← CNBC's "Fast Money"
CNBC's "Fast Money"
Inflection Point For The Market… And the JPMorgan Healthcare Conference Kicks Off 01/13/25
00:43:39
Some of the most popular names in the market seeing some major moves. How the recent drops in Nvidia, Tesla, and Bitcoin fare from here, and how banks are setting up ahead of earnings season. Plus The prognosis on the health care space, as the industry’s top execs convene at the JPMorgan conference in San Francisco. How our traders are handling the moves in the space’s biggest names. Fast Money Disclaimer
Loading summary
Transcript178 lines
- [00:01]
Melissa Lee
What does it mean to be rich? Is it having more stories to share or time to give? Is it being able to keep your loved ones close or travel somewhere far away? At Edward Jones we believe the key to being rich is knowing what counts. Your dedicated financial advisor will take a comprehensive approach to your financial strategy to help support what truly matters to you. Edwardjones.com findyourrich Edward Jones Member SIPC Global.
- [00:32]
Guy Adami
Markets up to the minute, front page news.
- [00:34]
Frank Holland
Wake up to Frank Holland and Worldwide.
- [00:36]
Guy Adami
Exchange weekdays 5am Eastern.
- [00:39]
Frank Holland
CNBC Live.
- [00:40]
Guy Adami
Ambitiously.
- [00:44]
Melissa Lee
Live from the NASDAQ markets in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. Pause or pullback? Some of last year's hottest trades dropping sharply from recent records. Is this just a rally taking a breather or a sign of more trouble ahead and weighty issues? The obesity drug space front and center at this year's JP Morgan Health Care Conference. The latest from the top players in the space and what we might be hearing about potential dealmaking. Plus, KB Home on solid foundation after earnings are a pair of rivals teaming up to buy US Steel and why hedge fund titan Bill Afton is looking to take over Howard Hughes. I'm Melissa Lee. Coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Feiderman, Dan Nathan and Guy Adami. We start off with the major moves in some of the market's most popular names. Apple spending most of the day in correction territory ending down a percent and now more than $25 off its post Christma Christmas high in video bitcoin and Tesla down double digit percentages all as a 10 year treasury yield hits a 14 month high after last month's blowout jobs report. Last week's I should say. And as chances of a rate cut this month lessen. The dollar index also on the move at its highest in over two years. And don't look now, but a huge slate of earnings is upon us. J.P. morgan, Goldman Sachs, Wells Fargo and Citi kick things off for the big banks on Wednesday, followed by reports From Taiwan, Semi UnitedHealth and many more later this week. So is this just a temporary pause on the road higher for stocks or are we nearing a major inflection point for this market guy?
- [02:10]
Tim Seymour
That's an interesting setup, Malms. So here you go. I'll give you my sort of 2 cents. An optimist will say, you know what great reversal today off the lows. That was very impressive. The VIX backed off Great day. We're going higher now from here. Pessimists will say that's a pretty feeble bounce.
- [02:26]
Frank Holland
Is that what you said?
- [02:27]
Melissa Lee
That's why.
- [02:29]
Tim Seymour
Well, you know where I stand. I'm not trying to bury anything here off what was a pretty miserable favorable day on Friday. I'll say this, I think right now as we're sitting here, 10 year yields are now firmly above 480. I think they're trading for 81 or so. That's the story. So the market in this environment, our economy and our stock market is not set up to have yields trade higher in the manner they have over the last couple of months.
- [02:52]
Melissa Lee
Which camp are you in?
- [02:53]
Karen Feiderman
KAREN of the I'm not a pessimist, you know, I'm always long so you have to kind of always be optimistic. I am concerned about the right thing. But remember, I mean we are off a good at least 5% since that December peak, whenever that was. So you know, we'll see. I like to, you know, know what earnings are and understand what are the fundamentals. And so I also really like to hear from banks because not only do we get their fundamentals but they have such a good look on the economy at large and I think we're going to see some good earnings. So I am long staying long.
- [03:26]
Frank Holland
So intraday at one point the S and P was below the 50 day moving average and it hadn't been there since August 4th 5th essentially when we had a growth scare. So we don't we have the opposite of that here. We have, we have a bit of a rate scare and the question is we always ask is this move orderly? And I think 120 basis points in the 10 year from the almost the moment the Fed started hiking rates is reasonably orderly. What's happening in Japan doesn't feel very orderly and I think if you look around the world there's some places where those bond markets aren't acting orderly at all and I think there's an issuance glut that's coming and I think we're seeing it in other parts of the world as much and in terms of the administration coming in, we know there's a growth first, debt second kind of approach here. So back to equities, it's a very interesting day because that reversal is very important. It's not just the S and P but semiconductors. If you look at the SMH was clinging to that 200. It's been kind of bouncing along there. Finished, finished, positively. But again getting back to the leadership of whether you do have the Mag 7 and the outperformance of a couple to each other is also very interest pricing matter up almost 11% to Apple year to date. But I think equities came into this year with Uber complacency, cash levels uber low. No expectation that the job market was going to be quite this strong. And I think it's a reaction and I think that's something volatility will come with that. But my glasses have full.
