← CNBC's "Fast Money"
CNBC's "Fast Money"
How Markets Are Reacting to the Tariff Announcements, and Who Could Buy TikTok 4/2/25
00:46:30
President Trump outlining his tariff plans at a Rose Garden event this afternoon. We discuss the impact on the economy, autos, pharma and housing. Plus Amazon and Applovin among the names reportedly putting together bids for social media app TikTok. The state of play as the divestiture deadline approaches. Fast Money Disclaimer
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- [00:00]
Melissa Lee
Say you've always wanted to take a.
- [00:02]
Guy Adami
Spontaneous trip to the Caribbean.
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Melissa Lee
Here's the thing.
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Guy Adami
If you get smart with your money, you can do things like that. With Empower, you can start making the most out of your money so you can get out and live a little. Isn't that why we work so hard to have some fun with our money, like treating yourself to something special or spontaneously doing something extra for a loved one? So use Empower and get good at money so you can be a little bad. Join their 19 million customers today@empower.com not an empowered client, paid or sponsored.
- [00:32]
Karen Finerman
What counts most to you?
- [00:35]
Dan Nathan
Maybe it's spending more time with the ones you love or maybe doing more of what you love to do.
- [00:42]
Karen Finerman
The key to being rich is knowing what counts.
- [00:46]
Dan Nathan
At Edward Jones, our dedicated financial advisors.
- [00:50]
Karen Finerman
Are people you can count on for financial strategies to help support what truly matters to you.
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Dan Nathan
Let's find your rich Edward Jones.
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Karen Finerman
Member sipc.
- [01:04]
Dan Nathan
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. President Trump announcing reciprocal tariffs on countries around the world. 34% on China, 20% on the European Union, 46% on Vietnam. And the list goes on and on. We'll break down the impact on the economy, the markets and a number of key sectors straight ahead. Plus, shares of RH getting crushed after hours down close to 25% after missing on the top and the bottom line line and issuing weak guidance. But this says about the spring housing market coming up. And later, our Elon's days in Washington numbered will Tesla shareholders cheer core. We've continue its post IPO rebound up over 50% this week. And Newsmax comes crashing back to earth and I mean crashing. The details straight ahead. I'm Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, Bono and Ice and Karen Feineman, Dan Nathan and Guy Adami. But we start off with that breaking news out of Washington. President Trump just wrapping up an event at the Rose Garden where he laid out his tariff plans, starting stocks moving sharply lower as he spoke in the last hour. The spy down more than a percent right now. Q is down as much as 3% at the lows after hours. Let's get to Megan Coselin who's got all the details. Megan?
- [02:11]
Karen Finerman
Hey, Melissa. Absolutely a lot coming out from the president just in the last hour. The top line being that the president is implementing a 10% across the board baseline tariff on nearly all countries. That's effective on April 5th. So just a few days from now, almost all imports will be subject to at least a 10% tariff. He is also going country by country for about 60 of what the White House is calling the worst of offenders and imposing a higher, what they call reciprocal tariff against those countries. To give you a little bit of a sampling, China, subject to a 34% tariff on top of the 20% tariff that's already in effect. The EU subject to a 20% tariff. Vietnam, 46%. All of those will take effect on April 9th. I'll also say the president is declaring a national economic emergency here. That's what's giving him the power to do this and to regulate imports. I also want to emphasize there are a few exemptions for Canada and Mexico. They will continue to face the 25% fentanyl tariffs and the USMCA compliant goods will continue to be exempt there. So no changes for those two countries. Also specific goods, autos, auto parts, steel and aluminum and some of the other ones that we expect to be forthcoming, copper, lumber, pharmaceuticals and semiconductors. All of those goods specifically will also be exempt from the reciprocal regime, but will face their own tariffs so far set at about 25%. Just finally, Melissa, I would flag the White House does not look like they're messing around on this. They are not really welcoming negotiations with other countries. They say if other countries reach out and offer to lower their tariffs, they're ignoring the decades of trade barriers that they've had up. They're mostly worried about non tariff barriers and they don't seem willing to lower these tariffs in exchange. Melissa.
- [03:48]
Dan Nathan
Megan, didn't the press secretary just today I think say that President Trump will always take a phone call? So what's the message here?
- [03:55]
Karen Finerman
That was yesterday. Absolutely. I know. So they want to look like they're open to talking and we will have to see in the coming days. There's not a lot of lead time that allows countries to make deals here, but maybe tariffs could take effect and then they start to come down. We also heard the treasury secretary told lawmakers just yesterday that these would be the maximum level of tariffs and they would come down from here. We do have to wait and see on that. I think the next step is that countries might start to announce retaliation. We will see at that point how this White House responds. And if they try to go higher or if they try to start a.
- [04:24]
Dan Nathan
Conversation that baseline 10% across goods, is that to prevent companies from country shopping, tariff shopping, so to speak?
- [04:32]
Karen Finerman
Yes, that's exactly right. They say they're really concerned, especially in the first term when the tariffs were mostly focused on China. We know this from companies and from industry as well, that a lot of folks were looking and setting up shop in Vietnam or Cambodia. That's what they want to cut down on is that trans shipment. They say at least there's 10% across the board. Yes. You might still leave China if there's a 54% tariff there to go somewhere else. But if that's at least the baseline, they're hoping it cuts down on that to really send a message here.
- [04:58]
Dan Nathan
All right, Megan, thank you. Megan Casella joining us from the White House with so much news. It is Lib day as it's coined, Guy, and we got a list of tariffs. So what do we make of it? We saw the market reaction, no surprise, lower in the after hours.
