was that stocks are fairly highly value. Why is he wrong in your view? Why not?
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A
Look, valuation is one of those things. It's like tasting wine, right? Everybody's got different, different views. I think there's a lot of ways you can look at the equity market and say we've had, we have an incredible earnings outlook ahead of us. We've got an investment horizon that looks incredible based on a lot of the changes that have taken place in the policies, whether it's drag, whether it's the one big beautiful bill, whether it's tariffs forcing some people to the table to invest more back in the United States, which is a huge positive that I don't think a lot of the models at the Fed are taking into account. So I think there's a lot of reasons to be confident. And one of the reasons, you know, that, that we've got a headwind a little bit to it, particularly in interest rate sensitive sectors and in the labor market, is that I think monetary policy is just way too restrictive. So been saying that for a while. Been saying it since before the election. I'm still sticking with it. Happy to see that they, they kind of have turned a little bit, but we've got a lot more to go.
- [33:08]
B
The turn sounds very cautious though. I mean, when they call it a risk management technique to cut rates now, it doesn't sound like there's another cut firmly in the books or another, you know, even after the next meeting. I mean, it just doesn't sound like the path is clear there.
- [33:23]
A
Well, look, Chase got five meetings left. He's really not our forward guidance, our forward guidance is going to be the folks. One of those persons from the 11 that you mentioned along with whoever takes the Adriana Kugler seat In January, which may be Steven, he's there for four months now. And then the drivers of Mickey Bowman and Chris Waller. So you're going to have four folks on the committee and possibly five, depending on what happens with Lisa Cook that I think are going to come at this very differently. They're going to come at it with a supply side style view, with a view that is very different than the group think that has engulfed this Fed for a very long time, but has I think become unfortunately more political as of late. So David, you're an economist at investment bank. If you're sitting in that seat, let's say in May. All right. And you are kind of getting a sense of what you were seeing all over the investment banking community. You talk to a lot of investors, you see what's going on in the investment in AI. How would you be thinking about AI and the payoff and what it might mean for the US Economy, for productivity, the like? I mean, is this something that would work into your thought process? It would, and I think it's a very complicated model that you'd have to put out there. And I wouldn't even call it a model. I'd call it a kind of discussion. I also don't like the term economist so much, even though I did my PhD in economics. I call myself a strategist for a reason. I think economists kind of ruin a lot of things. And every time I put on my PhD economics hat, I seem to get things wrong. I was a trader for almost a decade and any time I relied on my economics degree is usually when I lost money. So I learned to disavow a lot of that. That said, I can still talk to talk and listen to their models. And I will say this with AI, the smartest AI guys I know, the guys who have made the money in the largest amounts. And you know them, you have them on these shows. They've been saying it for a while. They're early in all the stocks. These are the people that are telling me in meetings we're going to lose 3 to 5 million jobs in the next three or four years, maybe even faster. And the revisions that we just got, the 911 as well as the 3 or 400,000 in the last few months. These are big changes. I'm surprised the Fed is taking this so casually, like, oh yeah, just a 25 and you know, maybe we'll keep. This was a massive change and it's very consistent with that story that those folks are spending. I say to some of them, if you if you were Fed chair and I don't think they want to be, they're making billions in their investments. They would probably have rates closer to zero because we could tell a story where the unemployment rate is actually going up quite significantly.
- [36:06]
B
Are talking their book though. I mean they're talking about how effective AI is and therefore we're going to take over the world.
