← CNBC's "Fast Money"
CNBC's "Fast Money"
Housing And Defense Company Changes… And Next Move For Energy As Venezuela Oil Heads to U.S. 1/7/26
00:43:26
Major changes could be coming to the housing and defense sectors. The stocks seeing an impact from President Trump’s latest announcements. Plus, Oil in focus as up to 50 million barrels head to the U.S. from Venezuela. What it could mean for prices at the pump, and what the Secretary of Energy has to say about the moves. Fast Money Disclaimer
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- [00:00]
Julia Boorstin
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities, and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. EDWARD Jones, Member, SIPC oh, could this vintage store be any cuter? Right.
- [00:34]
Brian Sullivan
And the best part, they accept Discover.
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Melissa Lee
Except Discover in a little place like this?
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Brian Sullivan
I don't think so.
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Melissa Lee
Jennifer oh, yeah, huh?
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Brian Sullivan
Discover's accepted where I like to shop.
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Melissa Lee
Come on, baby, get with the times.
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Julia Boorstin
Right. So we shouldn't get the parachute pants.
- [00:50]
Brian Sullivan
These are making a comeback, I think.
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Karen Finerman
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen.
- [01:03]
Melissa Lee
Live from the NASDAQ marketsite in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight, Property bothers, shares of real estate investors sinking as President Trump proposes new policies that could upend the industry. The details and the potential impact for the housing market. And it wasn't just housing. On the agenda. The president also taking aim at the defense industry. Pay packages, dividends and much more. What he had to say and how the stocks reacted. Plus, banks break down after a strong start to the year. We dissect the continued drop in shares of Dell and it's time to reveal the 2025 acronym winner. Did Tim's band top the charts? Could Karen's course win by breaking all the rules? And what about guys?
- [01:44]
Karen Finerman
What about, what about it?
- [01:47]
Melissa Lee
We will find out who gets our illustrious acronym trophy later on this hour. You spent a lot of money on that thing. I'm Melissa Lee coming to you live from CDO B at the NASDAQ on the desk tonight, Tim Seymour, Karen Feiderman, Dan Nathan and Guy Adami. The S and P and Dow both hitting intraday records before pulling back to end the day in the red. Big banks weighing on those indices. We start with President Trump laying down a heavy hand on several key parts of the markets. In a slew of social media posts this afternoon, he took aim at housing investors as well as defense contractors causing big reactions in the stocks. Let's get straight to Eamon Javors, the White House with all the details. Eamon.
- [02:22]
Eamon Javers
Yeah, Melissa, that's right. A sharp populist term from the president of the United States today, as you say on both defense and housing hitting both of those sectors today in the market. Start with defense. The president very critical of the overall US Defense industry. The, the slow pace, he says, the high prices of some of those companies that are producing military equipment, and particularly just most recently targeting Raytheon in a scathing post saying they've been one of the least helpful defense contractors out there. The president saying either Raytheon steps up and starts investing in more upfront investment like plants and equipment, or they will no longer be doing business with the Department of War. Also, if Raytheon wants further business with the United States government, under no circumstances will they be allowed to do any additional stock buybacks where they have spent tens of billions of dollars until they're able to get their act together. Now, Melissa, this echoes a complaint we've heard the president make over the past 48 hours about the slow pace of American defense procurement. He often praises the performance of American military hardware, but he's been lamenting in recent days just how long it takes to produce some of that complicated hardware. Similarly, we saw this populist turn in the housing market as well today. Here's what the president had to say on social media. He said, I am immediately taking steps to ban large institutional investors from buying more single family homes and I will be calling on Congress to codify it. People live in homes, not corporations. I will discuss this topic, including further housing and affordability proposals and more in my speech in Davos in two weeks. So, Melissa, I think that's kind of a tease ahead, as we say in tv, to what the president's going to say in Davos. He's talking about more affordability in housing proposals. I would imagine that between now and that Davos speech, we will see some more of these ideas start to leak out. And so I think investors had better pay careful attention to the president's social media posts because I think that's where you're going to see them first.
- [04:18]
Melissa Lee
There is so much here to unpack. Eamon, I don't even know where to begin. But in terms of the defense companies, there are a couple of assumptions being made here, especially when it comes to targeting Raytheon. In particular, the assumption that any business done with Raytheon can be switched to another contractor in terms of the products that they buy, the services they procure from Raytheon. I don't know if it's that easy. I don't know if you know that. And also the assumption that there is a power in the executive branch to say you cannot do any more dividends or buybacks.
- [04:45]
Eamon Javers
Yeah. Part of what's happened over the past generation in defense contracting is there's been so much consolidation of all the defense contractors. There aren't that many alternatives, as you say, to turn to here. So the government has lost that sort of competitive pricing advantage that they had years ago when there were many more defense contractors than there are now. That's part of what's been driving some of the cost overruns over time. But what the president's also concerned about is speed of production, just the simple production and manufacture of the hardware itself. He wants to get assembly lines roaring again. I mean, the president, you know, complains often about the idea that it takes longer to build a new airplane than it did for the United States to win all of World War II. So, you know, that I think is part of this as well.
- [05:31]
Melissa Lee
Yeah. On the housing front, though, Amy, this really underscores the White House, the Trump administration's, you know, the drive to address the affordability issue, which is really hurting the Republicans.
- [05:42]
Eamon Javers
Yeah, yeah. And I think you can see a straight through line with all of the stuff that we've seen, all the activity that we've seen from the White House this week, including the military action in Venezuela. Right. The president is convinced that by pumping more oil, you're going to lower gas prices in the United States for Americans. That's going to be an input into the economy and that's going to directly impact inflation ahead of the 2026 midterm elections. The president has long said that energy is the key driver of inflation and the key input in the economy. And so whether or not the oil companies would agree with this, this White House believes that they will be able to pump more oil out of Venezuela over the next year. And, and that will have an impact on US Oil prices over time. So you see that piece of anti inflation activity, you see the anti inflation activity in the housing market, and then you see what the president's trying to do to keep costs down in the defense sector as well. All of that about affordability going into 26.