- [05:11]
Bono
So far, no surprise. Now the day actually sort of made sense market route. We talked about this sort of yesterday. Personally, I thought there'd be sort of a pullback, not as draconian, not as robust. The market would like that. We would continue to rally. The bond market would sell off to a certain extent. We saw that during the day. Obviously a lot of things have been reversed now. So what do you try to make of this? Well, Treasury Secretary Bessant and President Trump have asked for lower rates in terms of 10 year announcement like this might get them to lower rates. The question is at what cost? That 5,500 level in the S and P clearly is going to start to come into play again. But you know, secretly I wonder myself, have deals already been in place despite what they say about we're not going to negotiate, you can't call us. Are things in place where a week or so from now there's countries at the White House or the Rose Garden that are acquiescing and there's some sort of detente in terms of what's going on. So maybe this is sort of act two or three in a five act play.
- [06:05]
Guy Adami
Yeah, I think the debate and you know, a lot of folks have been talking about this, is this policy or is it politics?
- [06:10]
Melissa Lee
Right.
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Guy Adami
And so at the end of the day, it's kind of what Guy is just talking about is like are they going to take the calls to your question, are they looking to do deals? And you know, when I think about how targeted some of these tariffs are and how basically whatever they come back with these countries that are being targeted, a lot of these are really in Trump country. If you think about it, they're in red states. You think about what happened with farmers, farmers going back to 2018, the trade war. I mean they collected tariffs, they collected tens of billions of dollars in tariffs from farmers and then you know what they ended up doing? They ended up giving it back to them in relief. You know, so are you going to do that to the auto workers in Michigan? I mean the list goes on and on. So at the end of the day I'm probably more in guys camp that you know, they're talking a tough game here. I think they probably want to do some deals. A lot of these countries are going to come to the table and say we're going to do this, we're going to do that. And they probably won't end up doing them. So at the end of the day, I think it's one of those things where maybe they're focused on the yield. I think they're going to have to get focused on the stock market pretty soon.
- [07:04]
Dan Nathan
We are talking about certainty and whether or not we have any more certainty. As Megan had mentioned, even though we know these countries specific and the baseline tariff regime that we will operate in, we don't know the sector specific ones such as on pharma which will face tremendous tariffs because many of the raw materials come from China. We won't know semiconductors which also will probably face some pretty stiff tariffs through. But we do know for Autosomal we saw a turnaround in the after hours session somewhat. GM was down as much as 3%. It's now down 1%. You're pointing out also the Mexican peso.
- [07:36]
Steve Liesman
Yes. And that was sort of actually valid a little bit. I don't know where it is right this minute, but I think. Do we have certainty? Not on the things that you said. Do we have certainty on what the worst case scenario is? I think we do. I think this is the biggest tariffs we would see. I agree with both Guy and Sunshine Dan. Yeah. That it is very possible and probably more than 50% likely that we do see some movement there. It's interesting after the first round of tariffs going years back, how there was such a push to leave China manufacturing, go elsewhere, go to Vietnam, go to Thailand. Well, okay, so that's sort of been thrown into flux. I think, you know, you're right to see the tenure. Could the tenure come down and inflation go up. Both of those things seem likely. So that's sort of interesting and I think so who does it benefit? I think it like it benefits a Walmart over a target, but doesn't absolutely benefit either of them. So if you've got power, you're going to be relatively better off, but not better off than you were yesterday.
- [08:39]
Megan Casella
I'm not the best statesman, so me trying to parse whether this is going to be policy or politics, as Dan stated, I just think for me it's probably over my head and outside of my level of interest. What I am concerned about is how this is likely going to affect the stock market and what is Trump's willingness to affect the stock market. And I think here we have seen that this is probably worse than the worst case that was modeled in. And so even if we are, even if we do start to see some reprieve from what the levels that have been indicated right now, what is likely going to be the stock market response? I think any presidential put, I think you might at least want to rethink whether that is actually in play. And if you are in fact getting a longer, a lower 10 year yield or 7 to 10 year yield because of lower growth expectations, I think you also want to think about how we're arriving at said destination point. I will say yes. Across the board you've got a mix. We thought perhaps maybe we're going to get one sweeping tariff level or perhaps you're going to get but we've gotten a mixture of both, which I do think, I do think my other panelists are making a strong point in terms of them kind of kitchen sinking it however, you know, given his reluctance to pull back despite what we have seen in a weaker stock market tells me that perhaps he is a bit more emboldened than we're giving credit for being.
- [10:00]
Dan Nathan
The other thing we don't know is how this will impact the economy because we don't know how long these tariffs will be in place and how they will be taken by the consumer. Let's get more on the economic impact from these tariffs. Bring in Steve Liesman. Steve, in terms of what you've seen economists model in, is this worse? Is this better?