- [36:12]
A
Of course, course. And I always step back and I'm like okay, you're listening to the guys who are talking there, I get it. But they're also kind of spinning a story which, which was a very non inflationary strong growth story that has some of the characteristics of the 90s that I think are really making their way through this particular time. They're spending hundreds of billions of dollars now with fed funds where they are. Can you imagine if they were close to, to zero, what sort of investment bubble we might have though? I'm not as worried about that because I don't think interest rates matter as much to these guys. These guys are looking at fat tails and the distribution. You're looking at Oracle. Oracle is looking to raise $15 billion to basically, you know, deal with what hundreds of billions of dollars of order. It's going to become a debt issue for a lot of these companies. Yeah, I just, I think these guys are going to make those jumps. If rates are even a couple hundred basis points lower. It's not going to change the calculus that much on how they see the potential payouts. It will change discount rates in the future for sure. So the long dated stuff looks better. The real venture venture stuff will catch a bit, particularly if we start to go to thinking that real rates are going to stay toward one or zero for a long time like we did pre Covid. I don't really expect that. But again I come back to the storyline which is one of the. We could actually have a pretty strong growth economy. Your story, their story, something really pretty spectacular. But the job growth side of it is not nearly as comfortable as you would like it to be. And that's a dilemma for the Fed because they have maximum employment and price stability. There's nothing about growth in there. So imagine a world maybe where we're growing at three and a half or four things are really good, but the unemployment rate keeps ticking up. What's Fed supposed to do? Well, what would you do mandate wise? I think you're supposed to be stimulating some aggregate demand. You've got millions of people that need to retool and reset and that's the job of the Fed. And there's not an inflationary story behind that growth. That is true supply side growth. And I like listening to a lot of the folks that populate this administration. They come at it from that supply side. Like I said in the beginning, Melissa, you know you have Joe Lavornia, who I think is great at talking that. I think Stephen has talked that book, Chris and Mickey still very much in that kind of ilk. So I think you get more of that view, more of this idea that we can have stronger growth with disinflation, which is not a traditional Keynesian story that you're going to get from the Austan Goolsbees and the Neel Kashkari and this sort of old guard that are spinning this. Oh my, when I get too much inflation, it's a little bit nervous. It just dropped down to number three. I just, I think it's a nice change to kind of answer your question full circle. I'm not really looking to Jay Powell for forward guidance right now.
- [39:08]
B
Right.
- [39:09]
A
That's, that's really the answer to that question about his version of irrational exuberance.
- [39:14]
B
David, great to see you. We'll let you go to your gala because you definitely did not dress up like that for us.
- [39:19]
A
Thanks for having me. Always fun. Good to see everybody.
- [39:21]
B
Coming up, Da Bears booming valuation. The NFL team marking a major milestone. What it means for the most valuable sports league when fast money returns.
- [39:34]
A
December 11th. Join Melissa Lee on the team of traders in New York City for an all access celebration live and on air. Fast Money live trading the holidays. Get your tickets now@cnbc events.com fastmoney.
- [39:59]
B
Welcome back to Fast Money. The Chicago Bears marking a milestone, selling a minority stake less than 3% that values the team at $8.9 billion. What does this mean for the sports league in upcoming sales? Bring in CNBC Sports Mike Ozanian for all the details. Hey, Mike.
- [40:15]
A
Hey, Melissa. Yeah. This shows the continued upward trajectory of NFL team valuations. The $8.9 billion valuation for this tiny stake sets a record valuation for an NFL team. And in fact, if you look at the trajectory, it surpasses the recent high of 8.6 billion for the 49ers for minority stake. And then prior to that was 8.3 billion for a small piece of the Eagles. So we see where this is going. The upward trajectory is due in part to the expectation that the league's next national TV deals will see a huge increase. Part of it also, and this really pertains to these small LP stakes who have no Say in how the team is run is the liquidity that the influence private equity has had since it's been allowed to invest in the NFL. Even though private equity has only taken a stake and three teams to this point, they kind of set a floor and provide liquidity to other LP investors who used to say, gee, if I buy this stake, you know, how am I going to get out? What's the exit strategy? Now they're saying, you know, there is an exit strategy. I can go to a private equity firm and they buy me out. Mike, help me out with this. Okay, so the Dallas Cowboys, for 19 years straight. I read your work. I love your work. Thank you. Have been the highest valued NFL team. They have not been to the Super bowl in 30 years. In the last 30 years, they've been in the playoffs only 13 times. How does that work? Well, a lot of it has to do with the stadium. Number one, Jerry Jones is a master at generating revenue from his stadium, principally sponsorships. He wrote the blueprint on it. And number two, you got to remember guys, the NFL shares like two thirds of its revenue evenly. So, you know, winning doesn't necessarily play a big part in terms of playoff game revenue and things like that, as it does in the NHL and the NBA. And then particularly with the Bears, this is a team that unlike say, the Rams and the Chargers who share L A or the jets and the Giants who share New York, they own by themselves the third biggest market in the NFL. And I think the upside as it pertains to the Bears from the rest of the league is their stadium is one of the worst in the NFL. It's. It's old and their lease is not that good in terms of how much revenue they get from it. They're pushing and working on getting a new stadium. If they do, there will be big upside. They'll be able to generate revenue more from sponsorships and from non NFL events that are held at the stadium.