- [06:41]
Melissa Lee
Eamon, thank you. Eamon Javors joining us from the White House this evening. There's a lot to trade here. I'm not sure where you want to begin.
- [06:47]
Tim Seymour
Guy, take your defense. And again, I'm not an adviser to the administration. I'll say this. The initial headlines or statements about Raytheons and the bad actors in the defense space came out about 2 o'. Clock. Pull up a chart and look at how all those stocks fell off a cliff Cliff. And then subsequently, I think a half hour or so ago, we get an announcement out of the White House, out of the administration or off the President's account that they want to raise defense spending by 50% to go to a trillion, from a trillion and a half dollars. And look at the subsequent move now. Again, this is not nitpicking, but what I would have done, obviously not the President. We are going to increase defense spending by 50%. However, for you bad actors out there, for you just paying back dividends, for you acting slowly, you will not be part of that defense increase. Lump it all together. Don't let stocks trade the way they did in that 2 hour to 4pm period and then trade the way they're doing in the after hours. Because to me that reeks of some sort of impropriety.
- [07:48]
Karen Finerman
The housing stuff to me is maybe more interesting just because I think this is really more Main street. In the main economy, defense spending is often, you know, one on one with the government and I do think defense spending around the world, those budgets are going higher. We just talked about that. So I'm more focused on what can and cannot be done in terms of mandating what real estate and private equity guys and certainly hedge funds can do in terms of buying up mass amounts of the housing market. Remember also institutions were the ones that really bailed out the housing market back in the day. And I'll just say that some of those big institutional and hedge fund private equity, private credit folks are, have made a ton of money in the real estate space and they probably deserve it for taking a ton of risk. Also were best friends or they were very convenient strategic partners for the government to really push them into that market. So I'm not sure that this is anything more than a headline that is very important in terms of affordability. That's great. It's not something new from any administration. So I'm not surprised to hear focusing on housing and how you do it is. That's the thing. It's one thing to focus on the housing market, try to make affordability a bigger dynamic, but I'm not sure this is the way you do it.
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Melissa Lee
Why do you think Blackstone went, why do you think Blackstone went down so much in particular?
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Brian Sullivan
So I'm not sure if it's that if they ever wanted to unload part of their portfolio because it's relatively large, that it would be very difficult to do and therefore so prices would be lower. If it's that, okay, this is an ongoing business that they had that no longer can grow. Because if you can't buy in bulk, they can't buy one house at a time. I mean, that's just sort of absurd. I get the idea of why you would want to do it, though. But housing, it's not like, you know, when you go to buy a car, there's the same cars all over America. Right. You could buy similar cars all over when you go to buy a house, it is such a specific.
- [09:44]
Melissa Lee
It's got to be in this school district. It's got to be near this subway stop.
- [09:47]
Brian Sullivan
Exactly. And so I don't know in any. In all of these given markets, and there's millions of them, how much this institutional buyer really moves the needle, I'm not. Well, I'm not sure.
- [09:58]
Karen Finerman
I don't know what the actual number is. But their percentage ownership of the residential housing market is less than 5%.
- [10:03]
Melissa Lee
It's like 3%.
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Karen Finerman
Okay. So it's not something that is. Is dominating, I think, the pricing dynamics. And it is dominating certain cities and certain places. It's more concentrated.
- [10:13]
Guy Adami
All right, this comes back to, you know, Eamon used the term populist a couple of times, right, in his report. So you've got to figure out what's politics versus policy. Right? So you just mention if they're less than 5% of the, like, home buyer or the, you know, inventory out there. It's politics. Right. And so when you think about it, this administration seems pretty focused on the President Monroe, you know, the Monroe Doctrine. You remember that from back in school. Well, I think you probably take.
- [10:34]
Karen Finerman
I don't. What was that? I mean, come on. Sorry, I'm going to raise my.
- [10:38]
Guy Adami
But, but the irony is, is like, you know, Teddy Roosevelt, that's the guy I'd focus on. He was like, speak softly and carry a big stick rather than coming out and just tweeting like the world and doing and creating this sort of stuff. You know, that's not me, guys. Okay, but, yeah, yeah, but my point is, it's like, it's just kind of interesting because it's kind of asked backwards here, right? Like, he could probably achieve a lot of the policy stuff that you'd like to and then get the benefit on the political front if he just kind of took a different stance about this. So you can take this in a midterm year and throw a bunch of stuff up against the wall and see what sticks. But at the end of the day, it's going to get a little crowded there on the news front.
- [11:14]
Melissa Lee
You got to think that there's probably, there's probably bipartisan support for something like this because it's easy to put a big target on an institution's back. Right. Big old, big bad Blackstone, you know, causing the housing market to go up higher so that you can't get in. That's an easy narrative to sell to the American people.
- [11:31]
Tim Seymour
Yes, I 100% agree with that. I think it's probably a little overdone in terms of the stock action in the aftermath. It's to me, the homebuilding stocks, the sell off and those. I'm not exactly sure why that happened. I guess I could figure it out if I thought about it. But I think one of the main reasons is the housing, the homebuilder stocks have not traded particularly well now since the fall of a year and a half or so ago. And that to me is problematic. And that doesn't speak to mortgage rates. To me, that speaks to the underlying weakness in the labor market.
- [11:59]
Melissa Lee
So why is it that housing homebuilders went down, do you think? Is because the price of home is.
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Karen Finerman
Perceived to be too high.
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Melissa Lee
Be too high. Right. Lower, but in a way, transaction.
- [12:10]
Brian Sullivan
Yes.
- [12:11]
Melissa Lee
Better for them.
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Brian Sullivan
Yes. But I mean, we've seen a bunch of different ideas and none of them have been great. I mean, I think the Harris campaign, we're going to give $25,000 credit to anyone buying a home. And then of course, everyone has $25,000 to go buy a home and homes go up by $25,000. Ish. So, I mean, I get why he wants to do it. He's a master at delivering what he wants to deliver as his, you know, speak to his base. But short of getting the 30 year, I mean, that's the most crucial thing they can do. And it's not in his power.