- [10:18]
Melissa Lee
I think it's worse. I don't know what the average tariff is. Maybe we could just pull up. I asked him to make a board on Canada, the eu, Mexico and China. Those are the principal sources of our imports. So that's the stuff that matters. I think it's over 20% if I'm not mistaken. So a good chunk of all of our imports will have a tariff over 20% I believe. And by the way, yeah, you see that big one on China, which I think is actually 54 because of 34, I believe plus 20. In any event, people modeled in 20% and they were detracting from GDP. They were adding to the CPI. This just seems like the President having his own sort of school of economics that's different from everybody else. And he said that the economists were all wrong, but in fact, they would insist they were absolutely right. Here's a comment from the Cato Institute, which as you know, is very conservative. They said, quote, these so called reciprocal tariffs don't mirror foreign trade barriers and ignore those imposed by the United States. For all of President Trump's talk of a new golden age, this huge tax increase will inevitably result in higher prices for American families, lower growth and business investment and diminished exports and manufacturing output. So it is not a good forecast or a good look from the economists and the forecasters. And as you can see from Wall street on these tariffs here, the President believes this will lead to a golden age of growth and increase in manufacturing. Economists believe it will lead to lower growth and higher inflation and really puts the Fed in a pickle here. You can see that there was something of a bump, however, in the probabilities of Fed rate cuts. And I think that comes from a view of greater economic weakness. And they believe it will be so great, I think that the Fed will be forced to ignore the surge in inflation there. Are the probabilities a touch higher than they have been. That December number for the third cut had been as low as 60, even 50%. But now that he's very serious about these tariffs, you have the market saying, hey, the Fed's going to cut three times. Because I believe not that inflation is going to be low, but that the economy is going to be that bad.
- [12:33]
Steve Liesman
Steve, it's Karen, thanks for being on. So getting to that Fed point a little bit more. If you're the Fed, do you need to see the inflation first before you see how you know the weakness in the economy before you're going to cut? Because I think of Jay Powell thinking of inflation as the single most important thing he wants to not have is his legacy.
- [12:53]
Melissa Lee
Well, I think there's some division on the Fed right now, but nobody's taking any action on the Fed. Everybody is in a wait and see mode. And if you take the forecast on Wall street at where they are right now, at face value, they see that core PCE number up near 3% for most of the first three quarters of this year. I personally have a problem with the futures markets probabilities being so high given that the forecast for inflation remains elevated. So I think the Fed's ability to come to the rescue might be overstated here. It's a bit like there's quite a storm and they can't necessarily launch those Coast Guard boats, even though, of course, the Coast Guard does come to your rescue in terrible weather. But in any event, it's going to be tough for the Fed to ride to the rescue with these kinds of inflation numbers that are expected. Maybe they end up being wrong. But, you know, and the other problem you have here is you have retaliatory tariffs that could be coming down the pike. And as for certainty, I listened to the president. It sound like there were three reasons for the tariffs. Bring manufacturing back to the US get foreign countries to lower their tariff barriers and raise revenue in different forms. Those kind of work against each other. Maybe you're hoping they're negotiated away. But then what happens to the goal of revenue and what happens to the goal of bringing back manufacturing to the US they sort of work. There's a tension between those three goals that make it difficult to figure out exactly what the president wants here and whether some of this can go away.
- [14:22]
Bono
All right, bear with me for one second, Steve. So I think the president declared an economic emergency, if I'm not mistaken. I think I heard Melissa use that term. It's clear that the president wants interest rates to be lower. He's made no bones about that in terms of what he has said and some of the comments that have been made through the administration. Does this give him grounds to browbeat Jerome Powell during an economic emergency? We need rates to be lower. And if he does not acquiesce, is that grounds then for dismissal? Just throwing it out there, guy.
- [14:53]
Melissa Lee
First of all, you're assuming that President Trump needs grounds to browbeat Powell. I don't think he needs grounds. He'll do it if he feels like it, and he has in the past. He can. He can do it if he wants because of the weakness. But I just think you got to put yourself in Powell's shoes, right? Is he going to be Burns here, and is he going to accommodate the political will to essentially monetize the inflation surge? I am sure that Jay Powell will not be Burns. I am positive about that. If anything, Powell in the fury, in the fury of the final hour, as Jackson Brown sung, he will model Volcker. If he is faced with weak growth but also stronger inflation, he'll probably hold for a while. But if it looks like that inflation persists, I think he's going to ignore the weakness and he's going to address.
- [15:43]
Bono
The inflation agree with you 100%, but I guess maybe I didn't.
- [15:47]
Melissa Lee
It could be grounds for dismissal. I don't, I don't know.
- [15:49]
Bono
That's my point. Because if it's an economic emergency and if he's holding his ground, is that by definition grounds for dismissal?
- [15:58]
Melissa Lee
If the president. It's supposed to be malfeasance. Guy. And I know, I'm with you, Steve. I'm 100% with court to decide. I guess at some point, I know that Powell has lawyers for all this stuff and he'd have to defend himself, but I don't think he would resign. I think he would make Trump kick him out and that would be. I'm not sure even the president wants that fight right now.
- [16:23]
Dan Nathan
All right, Steve, we got to leave it there. Thanks so much for being with us tonight dissecting all of this. Steve Liesman, a lot of interesting commentary in terms of the sort of, you know, the goals of these tariffs and how they work against each other.
- [16:37]
Guy Adami
Listen, there's some stuff in what he said that made a lot of sense. So here's one, and I want to just bear with me for a second. So we talked about shipbuilding, okay? So in 2024, China built 1,000 commercial ships versus our. Think about that, okay? Their Navy this year is going to have 400 ships. Ours is going to have 300. By 2030, they're going to have 425 versus R3. I mean, I could go on and on and on about some of this stuff, but I'm not sure tariffs, like, kind of achieve that goal. Like shipbuilding company we can build, like, yeah, I mean, let's build ships here. I mean, if we think it's important from a commercial standpoint, we think it's important from a national security standpoint. So I'm not sure a trade war kind of fixes that. So there's probably a lot of things that make sense. And the flip side of this is, like, what is going to happen in two years when we have possibly a different House? What is going to happen in four years if we had possibly a different administration in the White House, whether it's Democrat or Republican? I mean, there's some of these things, they just have to become, you know, universal. If we're going to change this stuff, it's going to be this Mar A Lago accord, then it can't just be Mar a Lago. It's got to be, you know, something much broader. And I just don't think this is going to happen over these tariffs.