- [42:51]
B
Mike, good to see you. Thanks.
- [42:52]
A
Thank you.
- [42:53]
B
Michael Zanian. Coming up, GM and Tesla both driving higher today. The Wall street calls getting both those shares revving up after this. Welcome back to Fast Money to bullish calls on the auto sector today catching our eye. UBS upgrading General Motors to a buy from a neutral, upping the price target to $81 from 56 analysts saying the company is well positioned, poised to manage tariff costs. Meanwhile, Tesla shares up nearly 4% for their highest close since December. Analysts at wolf research saying Q3 could be a strong quarter for the EV maker with deliveries beating expectations of course, there's a race to use the last of the tax credits and so that's going to potentially boost demand for the third quarter specifically.
- [43:46]
A
Yeah, I agree with that. And I think that Tesla does have tailwinds going into year end. There's a little squishy month coming up. But it seems to have, have compensated for that with that September 30 deadline. If you look at GM and Ford, that to me is lower rates. People buy cars more. Have you shopped for. You don't drive. Right, I'm sure.
- [44:06]
B
Why would I shop for a car?
- [44:07]
A
Okay, so. So when you look to add a car, these interest rates are insane. Insane. So I have four kids. And when you look to actually replace cars, it's double what you paid from back three years ago. Now, granted, there's a lot of tariffs action that influenced that price, but I'm talking about things that don't have any tariff effect whatsoever. The interest rates have dramatically made cars less affordable. Rates go lower. Ford and GM sell a ton.
- [44:32]
B
That's a major reason behind this upgrade here. Also, they're expecting North American margins to be between 8 to 10%, which is also pretty aggressive. Really aggressive. I mean, it's a bold call if they're right because I think he was setting the street, the rest of the street, at six to six and a half. That is a huge difference. It still wouldn't be expensive even if it met that target. I mean, bold call on the margins. I don't own it, but it's not expensive. But I am concerned about the overall price of cars.
- [45:02]
A
I'm with you. Inexpensive, super bold call and the rollback of essentially like the regulatory and some of the regulatory and environmental protections. Yes. I think perhaps it's a short term win, but I think it's a long term loss, so.
- [45:16]
B
All right, this just in. We've got a first read on ratings for Jimmy Kimmel's return to Late Night. Last night, according to Disney, the show got 6.26 million total viewers. Even with 23% of US TV households preempted among adults 18 to 49, the show saw its best regularly scheduled episode in over 10 years. The monologue has garnered more than 26 million views across the across YouTube and social platforms. Wow. Up next, final trades, final trade time.
- [45:52]
A
Steve, I bought FUBU TV on its impending merger with Hulu and live tv. I'm still wanting.
- [45:57]
B
Karen. Yes. I want to hedge some of my AI exposure. Bought some video, put spreads. Damn.
- [46:04]
A
Can make no sense at all.
- [46:05]
B
Okay, what do you got?
- [46:06]
A
The E in your carb is energy so oih I think it's breaking out. Bono in I'm fading the move in.
- [46:14]
B
Iwm all right, thanks for watching. Fast Mad Money starts right now.
- [46:21]
A
All opinions expressed by the Fast Money.
- [46:22]
B
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.
- [46:55]
A
To view the full Fast Money disclaimer, please visit cnbc.com forward/fast money Disclaimer 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 in the corner, global market shifts, your business is agile enough to adapt. EY shape the future with confidence.