- [12:46]
Melissa Lee
No, not at all.
- [12:47]
Brian Sullivan
Right.
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Karen Finerman
And so it gets back to, you know, where you're going to need congressional support and this is a bipartisan issue and he might get it. I'm just not sure if this is really the answer. And it is with some irony that the homebuilders, some of the really the places where they were eating the cost by, they were actually eating some of the financing costs by getting people to buy these houses. So their margins were going down, which is why they were selling off more. And so it's as if they are now being punished for something they were already trying to help us. Look, it's in their best interest to get a form to make the houses as affordable as possible and to sell them.
- [13:20]
Brian Sullivan
One thing on the Defense part. What has to happen for the budget in defense to go up by 50%.
- [13:25]
Guy Adami
You cut health care.
- [13:26]
Brian Sullivan
How do you get that done?
- [13:27]
Guy Adami
Yeah, you cut health care.
- [13:28]
Brian Sullivan
I don't know what is literally, what is the process from here? What is the process? Okay, yeah, yeah.
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Melissa Lee
Tariff raise tariffs which may have to go back to corporations if their Supreme.
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Karen Finerman
Court rules against this. So.
- [13:39]
Tim Seymour
But you're saying, is it a congressional thing?
- [13:41]
Brian Sullivan
When does that happen? How often can one make a very significant change to a spend like that? When does that happen? How does it happen?
- [13:48]
Tim Seymour
I don't know that. I mean, I'm sure we get.
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Karen Finerman
EJ would probably, but, but, but deficit spending on defense is going on around the world and if it's happening in other places that are less defense friendly than the United States, it's, it can, it can happen here. I'm sure it can.
- [14:03]
Melissa Lee
All right, let's get to banks here after start to the year. Bank stocks pulling back today. Wolf Research downgrading the JP Morgan bank of America saying things look a little too perfect in bank land. Analysts citing valuation concerns for JPM while saying there are risks to be of a forward estimate. Specifically, they say the tailwinds to NI net interest income for B of A specifically. That's fully baked into the price here. What do you think?
- [14:26]
Brian Sullivan
So I don't disagree. Right. We were talking Monday on this. I don't like this setup going into, into bank earnings which come out Tuesday for J.P. morgan. So I get what he's saying. But you know, being a long term investor in JP Morgan, if I had tried to sell every time it gets somewhat out of whack or a little overvalued and then hope to buy it back later at a better price, I probably wouldn't be left not owning any because it would have gotten away from me so many times. So I understand the rationale. It makes sense to me. But you know, I'm in this for the longer term and we'll see. I wouldn't mind if it traded down more in the next week.
- [15:02]
Karen Finerman
I think it's interesting when you consider that some of the trends. Well, first of all, Wolf's pointing out valuation dynamic and they said it was mostly a multiple rerating. I would argue that banks have never been more profitable. I would argue that the CAGR in terms of their earnings growth. Look at Citibank, that's projected to have a CAGR of about 17%. And this is a JP Morgan note I looked at earlier before the show just to kind of see where they are versus a Goldman Who's. I think valuation is about as high as it's been and they're going to grow at about around 5%. The argument here is that banks are more profitable, they're growing at a better rate, they've never been more efficient and they should be rerating is my view. Citi at 1.1 times tangible, 1.3 price to tangible book versus JP Morgan's 3.2 is the obvious stock to continue to own. And I am long the name and I do think it will continue to trade well because of the turnaround that goes on there. I just think investors need to think about should banks be rerating and in fact yes, they should. Also steeper yield curves. Banks are part of this story.
- [16:01]
Dan Nathan
Yeah.
- [16:02]
Guy Adami
At what point does administration come after the banks? I mean like think about, you can just kind of tick it off one by one a little bit and you know, I mean that's something. I don't know if it means anything for the price action what we just talked about in these other groups. It could just be a one day thing. It might, might very well be. I would look more at the investment banks and we've talked about this a bit over the last few weeks or so. Goldman Sachs up 25% in about a month and a half or so. What is that discounting?
- [16:25]
Karen Finerman
Right.
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Guy Adami
Is that discounting space X? Is it discounting stripe? Is it discounting anthropic? Is, you know, open. I, I mean at some point you think about the market cap they're gaining just to have access to be on these deals. Obviously trading is going to be great for these sorts of things. But I think you pulled forward a lot of enthusiasm about something that has not happened yet.
- [16:42]
Tim Seymour
I'm with Tim on Citi though real quick. I will report a week from today. So next Wednesday we're going to hear from Citi, we hear from the other banks as well. And he did the math for you. And I think of JP Morgan's 3233 tangible book, it's reasonable to think that Citi could be half of that or even maybe one turn more, you know, 1718 and we've done this before, that gets you about $150 stock, $160 stock. And I still think that's probably where it's headed.
- [17:05]
Brian Sullivan
Yeah, no, I agree with all of that. And then also one other thing talking about potential efficiency improvement.
- [17:10]
Melissa Lee
Right.
- [17:10]
Brian Sullivan
All of the banks, I really do believe that that is a tailwind along with I think lower regulation. Right. So I like Citi as Well, Mike Mayo, who had an excellent call on Citi last year, still like Citi. I think it's his number one pick maybe among the big money center.
- [17:26]
Karen Finerman
We, we are in one of those situations though, and you talk about this all the time, Karen, where banks have rallied a ton going into earnings. So it's hard to feel great. Citi's got a couple of things going on. They've written off their bat am ex business. They have to sell down Russian assets to zero. I mean there's going to be some sloppy stuff in there, but that's the one place I feel most confident.
- [17:44]
Brian Sullivan
So I'm short some upside calls just going into earnings.