- [17:46]
Dan Nathan
Let's now bring in CNBC contributor Carlos Gutierrez, who served as Commerce Secretary under President George W. Bush. Secretary Gutierrez is also also former Kellogg CEO. So you wear a lot of hats. Carlos, great to see you. Thanks for joining us. Thank you. What do you make of these tariffs right now and ultimately the ultimate impact to the US Economy and trade?
- [18:05]
Carlos Gutierrez
Well, I would say, like most people, this was stronger than what many of us expected. But it's, you know, it's the opening step. So I would expect, I would assume that this will not be in place. And a month, two months, definitely not in the back half of the year. So I'm in the camp that this is the beginning of a big negotiation. I would put these tariffs in four groups. Number one is automobiles. And really that comes down to Mexico, Canada and Germany. Korea and Japan don't charge tariffs for automobiles anymore. So Mexico and Canada will most likely be addressed with the USMCA agreement. That's scheduled for 26, but that will be brought forward hopefully in the next month or two and that the autos will be folded into that discussion. Germany, it's about, you know, they charge us 10%, we charge them two and a half. That could be fixed. And it's not only about bringing production back, but it's also about market access. So if Germany brings down their tariffs and that gives US Companies more access to the German market, the second group are these reciprocal tariffs. And this is all about negotiations. So we're going to be hearing about tariffs for quite a while now. And the president has set the stage for what he loves to do. He'll be negotiating every single day for the foreseeable future, which each one of these countries, it's interesting as we think about, is this design for negotiation or are these permanent? Vietnam yesterday reduced their tariff regime considerably, but the president didn't mention it. And he still included Vietnam with some very steep tariffs. So that tells me that he will use what Vietnam is already intending to do to name as a victory. And the president will be looking for victories. And with this number of countries, I believe he will have a slew of victories that he can point to. The third group is the 10% from all countries. And that's an interesting one. I wouldn't discard that as being a move just to prevent supply chains from moving. And that's an interesting one. We can return to that. The fourth one I would put is China. I wouldn't lump China into these other groups. China is a group on its own. China will require very special negotiation. It will not be A phone call to talk about autos, that will be something more important, more consequential. And that's hard to predict. It could be a trade deal or it could be something a lot bigger, but definitely bigger than I thought. But each one has a piece, each one has a solution. I do not believe that these tariffs will be in place going into the second half of the year.
- [20:55]
Dan Nathan
The baseline 10%, Carlos, there's no party to negotiate with on that one. It seems like that's one that could actually stick around.
- [21:04]
Carlos Gutierrez
That's a great point. And the thing here is, if President Trump is looking for a way to keep tariffs in place long term, a way to cement his legacy of tariffs, it would be by putting on, say 10% for all imports coming into the U.S. maybe five, maybe seven, in this case, 10%. So that would be a way of just saying from now on, all imports will include 10% tariff coming into the U.S. and if companies want to evaluate and analyze whether they should be manufacturing the US or where they are, just do a 10 year net present value analysis. And that will tell you whether you can afford a plan. You know, it'll be predictable, it'll be certain. So that enables companies to be able to analyze it. And it'll also be a way of guaranteeing a long term stream of revenue for the US Government. So that could be an interesting one.
- [22:04]
Dan Nathan
As you look out across the tariffs that were announced, it seems like one of the most punitive damage, punitive tariffs, the one on China, it's a 34% and that's on top of the existing 20%. And so would you be concerned about those retaliatory tariffs? Because they might not even be in the form of tariffs. They could be in the form of, I don't know, seizing officials, kicking companies out of the country. I mean, there are many ways China could retaliate.
- [22:32]
Carlos Gutierrez
Yeah, I would expect China to respond, there's no question. But it won't be dollar for dollar. I think the Chinese will do what is in the interest of China and they won't be as emotional about it. And so it could well be less than our tariffs, but something that will hurt us but will not hurt them as much. And that's something that we should watch. It's interesting with China, I was just there last week and they're a little bit confused. I thought there was more back channeling going on, but actually they're worried they're confused. There hasn't been a lot of back channeling going on. So they're just reading what they see. And in terms of negotiating, they like the idea of Secretary Besant and that has gone well for them. And I think they develop a relationship. But below Secretary Besant, there's no one. So the deputy secretary of International Commerce, international Affairs, that is not in place. No one is there. So part of the problem here is how do you get these things started? Because it's a lot more detailed than just the phone call. But China is one to watch. I would put that in a separate camp. And as you say, I don't think it will be dollar for dollar, but it should be a big negotiation.
- [23:44]
Dan Nathan
Yeah. Mr. Secretary, thank you so much for joining us tonight.
- [23:47]
Carlos Gutierrez
Thank you.
- [23:48]
Dan Nathan
Appreciate your analysis.
- [23:49]
Carlos Gutierrez
Thank you.
- [23:49]
Dan Nathan
Secretary Carlos Gutierrez, what do you think in terms of the market reaction here? We're still down close to 3% on the QS at this point.
- [23:58]
Steve Liesman
Well, I think he made an excellent point that I think will matter tomorrow, which is, I mean, Trump has really set this up to do what he likes to do, which is make deals. And here's the possibility for him to just continue making deals for weeks or however long. And so that sets up the market, if that's the case. And that seems very plausible that the market would find some relief in that.
- [24:20]
Dan Nathan
Yeah. Von Owen Yes.