- [17:47]
Melissa Lee
Yeah. On the Wolf research though, their top picks as you reshuffle the picks, obviously top picks, Wells Fargo and Morgan Stanley.
- [17:55]
Tim Seymour
Morgan Stanley, I can get around Wells Fargo. Not as much, especially if there's going to be a deterioration in the labor market. That's just me. But Morgan Stanley, I can understand why, you know, they continue to like that name.
- [18:06]
Melissa Lee
Coming up, chart trouble for some big tech names where traders are seeing the moves of Oracle and Dell and where those stocks are heading from here. Plus another streaming snub. Warner Brothers rejecting Paramount's latest offer in standing by his deal with Netflix. The latest on the media bids and what Netflix's co CEO sees for the streaming giant. Don't go anywhere. Fast Money's back into.
- [18:28]
Dan Nathan
This is Fast Money with Melissa Lee right here on cnbc.
- [18:37]
Eamon Javers
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Karen Finerman
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Eamon Javers
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Karen Finerman
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Guy Adami
LifeLock monitors millions of data points per second.
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Karen Finerman
If your identity is stolen, our restoration specialists will fix it, guaranteed or your money back. Resolve to make identity, health and wealth part of your new year's goals. With LifeLock, save up to 40% your first year. Visit LifeLock.com SpecialOffer Terms Apply what made.
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Julia Boorstin (Podcast Segment)
You confident that you could do something that hadn't been done before? I have no fear of failure.
- [19:43]
Julia Boorstin
Trailblazing women, changing the game One of.
- [19:46]
Melissa Lee
My favorite pieces of advice think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things.
- [19:59]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and power Players New episodes every Tuesday, wherever you get your podcasts.
- [20:08]
Melissa Lee
Welcome back to Fast Money. Hard start to the year for a few hardware names. Dell down 3% today, its third day of losses. An exec casting doubt over demand for AI PCs at CES. Yesterday the company also fac facing headwinds from soaring memory prices. Dell shares have lost over 20% in three months. Oracle shares have also been under pressure lately, down more than 30% in three months. What do you make of this weakness, Dan?
- [20:30]
Guy Adami
Yeah, well, Oracle in particular, the lack of bounce after such a devastating last few months so. The 5 year CVS has barely come in. Right. So the stock doesn't rally, CBS doesn't come in. It's just telling you how the market is voting on this one and their ability to fulfill those contracts for Open Air and the funding obviously. And then on the Dell front, I'll let these guys speak to it, but it's trading at the exact same spot it was last year at this time. And if you think about it, all that pricing dynamics that we've talked about with the storage and the memory and other components, that just squeezes their margins.
- [21:00]
Brian Sullivan
So yes, that definitely part of it. And I don't see that abating maybe in the short term. I also think they can minimize that somewhat, but not entirely. But I think the bigger part was they did a giant mea culpa in PCs. Like we blew it. You know, we had a strategy, it was wrong, we blew it. Well, what does that tell you about how the next quarter is going to be on their, on that part of their business? Right. Not good. And so I think that's more of what the move today is. I'm not 100% sure, but I was more optimistic than I should have been. And then the market was about PCs and so they had the overall PC sales were weaker and Dell lost share and this is a big embarrassment for them. And Jeff Clark has been this a while ago already. Jeff Clark moved from the CEO role to the CSG and now they're getting a new head there. But clearly it didn't go well. So I think we're going to see that reflected in earnings. Is that enough in the price? I'm not sure.
- [22:00]
Melissa Lee
Right.
- [22:01]
Brian Sullivan
But that's what it was today in.
- [22:02]
Melissa Lee
Terms of the storage, you know, costing a lot more, cost of inputs, et cetera. It doesn't really make that much sense to your point. I mean most of their sales of PCs are to corporate customers. So they could raise price.
- [22:14]
Brian Sullivan
Yes, I feel like there's demand for the consumer market.
- [22:19]
Melissa Lee
It's 80% is to corporations. So they have that sort of pricing power in a way to raise some price because of soaring memory prices.
- [22:26]
Karen Finerman
But who's the AI PC intended for? And I don't know if I know the answer.
- [22:31]
Brian Sullivan
They're saying they blew it. Well, we thought there should was interest and there wasn't.
- [22:35]
Guy Adami
Your point is though, if Microsoft can't get uptake of Copilot, who the heck needs to buy hardware that has that on the edge?
- [22:41]
Karen Finerman
My maybe it's the rhetorical question that I wasn't sure I was asking, but I'm not sure this is a hardware storage story. I mean this is a software story for most consumers.
- [22:50]
Tim Seymour
If I have any concerns, it's a couple. I mean technically major double top at 165. If you pull up a chart you'll see exactly what I'm looking at, number one. Number two, there's no real valuation concern here. I mean it's reasonable, it's been reasonable, yet it doesn't trade particularly well. Then the third thing is they don't report until the end of February. So you've got a lot of time between here and now before there's something some sort of catalyst that come out now maybe you'll get some earnings ahead of time that you can do sort of a draw a line to Dell. But short of that, I mean this stock is in sort of dangerous territory back to Oracle.
- [23:21]
Karen Finerman
I mean I don't know the fact that the chart hasn't bounced. I hear you on that, but I think that the chart is stabilized in this one kind of 90 area for a company that's not really pricing in any of this build out or this business that they might not fulfill. What's the first headline that says that they might not fulfill? It doesn't the stock rally. I mean I just don't think you're paying for it at this point. You might be paying for the credit impact. That is yet to happen.
- [23:47]
Melissa Lee
There is a lot more fast money to come. Here's what's coming up next.
- [23:52]
Dan Nathan
A streaming love triangle. Warner Bros. Discovery again rejecting Paramount's advances. But will a deal with Netflix actually get done? Plus the next move for the energy sector as President Trump promises Venezuela will turn over millions of barrels of oil to the U.S. the details on the deal and the potential impact on prices Next. You're watching Fast Money live from the NASDAQ Market site in Times Square. We're back right after this.
- [24:24]
Eamon Javers
Before we had ATT Business wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn. An influencer even livestream the whole thing. Not good for business. Now with AT&T business wireless routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.
- [24:49]
Karen Finerman
AT&T business wireless connecting changes everything.
- [24:55]
Julia Boorstin (Podcast Segment)
What made you confident that you could do something that hadn't been done before? I have no fear of failure.
- [25:01]
Julia Boorstin
Trailblazing women, changing the game One of.
- [25:04]
Melissa Lee
My favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.
- [25:17]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [25:27]
Melissa Lee
Welcome back to Fast Money. Shares of Paramount Skydance dropping today after Warner Bros. Discovery again rebuffed its takeover bid and said it still favors offer from Netflix. Julie Borson's got the details on this.
- [25:38]
Tim Seymour
Come on, two days in a row.
- [25:39]
Karen Finerman
I mean seriously, I mean worthy of a clap.
- [25:44]
Julia Boorstin (Podcast Segment)
It's always great to be here. Well, Warner Brothers Discoveries board said today, quote, paramount's offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that creates risks to close. Our binding agreement with Netflix will offer superior value. Meanwhile, Netflix responding co CEOs Ted Sarandos and Greg Peters saying the company supports Warner Brothers commitment to their deal. Now I recently spoke with Ted Sarandos for our new series which is premiering tonight called Leaders Playbook. He talked to me about his strategy around taking risks.
- [26:21]
Dan Nathan
Don't be afraid. There is a lot of trial and.
- [26:23]
Melissa Lee
Error in this business.
- [26:24]
Dan Nathan
There's a lot of trial and error in all businesses.
- [26:26]
Melissa Lee
This particular one is dependent on the taste and the trends of the public. So if you're not kind of being.
- [26:33]
Dan Nathan
A little bit flexible about what people.
- [26:35]
Karen Finerman
Are going to like, you can find yourself in this habit of just keep.
- [26:39]
Bill Capuzzi
Doing the same thing until it doesn't work.
- [26:42]
Julia Boorstin (Podcast Segment)
You'll hear more from Sarandos and Netflix Chief Content Officer Bella Bajaria about their Strategy tonight at 10pm with the premiere of Leaders Playbook. That episode is followed by our episode with Shake Shack founder Danny Meyer and CEO Rob Lynch.
- [26:56]
Melissa Lee
Melissa Guy actually worked for Shake Shack.
- [26:59]
Karen Finerman
He did for a day.
- [27:00]
Guy Adami
I was voted.
- [27:00]
Melissa Lee
I'm not sure if you know this Burgers.
- [27:02]
Tim Seymour
I was employee of the month. I just worked there for a single day.
- [27:05]
Melissa Lee
That's how I'm bad for all the other employees.
- [27:07]
Brian Sullivan
So they were happy. So the 29 days you didn't work there made you the. That's why you were happy, isn't it?
- [27:12]
Karen Finerman
And Julia asked Danny Meyer what he thought about you as an employee, and he said, no comment. Although you need to tune in to really get the.
- [27:20]
Melissa Lee
I didn't wear a hair net, which is a huge violation. But that's a whole other story. In terms of Sarandos, I assume that he was not talking specifically about what was going on.
- [27:27]
Julia Boorstin (Podcast Segment)
Well, so we actually did this interview before the deal was announced. But what was so interesting about this interview with Sarandos is that this latest deal with Netflix, which is a huge departure from their strategy of building rather than buying, they've never made a big acquisition before, is just the latest example of that. And I asked him about why, after years of saying they weren't going to do ads, they weren't going to do sports, they were going to do live, they have done all of those things. And he explained that he has a strategy of never say never. This idea that you don't do something, but by not doing it, you're also saying, we're committed to not doing advertising, but debate me on it. And it invites internal discussion and debate. And then when it seems like the market has changed and the situation has changed, then never say never. Now we're going to do ads. Now we're going to do sports. And he talks a lot about that in the interview we did for the show. Then they announced this deal. And what they did with this deal is another perfect example of never say never.
- [28:17]
Melissa Lee
Yeah. It does seem like they have had a history of where they would pivot on certain things, whether it be pricing pivots or plan pivots and. Or the advertising. And they've found success by making that pivot. So you got to sort of give them the benefit of the doubt with a deal.
- [28:32]
Brian Sullivan
I do the pivot to go to into the content business.
- [28:37]
Melissa Lee
No way would that ever work. Right? That was extraordinary.
- [28:39]
Brian Sullivan
Yes.
- [28:40]
Karen Finerman
Can I ask you a question? But why. Why hasn't Paramount raised the deal? In other words, we've gotten the financing, we've proven that, you know, like, Larry Ellison is behind this, and that's fine. And that's. It's about saying this is a better offer. I mean, what would it take to just ante it up that much more.
- [28:55]
Julia Boorstin (Podcast Segment)
Well, I think that's probably what they're discussing right now. We haven't heard a response from Paramount, Skydance since we got this news from Warner Brothers Discovery and then that, that press release from Netflix that followed, they believe that by showing that they had Larry Ellison's full committed support, that they were saying, we do have a better deal, we do have a better offer. Remember, these deals are not apples and apples. Right. They're apples and maybe something else entirely. So the question is whether now they decide to raise that bet.
- [29:21]
Tim Seymour
Netflix reports, I think on the 20th to me and if I'm wrong, they'll be the first one to say it. But into earnings, I think you want to be long this stock because this could be a quarter where they say they bring out all the guns and they actually surprise people to the upside. And we traded down the April lows. Valuation for the first time is as reasonable it's been. I love Netflix and earnings.
- [29:41]
Brian Sullivan
So this deal is sort of fascinating. It's a Delaware company, so they're in Revlon mode. Talked about that before. They have a duty to take the highest offer. Right. And so it seems clear this is the higher offer. Paramount has the higher offer, but they don't have to do it yet. Paramount isn't, they're not able to close yet. We'll see how many shares get tendered in. They get, what message they get from the market if they don't get a lot of shares in. That's because people are saying you have to, you have to bump and then we'll tender in and then they both go down the path of getting a deal.