- [24:22]
Megan Casella
I just think that in the short term, I think it's hard. My confidence, my confidence interval of believing that there is going to be a deal and that the goal of that deal is to lead to a higher stock market has definitely been diminished after what I've seen today.
- [24:38]
Dan Nathan
You did believe that there was a Trump put prior to today?
- [24:41]
Megan Casella
I did.
- [24:41]
Dan Nathan
And now that's out the window.
- [24:43]
Melissa Lee
Correct.
- [24:44]
Dan Nathan
Coming up, a sector by sector look at the impact of tariffs just announced by the president. We're taking a deep dive into what this means for autos, pharma and housing. That is straight ahead. But first, RH sinking after hours on a big earnings miss. All the details from that report and more on the tariff impact. That's next. More Fast Money into.
- [25:02]
Guy Adami
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Karen Finerman
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Dan Nathan
Who need it most.
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Karen Finerman
Together we're building a healthier future. Learn more@ multicare.org.
- [26:00]
Guy Adami
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- [26:34]
Dan Nathan
Welcome back to Fast Money. RH sinking after hours. The home retailer reported a miss on the top and the bottom lines, also giving a weak outlook for the quarter. The conference call got underway at the top of the hour. We are monitoring for any mention of the impact from tariffs. Traditionally, the CEO has been very frank in how he discusses things like this. Karen, what did you make of this miss Maybe not entirely surprising given the trend of consumer spending over the given.
- [26:58]
Steve Liesman
The trend of consumer spending. Right. And also, I mean the miss is pretty big, though I have to say the miss was pretty big. So also we've seen, of course, conservatism on guidance. Now there's even more cause I don't know, actually someone at me, if you do know where RH had talked about lessening their dependence on China as a manufacturer and sending, you know, having goods manufactured elsewhere, might that be Vietnam and Thailand maybe? Likely. So that's problematic in the short term as well and maybe the medium and long term. So I think I don't. This is a, this is a difficult one because we got if rates go lower, normally that would help the housing market, which would really help an rh, but not if, not if the economy's slowing and people are concerned.
- [27:46]
Dan Nathan
I mean it's almost the worst kind of bigger ticket good to sell. It's not something that you absolutely need, like a washing machine that you'll say, okay, or a refrigerator. I will buy it because I need it. You don't need a new $10,000 armoire.
- [28:01]
Bono
If I knew what one was, I still wouldn't need it. Here's listen, this is what's going to get really fun to watch. So inventories are up 35% year over year. That's like 10% sales growth. Is that some pull forward ahead of tariffs, hoping there's going to be demand, or did they just get stuck with a lot of inventory? Either way, you better hope that the consumer continues to be robust. Otherwise they're going to have the same inventory problem that Target had a couple of years ago.
- [28:28]
Steve Liesman
That's a really good point though, because their last call was wildly optimistic. Yes, wildly on demand because they believed it, they saw it. But no, that's an excellent point about inventory.
- [28:38]
Megan Casella
I would say the last piece is that their debt load has doubled from 2021 at 1.5 billion to now I think three and a half. So I mean that's significant as you're factoring enterprise value.
- [28:46]
Guy Adami
Yeah. And this is not Ikea. And I'm not, you know what I mean? Like this is probably the worst. So and we've been talking about that's the last consumer that's going to see the stress. So it is interesting to see and the fact that investors are willing to sell it down 25% after it's already almost been cut in half. It's pretty interesting.
- [29:03]
Dan Nathan
Coming up, the deadline is approaching. The tick tock baiting war is heating up. The latest names to put their hats into the ring and what it means for the social platform Next. And later, a triple play of tariff impact. We are homing in on three sectors deeply affected by the new levies. The impact on autos, pharma and housing. That is next. You're watching Fast Money live in the NASDAQ marketsite in Times Square. Back right after this.
- [29:33]
Guy Adami
Comcast business helps retailers become seamlessly restocking frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become the patient scanning data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business powering possibilities restrictions apply. This episode is brought to you by freshworks AI powered service software that makes work easier and processes less complex. Are you working harder than your software? Uncomplicate your your business with fresh service for it and freshdesk for customer support. Stop wrestling with clunky tools and start focusing on what matters. Delivering exceptional employee and customer experiences that drive ROI in weeks versus years all with no hidden fees. Start working smarter, not harder with Freshworks uncomplicated service software. Learn more@freshworks.com.
- [30:36]
Dan Nathan
Welcome back to Fast Money. Stocks sharply reversing in the after hours as President Trump laid out his tariff plans. The S and P spiders right now showing a decline of 2 and a half percent percent. The QS down by 3.4%. All major indices had finished the regular session with gains. And take a look at some of the individual stocks on the move in the after hours consumer names, no surprise, Crocs, which Karen just pointed out does a bulk of their manufacturing in Vietnam. They will be hit. They're down 10% right now. Nike down more than 6%. Ralph Lauren PVH as well as Estee Lauder on the decline. Retailers Wal Mart, Target, Costco all down big. Wal Mart down the worst down 6.3%. And as for tech stocks, as we still await sort of what is going to happen with semiconductors. We've got Nvidia down 3%. We've got Tesla down 4 and a half. Take a look at the airlines. The airlines are all trading lower here. The impact on the consumer could be the concern here. We've got United Airlines down 4%. Alaska Air down by 3.5%. Cruise lines also feeling a pinch, although they have been called by analysts this sort of most value conscious way of vacationing. They're trading lower by about 3 to 4%. Internationally, the China ETF. ETFs. The ETFs are all sinking here across the board. Crane shares, China Internet down by 5%. Large cap FXI down 3.4%. And Mexico spiking off lows when the president announced no additional tariffs. India and China ETFs, they are lower. Coming up, a check on three key industries set to feel the impact of the latest round of tariffs. We'll get the read on autos, pharma and housing next. More Fast Money right after this. Welcome back to FAST money. Let's get back to Megan Casella who's got details of what exempt from Trump's tariff announcements means. Megan, what do you have?