- [30:13]
Melissa Lee
What's your position right now?
- [30:15]
Brian Sullivan
I'm long a little still.
- [30:16]
Melissa Lee
Okay.
- [30:16]
Eamon Javers
I'm lost.
- [30:17]
Brian Sullivan
Yeah, long.
- [30:18]
Karen Finerman
I'm long. Wbd. Yeah, it's going higher, I think. But you know, else is going higher. Leaders playbook, obviously.
- [30:24]
Melissa Lee
Nine to ten o'.
- [30:25]
Eamon Javers
Clock.
- [30:26]
Tim Seymour
I'm like, yes.
- [30:27]
Melissa Lee
Ted Sarande is followed by Danny Meyer. Julia, thank you.
- [30:31]
Julia Boorstin (Podcast Segment)
Thanks so much for having Julia Borson.
- [30:33]
Melissa Lee
Coming up, the next move for oil prices. The Trump administration saying up to 50 million barrels of Venezuelan oil. Oil is heading to the United States. States, the impact on the energy space and what the secretary of energy has to say about all of this. Fast money's back into.
- [30:50]
Dan Nathan
Missed a moment of fast. Catch us anytime on the go Follow the Fast Money podcast.
- [30:55]
Karen Finerman
We're back right after this.
- [31:02]
Melissa Lee
Welcome back to Fast Money. Stocks pulling back after touching intraday records early in the session. The Dow dropping 466its points, the S&P down 3.10of a percent snapping a three day winning streak. But the Nasdaq squeezing out a small gain. Some pharma moves today. Merck announcing it closed its acquisition of biotech company Sadara Therapeutics for more than $9 billion. And shares of Eli Lilly jumping more than 4% in anticipation of a deal to buy Ventix Biosciences for more than $1 billion, which would add drugs for inflammatory bowel diseases and for Parkinson's to its pipeline. The deal formally announced after the close. And check out Alphabet passing Apple in market cap for the first time since 2019, making it the second most valuable company in the world behind Nvidia, both companies just under the $4 trillion market cap level. Meantime, Reuters reporting Chevron is in talks with the White House for an expanded license in Venezuela that as the administration negotiates to import up to $2 billion worth of oil from the country. Oil prices settled below 56 bucks a barrel today. Our own Brian Sullivan's been following this developing story. He spoke exclusively with Energy Secretary Chris Wright earlier today. Brian, what's the latest on this?
- [32:09]
Dan Nathan
Well, I would say the one CEO that was not here at the Goldman Energy conference was Chevron, but they may be at the White House Friday meeting with oil executives. We will wait and see. Either way, let's fast money up. What happened today? Because whatever your thought is on more Venezuelan coming, oil coming to the United States, who's going to process it, what is the mechanics, what are the logistics of how it actually works and who might benefit? Well, you got names like ConocoPhillips and Exxon. They're out of Venezuela. There's a lot of talk about will they go back into Venezuela at some point. But the market today guys reacted with Valero. How come? Well, Venezuelan oil, as all of you very well know, is called heavy sour. It's dense. Who is good at refining? Not the only refiner, but who's good at it, who's big at it and who's in the Gulf region where that importation may happen? That is Valero. So Valero was a stock on the move today, but we're here at the Goldman Energy conference. Venezuela obviously was a huge part of the story, but it wasn't the only story. We talked about all kinds of energy and that included nuclear. And in fact, Goldman Sachs is head of natural resources stock research, Neil Mehta, not to be mistaken with Meta, the Facebook company. But Neil Mehta talked to us as well and he said he likes the nuclear story, particularly a Company that I know a guy named Tim Seymour has talked about. Listen, we love the electrification theme, though. So we are still very much a supporter of a number of stocks that have exposure to it. One example who presented at the conference is Cameco, which uranium company? Uranium company, the largest uranium producer in North America. And nuclear is going to be a necessity to meet all this baseload power needs that data centers are going to provide. So Venezuela, Melissa, was obviously the topic du jour, but it wasn't just about them. Talked a lot about Uranium Corp. Cameco, some of the nuclear plays as well. I know Tim's got a view on ccj. I do.
- [34:14]
Melissa Lee
Definitely. Bullish. Definitely. But, Brian, I'm curious about your conversation with Secretary Wright in terms of, you know, how I'm sure he's talked to these oil companies, how willing they are to go in and commit these big dollars when there is so much uncertainty when it comes to what the regime will be, what sort of security there will be, and whether or not they actually want to make these commitments. With oil trading where it's.
- [34:39]
Dan Nathan
That's right. Those are all good questions, questions that still need to be answered. So are they willing to go back into Venezuela? I don't know. I can't speak for them. I can tell you this. My reporting says that there is no plan for any new company, Chevron, of course, already there, but no plan for any other American company to go into Venezuela anytime soon. I think, as usual, Melissa, you nailed it. Because here's the other thing about investing tens of billions of dollars. You have to do it economically. Crude oil is at 56 bucks. Venezuela is cheap oil, but it's expensive to operate in, it's expensive to refine, it's dangerous, you need security, etc. So when these companies make their analysis, make their final determination, the president can encourage them, cajole, push, prod, whatever word you want to use. These companies to go to Venezuela, they have to, number one, be concerned about the safety of their employees. First, political stability, can they make money on it? And oh yeah, in three years, maybe we have another administration in the United States which doesn't feel the same way. And if we go back to the previous administration, then guess what? You're going to see an oil environment that may change and it may not make it as attractive to be in a country like Venezuela. Lot of questions. Maybe we'll get more answers on Friday.
- [35:54]
Karen Finerman
At the White House.
- [35:55]
Melissa Lee
All right, Brian, thank you. Brian Sullivan with some great reporting on this. So we've been talking about Valera for a while here we know in the short term there will be crude, this heavy crude coming to us. So we do know that there will be short term beneficiaries even if we don't know what the long term path is.
- [36:12]
Tim Seymour
Yeah, I mean they went to that without question. They also went to we talk about the crack spreads. They buy oil cheap, they sell the products rich, they're winning to that valuation, not so much. But Valero, it's not the only game in town, but they're the best game in town. I think we've been steadfast with this looks despite the move, I think analysts will start to play catch up. I think Valero continues to go higher.
- [36:32]
Karen Finerman
Marathon Petroleum is another one with exposure to Gulf Refining and ConocoPhillips has mentioned the other part of this is there are the folks north of the border who don't love any of these headlines. So a lot of the Canadian, which is also a similar crude and something that actually would be better positioned to take in through the Gulf. Gulf, you started to see some of those trade off over the last couple of names into nuclear. Nuclear independent of what happens in Venezuela is something that continues to happen. And back to those that have exposure here in addition to Cameco, I just think a Constellation Energy, that Calpine acquisition was as much about nat gas as it was also about nuclear. And I think that's a story that's very interesting and kind of combines all.
- [37:13]
Melissa Lee
Of these trades coming up, taking the pulse of the retail trader. We'll talk to one FinTech CEO about individual investor trends in the year ahead and how the emergence of the prediction markets is changing the game. More fast money right after this. Welcome back to fast money. Retail investors were very busy in 2025 buying dips, going global, moving beyond stocks into alts like the growing prediction markets. For more on emerging trends in the year ahead, Bill Capuzzi joins us here on set. He's CEO of Apex Fintech Solutions, a digital infrastructure provider for the fintech industry. Bill, great to have you with us. Great to be here. I was reading through the notes. What's interesting is how active individuals are like so quickly. When the Venezuelan news broke, you saw.
- [37:57]
Bill Capuzzi
The action immediately, immediately, not just the active session on Monday, the overnight. So coming into Monday there's now you can trade stocks equities starting Sunday night. The amount of activity in like Chevron on Sunday night was incredible, 500,000 shares which in the big scheme of things an incredible amount. But there's an overnight market now you can Trade equities from 8pm until 4am and so that activity started on that Sunday night. Last Sunday night.
- [38:28]
Melissa Lee
What is your sense as to the overlap between the people who trade in the prediction markets and the people who actively trade in equities? And I'm wondering this because in some of the prediction markets there were heavy odds that Maduro would be ousted before it actually happened. I'm just wondering if these are the same people.
- [38:47]
Bill Capuzzi
Yeah, there's a correlation for sure. I mean the speculative. Most of the prediction markets today, we big supporters of Kalshi. Most of what's happening inside of the prediction markets are in and around speculative trading. Same held on the equity side. So those two things are definitely correlated. And what we're watching is people are using information out of the prediction markets to make decisions in terms of equities.
- [39:13]
Guy Adami
So Bill, I've never seen a product gain as much steam so quickly as prediction markets. And you just said, you know, calcio is obviously very early in that and they're doing partnerships all over the place. But one of the things, cnbc. Yeah, including cnbc. And you know, for me, and I've traded options. Your parent company is a massive options trading company, market making company. When will market makers come into the prediction markets? Because that's something I think will bring it sort of mainstream in a way when you have the sort of liquidity that market makers can provide.
- [39:39]
Bill Capuzzi
I mean they're there today, right. So you know for sure there's a. There's a lot of activity when you think about prediction markets. Rewind the tape to 2024. There was roughly 100 million per month traded notionally today. Rewind to December. It was $13 billion notional traded. So there's a lot of activity. They are in pockets. So Kalshee is one. There's obviously poly markets, right. Robinhood's doing its thing. They're not. There's not one central limit order book. There is. Each one is doing their own thing. A good amount of liquidity in each one of those is coming via market makers, via liquidity providers. Yes, there's matching buyers and sellers because you're using an exchange type of structure to trade them. But they're for certain are market makers that are injecting liquidity onto one side of that market.
- [40:27]
Tim Seymour
Growth and sophistication of the retail trader is epic. And a billion options contracts traded apex last year and you would think a lot of those are zero day to export. It's not. So speak to what you're seeing in terms of options.
- [40:41]
Bill Capuzzi
Yeah, rewind the tape to 2021. Right. Greatest kind of gold rush for retail investors. Everyone sitting at home, money coming in. Most of what happened, people were buying calls, buying puts. Right. Speculative trading of options in 2021. Fast forward to 2025. Pretty amazing to watch. It's much more about how to hedge a portfolio, about how to generate yield premiums, and much less about the speculative. Not saying it's not there.
- [41:09]
Melissa Lee
Right.
- [41:09]
Bill Capuzzi
So we look at our. Over the course of 2025, you mentioned a billion trades that we cleared 40% of. It was Euro DT. So there's certainly quite a bit still of speculative trading in and around options, but that number was much higher four years ago. So people are becoming much more sophisticated on how to use tools, retail investors, how to use tools like options to create yield within their portfolio.
- [41:36]
Melissa Lee
Bill, we're going to have to leave it there, but it's great to have you come by and tell us what is going on with the retail trader Bill Capuzzi of Apex. You know, we've been doing the show for a very long time. At the very beginning, at the very beginning, 19 years ago, we made it to January, guys. So it's 19 years this week. We wouldn't talk about the retail trader that much. I mean, the rise is just been astronomical.
- [42:00]
Brian Sullivan
Yes. The thing that, to me most astronomical is that the retail trader trader did not go away after the period you were talking about during the pandemic, when that rise really happened and stuck. That was sort of amazing to me and is growing probably from there.
- [42:14]
Karen Finerman
Well, part of that is also post financial crisis, there was this whole kind of disenfranchised retail investor that. That felt that the game was rigged. The nice thing about being a retail investor right now is that the playing field has been, I would say, largely leveled in terms of information flow and transparency into pricing. Those are the two biggest things. And then obviously that translates also into zero cost trading, which has made it easy to trade.