- [32:34]
Karen Finerman
Hey, Melissa. As we continue to parse through the details of what exactly was just signed in the Rose Garden, there are a few more exemptions here to flag. They include steel and aluminum, autos and auto parts. I believe we talked about those earlier. But it's also copper, pharmaceuticals, semiconductors and lumber, as well as any items that might be subject to future section 232 investigations and tariffs. Those are the national security investigations. So a little bit broad and some leeway there, as well as bullion, gold and silver and then energy and other certain minerals. So relief for those industries. But I would also caution, Melissa, that it is temporary. A White House official had told us earlier that the reason most if not all of these goods are currently exempt is because the president is considering additional sector specific tariffs on those items. Things like pharma and semiconductors in particular. The investigations into copper and lumber are already ongoing. The tariffs could come quickly. So Once those tariffs come, those will affect those goods. But in the meantime, and for now, they are not subject to these reciprocal tariffs, tariffs, no matter where they're coming from.
- [33:33]
Dan Nathan
MELISSA okay, Megan, thank you. Megan Casella from the White House. We've got reporters on the deck ready to dig into all these ripple effects. Diana Olek will break down housing. Angelica Peebles will hit health care. But we'll start off with Philippeau, who's tracking the automakers.
- [33:45]
Megan Casella
PHIL and these auto tariffs, Melissa, they're in effect, so the first payments as vehicles are brought into the country. Tomorrow, it happens tomorrow. That's when we will start to see the impact for automakers. Now we won't see it as consumers. A reminder, these are 25% tariffs on vehicles brought into this country manufactured outside this country. Last year that was about 7.38 million vehicles. And nobody's quite sure how much the potential impact would be. Could be $4,000 to $8,000. That is a complete estimate at this point from many in the industry. The expectation is that we will see the impact on the lower end of the market. And the folks at Cox Automotive broke down the market share by transaction price. So there you see what 40% of the vehicles sold last year in this country went for under $40,000. That is the area, Melissa, where many believe you will see the automakers really feel the pain about whether or not it's worth importing a particular vehicle. And I say importing, bringing it in from a plant in Mexico or Canada that sells in that price range there. Quickly as you take a look at the auto stocks, they've been all over the place over the last month or so, but under pressure for the most part today, they are looking to increase U.S. production. Let's be clear about this, whether that's increasing the run rate at a particular plant right now using some of the excess capacity that is there, that is goal number one right now for the automakers in this country or who have facilities in this country. We'll see how this shakes out over the weeks to come.
- [35:22]
Dan Nathan
MELISSA all of those estimates in terms of how much this will impact the price of an autofill that is just based solely on the car being manufactured overseas and doesn't factor in the fact now that we know that USMCA compliant goods are still not tariffed, correct?
- [35:40]
Megan Casella
That is correct. And look, that's part of the details and the clarification that the automakers have been seeking. They're still pushing for other exemptions, if you will, that would continue to bring down the Potential cost.
- [35:53]
Dan Nathan
All right, Phil, thanks. Phil LeBeau, let's get to Angelica, who's got the latest on pharma. Angelica?
- [35:58]
Karen Finerman
Hey, Melissa. Well, you just heard from Megan that it sounds like pharma is exempt from these reciprocal tariffs, which is a big win for the industry. Although like she said, it could be temporary because we might get these sector specific tariffs. And you heard in his speech multiple times Trump called out medicines, he said that, you know, we need more medicines made here and that companies need to bring manufacturing back to the US or else they're going to face attacks. And people have been really nervous about these reciprocal tariffs because we import about one third of our prescription drugs by dollar value. And many of the most expensive drugs are coming from Europe. So some of the branded products that we get from companies like Johnson and Johnson, Pfizer, Abbvie, they're all coming from Europe. And then on the generic side, many of those are coming from India. And so that's why there was so much worry going into this announcement. But again, it sounds like this exemption might just be a short lived relief. And we could hear more on sector specific tariffs.
- [36:51]
Dan Nathan
Melissa, the 36% number in terms of the amount of drugs being imported in, those are finished drugs as opposed to the raw ingredients that are brought into the country to make the drug here, because that's much more, isn't it?
- [37:05]
Karen Finerman
Yeah. And so that's where, you know, the details do really matter. That that number, yes, is for the drug that we're importing. And then, you know, when you look at the specifics, there's so many different categories, you know, and even drugs, they are crossing borders multiple times. So a drug, the API, the active pharmaceutical ingredient, might be made in one place and then it might the drug substance might be made in another, and then it could be finished and filled in another place. So there's a lot of cross border movement. And again, that was why there was so much confusion and concern about what would happen here. You know, would it be taxed from Ireland or from China, from India? Where were these things going to be, you know, that country of origin. And so that was the risk there.
- [37:44]
Dan Nathan
All right, Angelica, thank you. Angelica Peebles. And finally we turn to Diana for a look at building materials. Diana? Well, Melissa, the administration said the 25% tariffs on goods from Canada and Mexico, which was paused for USMCA compliant goods, including lumber and drywall, will continue on pause indefinitely. So that's a bright spot for the builders. Lumber futures dropped on that news, but other goods will see big price hikes A lot of new math will have to be done now, but estimates were that tariffs could add anywhere from 9 to $25,000 to the cost of a new home, depending on the home size and its price point. Roughly 70% of construction input costs are for goods and one quarter of those goods are imported. 40% of appliances are imported, nearly half of them from China, which will now see combined 54% tariff. Whirlpool may be an American company, but 20% of the agitators in their washing machines, they come from China and Mexico. 40% of ceramic tiles for your kitchen and bath are imported, as is 80% of luxury vinyl flooring, half of that from China. Plumbing fixtures and valves, much of that also comes from China. Now in addition, 20% of construction workers in the US are foreign born and that's the highest of any other sector. So that comes on top of those added costs for materials. MELISSA wow. Diana thank you. DIANA OLEK so as we look at the sector declines across the board we ran through, some of the stocks are being hit very hard in the after hour session. How do we think about this as we hear the reporters outline what the potential impacts could be?
- [39:17]
Guy Adami
You know, today when the market opened down nearly 1%, some of the first stocks that went up were Netflix, Spotify, so some of our digital companies and you think about them, you know, like those two names in particular, more than 50% of their sales come from outside the U.S. but traditionally, you know, Europe, they don't target like streaming services like that. So you might see maybe those things exempt the other one. Man, you want to see a stock or excuse me, an ETF chart that looks like it wants to what guy party? Yeah, that would be the xlu. They have no exposure outside the US and that's a good one. Maybe they can pull up a one year right there. So some of the defensives might not be the ones that you think either.
- [39:51]
Megan Casella
I think you could make the same argument for banks for obviously different reasons, but in terms of like the impacts of tariffs. Now clearly you're going to have to take a view on credit and the consumer and you know, deal calendar and ability to generate fees. I would say that that's likely to be offset by an increase in volatility presenting trading opportunities and fee receipts from those large institutions. So that's another place if again tariffs are your number one priority.
- [40:15]
Steve Liesman
KAREN I'm, I'm not sure what to make of it all because I think to me the strategy of the negotiations is far more important than where these things trade Tomorrow. So I don't know. I'd like to try to get a better sense of that.
- [40:32]
Bono
I take you back to the summer of 2018.
- [40:35]
Dan Nathan
What were we doing back then?
- [40:37]
Bono
We're doing this show, but it was August. And you remember Chinese devalue their currency and that started a whole cascading thing into February of the following year. And that was sort of on the back of some tariff talk. One has to wonder if China's not going back to that well again. I think over the next week or so you're going to start to hear more and more people talk about Chinese devaluating their currency and what that means. It's not good.
- [41:02]
Dan Nathan
By the way, I think the retaliatory response from China is really going to be key here as we stand, you know, we see Apple down 5% in the after hours session. Is there going to be that carve out? Will there be other carve outs for other companies making their goods in China, especially a high value good like an Apple?
- [41:18]
Steve Liesman
Yeah, you know, Nike. But also, what about our country, our companies that do a lot of business in China? China. Right, right. This is a, this is, you know, a tremendous headwind for China's economy. So Apple as both manufacturing spot and as a consumer, Nike same. Estee Lauder same. And we go on and on. Lululemon, Starbucks, I mean, not great for all of them.
- [41:41]
Dan Nathan
Yeah. Let's get to another developing story in Washington now. A host of bidders, including Amazon and Applovin, emerging as potential buyers of Tick Tock. And the White House is reportedly close to approving a sale. Eamon Javors got the latest on this, Eamon?
- [41:55]
Guy Adami
Hey there, Melissa. Well, the New York Times reported today that Amazon is entering the race to acquire the US assets of TikTok just days before this US deadline for a sale or ban of the Chinese owned company. Now, according to the Times, Amazon made its intentions clear in a letter to Vice President J.D. vance and Commerce Secretary Howard Lutnick. It's unclear how likely the company is to succeed here. Other reported prospective partners in a deal include Oracle, Blackstone and existing shareholders Susquehanna International Group and General Atlantic. The deadline for A sale is April 5 and President Trump has said there is a lot of interest among potential U.S. buyers. But Melissa, it's not at all clear that there's anyone sitting on the other side of the negotiating table here. I asked a White House official today if the Chinese have said they're actually going to sell TikTok and who the US Is negotiating with on the other side of the table. And the official only responded to me, stay tuned. So this one is very much up in the air.
- [42:50]
Dan Nathan
What does a 54% tariff on China do to this whole situation in your view?
- [42:55]
Guy Adami
Yeah, you know, I mean that's a really open question. I think that China is going to feel it necessary to respond and we'll see what that, what form that response takes. But clearly countries around the world have been waiting for this announcement tonight in order to get a sense sense of where their response needs to be. You know, I was texting with the White House press secretary, Caroline Levitt during the event just now just to confirm that the 34% tariffs on China that the President talked about as reciprocal are in addition to the 20% tariffs that he already put in place. And she confirmed it and said, yeah, so what that implies is a 54% tariff on China. And you guys have been talking about what the implications of that will be for a whole host companies.
- [43:39]
Dan Nathan
All right, Amy, and thank you. Amy Jabbers, what makes the most sense? Let's, let's say there is a sale to be made. Who makes the most sense, Dan?
- [43:48]
Guy Adami
I mean Amazon, for them it could make the most sense. You know, and I guess you know who wins by this? I mean the Chinese, if they get a huge price, it's bytedance, they're the owner. You know, they don't want to sell it. But this is a really important property. And you know, I'll just say if Twitter is worth, worth what? Elon just bought it back with at $33 billion, this thing's probably worth 2x that. I mean like whatever. So if you could buy this thing for 55, 60 or something like that, that's a huge home run for a company like Amazon that could find so many different use cases for it. And then the other thing is like normally you'd say, well, the regulatory would be a huge problem. Well, not if the President kind of like gives a thumbs up.