- [42:39]
Melissa Lee
Coming up, the moment you have been waiting.
- [42:41]
Karen Finerman
Oh, boy.
- [42:42]
Melissa Lee
Like for a long time, I'm sure. We will reveal the winner of the 2025 Trader Acronym Challenge was a guy's tube or Karen's carved or Courtney's global. We'll spell it out for you. That is next. More fast money in two. Welcome back to Fast Money. It is time to unveil the winner of our 2025 Fast Money acronym challenge. So who came out on top? Drum roll, please. The champion is Guy Adali with his tube, 34.6%.
- [43:23]
Karen Finerman
You the man.
- [43:23]
Tim Seymour
Yeah.
- [43:24]
Brian Sullivan
Thank you.
- [43:24]
Dan Nathan
You the man.
- [43:25]
Melissa Lee
It was Though a photo finish, dan Nathan's Gen AI came in a close second with a 34.4% gain. And in third place, Karen Fireman's carved at 33.8%. But only one person gets a choice.
- [43:37]
Brian Sullivan
Yes.
- [43:38]
Tim Seymour
If you're not wearing your own. Last year for I put my pants on one leg at a time.
- [43:46]
Melissa Lee
Just like anybody else.
- [43:47]
Tim Seymour
Just like anybody else. But the fact that my tube was able to perform as well as it did for the entire year just speaks to the teamwork that we had and the people supporting me. So on behalf of my tube, Melissa, thank you.
- [44:01]
Karen Finerman
I like that. Really. I mean, he gave credit to the whole team.
- [44:03]
Tim Seymour
You know what, Guy?
- [44:04]
Guy Adami
You doubled up the s and P500. And many of these multi strat hedge funds that charge 2 and 20, they're like single digits or something like that.
- [44:10]
Melissa Lee
Right.
- [44:11]
Tim Seymour
Guy down.
- [44:12]
Karen Finerman
That's a strong showing. You held firm.
- [44:14]
Melissa Lee
And the trophy is spectacular.
- [44:16]
Guy Adami
You put it in between us. I think it was less than 1%. Yeah, you know, it's noticeable.
- [44:21]
Karen Finerman
I was saying someone was missing from that top three.
- [44:26]
Melissa Lee
I think you came in. Was it eighth?
- [44:28]
Karen Finerman
I don't know. I really don't place.
- [44:30]
Melissa Lee
It was eighth place. Look.
- [44:32]
Karen Finerman
Was there a nine?
- [44:33]
Melissa Lee
14%, though. 14% is quite good.
- [44:35]
Karen Finerman
14% quite good.
- [44:37]
Eamon Javers
Look.
- [44:38]
Melissa Lee
Not as good as the tube.
- [44:40]
Karen Finerman
No, it's okay. This is a humbling sport and, you.
- [44:45]
Tim Seymour
Know, it's going to be interesting to see how you sort of. How can you build upon your tube?
- [44:48]
Dan Nathan
Yeah.
- [44:48]
Brian Sullivan
Right.
- [44:49]
Tim Seymour
And we're going to learn about that probably next week.
- [44:50]
Melissa Lee
Yes. The traders, by the way, will start unveiling their 2026 acronyms on Monday.
- [44:57]
Karen Finerman
Amazing.
- [44:58]
Melissa Lee
So you will not want to miss that. Gaia, I trust that you'll take home that trophy and, yes, I'm gonna display it proudly.
- [45:05]
Karen Finerman
Be careful getting home. Someone might just, like, mug you.
- [45:07]
Brian Sullivan
Oh, I thought it was gonna fall apart is what you said. Or that.
- [45:10]
Melissa Lee
Yeah.
- [45:11]
Karen Finerman
Spelled acronym wrong, too.
- [45:12]
Melissa Lee
Okay. All right. I think that's a right.
- [45:14]
Brian Sullivan
That's a good way to spell acronym that works. We know what it means.
- [45:18]
Melissa Lee
You would think that, Kim.
- [45:18]
Tim Seymour
Yeah.
- [45:19]
Melissa Lee
Up next, final, Time for the final trade, Tim Witte.
- [45:34]
Karen Finerman
Congratulations. Guy Adami. I mean, I think we need to do that, you know.
- [45:40]
Melissa Lee
Yes. Tube is number one.
- [45:42]
Karen Finerman
There were a couple components of the band that did. Okay, the B in band, it's not going to be an acronym next week, but Boeing is performing and it will continue, Karen.
- [45:52]
Brian Sullivan
Yes. So as we go into bank earnings, this huge bank run, I'm going to be selling some Citi Upside calls Dan.
- [45:59]
Guy Adami
Yeah, Proctor. 180 to 140. And not too long a time here from the beginning of the year last year. I think it's getting a little overdone.
- [46:06]
Karen Finerman
Procter.
- [46:07]
Melissa Lee
Mr. Champion.
- [46:08]
Brian Sullivan
Yes.
- [46:08]
Tim Seymour
I'm just going to bask in the afterglow.
- [46:10]
Brian Sullivan
Are you going to Disney World?
- [46:11]
Tim Seymour
I might. You know what? That's right. You're right. We should. Yeah.
- [46:16]
Karen Finerman
Next time.
- [46:17]
Tim Seymour
Next time.
- [46:18]
Dan Nathan
Maybe next year.
- [46:18]
Tim Seymour
Trade on Netflix.
- [46:20]
Melissa Lee
All right. Thanks for watching. Mad Money starts right now.
- [46:24]
Julia Boorstin
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer what made you.
- [46:57]
Julia Boorstin (Podcast Segment)
Confident that you could do something that hadn't been done before? I have no fear of failure.
- [47:02]
Julia Boorstin
Trailblazing women, Changing the game One of.
- [47:05]
Melissa Lee
My favorite pieces of advice Thinking. Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.
- [47:18]
Julia Boorstin
Julia Boorstin Hosts CNBC Changemakers and Power Players New episodes every Tuesday. Wherever you get your podcasts.