- [44:27]
Steve Liesman
Well, we don't know what are they going to sell it? Right. So that's a big question. They're sort of much longer term thinkers than we tend to be. And so I'm not sure, I'm not sure which way that leans. But if you're thinking down the road, you really want to sort of fight back, do you, do you block the sale?
- [44:42]
Dan Nathan
They give in on this, then what next? Yeah, yeah. Up next we'll get one more check on the major moves after hours on the back of the President's tariff announcement. Shares of names like Apple, Nike, Lulu, Wal Mart, Tesla and more all down sharply. Fast money. Be right back. Welcome back to Fast money. We've had about a couple of hours to digest today's reciprocal tariffs announcement from the White House and we do have The S&P 500, the Spies down by about 2 1/4 percent. The QS down by 3.4%. Proxies of course for the NASDAQ as well as the S&P 500 individual names are all sharply lower at this hour. Apple, Nike, Walmart, Tesla, just to name a few. We're also seeing big moves in semis, airlines and banks. We're getting a couple more headlines here. Trump is also going to end the de minimis loophole through which Sheehan as well as Temu have been able to ship shipments into the United States. Cheap goods which have put pricing pressure across the board on retail that will end in May. We've got a couple of statements from various countries regarding what they might do in response. Mark Carney, the Prime Minister of Canada has said that he will be out with a statement shortly regarding reciprocal tariffs. The prime minister of Australia said that tariffs hurt the country imposing them. And one way we can get back at the US is buy Australian. We've heard that also from Canada too. So that sort of backlash we haven't factored into the equation as well in terms of citizens of those countries facing those tariffs deciding to turn away from the United States and buy just domestic goods made elsewhere. How much should we do with all this information as we head into tomorrow's session?
- [46:23]
Bono
Guy well, watch what the bond market does. What is the reaction? Are interest rates going to cascade lower the lowest we've seen now since that 411 print. That's sort of the knee jerk reaction. And to me it's watch what happens in China with their currency and the gold market. I think if you're looking for the all clear sign in gold, I think you just got it here.
- [46:41]
Steve Liesman
I'm going to be looking at the vix, right. We said it couldn't live around here. Let's see where it goes. It's going to be up a lot. Something sort of north of 30 starts to get me somewhat interested in that. OK, panic. So that's where I sort of like to start looking.
- [46:56]
Megan Casella
Can I say both the bond market, I think Chinese currency certainly. And you know me, I'm definitely looking at the Vix. I think 35 to Karen's 30. I mean both are fantastic levels to.
- [47:10]
Dan Nathan
That'S where you would buy 35.
- [47:12]
Megan Casella
It depends on where we get the if we rally up to 35 and then pull back, well, then, no, I think that's probably a head fake. And then we have a bit more volatility. If we trade down to 35, we sell, we settle down from a higher level. I think that's probably where you start to dip your toes in. Yeah.
- [47:27]
Guy Adami
And again, as the silver lining guy in the desk, I would just say that with today. I would just say that with in the aftermarket, we're down six and a half percent in the S&P 500. And you know what's discounted here? We still have about a 270, you know, S& P earnings estimate right now. And so as long as that stays here, it's going to look more and more expensive. Right. So. So let's track some of these strategists, what they do. We've seen price targets come down. We haven't seen too many estimate cuts right now. And I think consensus is still for like 12 and a half percent year over year. Way too high.
- [47:58]
Dan Nathan
Well, the earnings season is going to be a doozy now that we have the tariff regime laid out. And by the way, we've got a jobs report on Friday. Guy, just to toss that into the.
- [48:06]
Bono
Mix, what are you rooting for there? The mean you want a strong number. You want to. So that's one more variable to this whole thing.
- [48:12]
Dan Nathan
All right, up next, final trades. Time for the final trade. Let's go around the horn.
- [48:22]
Megan Casella
Bonoin, listen, given the uncertainty, I think it's tough to pitch what you should buy. Let me tell you what you shouldn't buy. Dollar tree. I don't think there's any differentiating there. And the tariff did not help.
- [48:32]
Dan Nathan
Down 11% right now. Karen.
- [48:34]
Steve Liesman
Yes. So this is my second day of do nothing, but I'm really going to be watching the vix with Bonwin and other panelists probably as well. And when it really, really spikes, that it's going to start to get interesting.
- [48:46]
Dan Nathan
Dan, Nathan, you know I hate the.
- [48:48]
Guy Adami
Final call and you guys are not playing by the rules.
- [48:50]
Dan Nathan
Sure.
- [48:50]
Guy Adami
Yeah. Okay. Nike, I think got the COVID lows.
- [48:53]
Megan Casella
That's okay, Guy.
- [48:54]
Bono
I've always liked it. I think Sandy did a great job.
- [48:57]
Dan Nathan
And a back in the job miles too well, Phys. All right, thanks for watching Fast Mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money DISCLAIMER, please visit cnbc.com fastmoneydisclaimer this episode is.
- [49:52]
Guy Adami
Brought to you by Freshworks AI powered service software that makes work easier and processes less complex. Are you working harder than your software? Uncomplicate your business with FreshService for it and FreshDesk for customer support. Stop wrestling with clunky tools and start focusing on what matters, delivering exceptional employee and customer experiences that drive ROI in weeks versus years, all with no hidden fees. Start working smarter, not harder, with freshworks uncomplicated service software. Learn more at freshworks.
- [50:21]
Dan Nathan
Com.