- [04:46]
Guy Adami
Yeah, I'm pretty neutral right here and I'm in Karen's camp. I want to wait for Q4 earnings and really more importantly I guess Q1 guidance. If there's anything we can glean into the year. You know expectations for earnings growth are still 12, 13% or so. And I just don't know how you get there for these large multinationals who are dealing with a dollar that's trading at multi year highs. You have yields that are trading very near multi year highs. You know and I'm just looking at like crude oil, you know today you saw the airlines, they were all down like for some percent. I'm looking at what's the headlines. We saw some earnings last week it was crude oil trading at 79 bucks is what I suspect here. So when I think about this, it's got to come from the leadership. That fateful aid. If you look at some of those names that we saw today, you're talking about, you know, a big, big reversal in Tesla, Apple down on the day. It had a fundamental reason to stay down in the day. So when I think about what happened, there was a lot of pull forward over the last kind of month and a half or so. So now we have to wait for earnings, we have to wait for this inauguration. Because one of the things I think is really important is like some of these big moves that we saw after November six. Right. So you had these kind of runaway FOMO sort of trades. Well, they've given a lot of it back. Right. So is expectations of maybe a different regulatory environment. Now we get to the confirmation phase of all these folks that are going to be, you know, that were nominated for these roles. And I think this is the back and forth that you get on policy and this might shift sectors. We've had a really nice run. Some of them have given a lot of that back. So I think earnings and I think you know the confirmation period is going to be really important for regulation.
- [06:14]
Melissa Lee
You mentioned your faithful eight and that brings into light the fateful eight being the biggest seven stocks plus formerly The Mag seven plus. But just in case people.
- [06:22]
Guy Adami
Yeah.
- [06:22]
Melissa Lee
You know haven't really drive. Right.
- [06:25]
Guy Adami
Comfortable with that here.
- [06:26]
Karen Feiderman
In case it's not an acronym.
- [06:27]
Melissa Lee
No.
- [06:28]
Karen Feiderman
Nothing.
- [06:29]
Melissa Lee
Stay tuned for you Karen. Going to say it's true for Dan but. But that sort of underscores the. Just the how this market is built and the market is built on the market cap of these stocks. And you mentioned Apple being down for a fundamental reason. Nvidia was down for another fundamental reason, the fear of further export control. I mean there, there are certain things that, that some of the biggest stocks are actually grappling. Grappling with and not. It's not just positioning here. It's actual fundamental issues which might affect their business.
- [06:57]
Tim Seymour
Yeah. Each have their own without question. And I think we're at a point now where 10 stocks. So 2% of the S&P 500 are 40% of the weighting of the S&P 500 which is remarkable. I got to believe that some sort of record but you know it speaks to the top heaviness of the market and maybe it's not as broad based rally as we thought. But with your point as well taken, each of these names have their own issues. The one that I think is interesting. They're all interesting but you know the move in Apple seemingly come out of nowhere. Yeah. There've been some negative headlines along the way but we've seen that before and the stock didn't seem to care for every reason is now. But you know I encourage you to go back. Look at where we topped out in July, all through the summer into October. It was sort of 232 or so. That was a prior all time high. That should be support and that's where we seemingly are stopping right now. On the downside it feels like it's.
- [07:46]
Melissa Lee
Become in vogue to criticize Apple and to say iPhone sales are going to be soft and iPhone there's no reason to upgrade the phone. People are going to last longer. People don't want a future proof their purchase of an iPhone. You know buying an advanced version in. In anticipation of those AI sort of features. Because Apple hasn't shown any proof of those AI features at this point. At some point this becomes consensus though that's fine.
- [08:08]
Frank Holland
It's not in the stock. I mean you can't tell me the stocks, the stocks. First of all, now that it's given back some of this move the Stock's effectively up 10% in two and a half years in one of the greatest bull markets of all time. There's nothing In Apple stock, this is one of the best stocks in the market in terms of giving back capital. In terms of running their business as a cash flow machine. The services business isn't 30% plus, but it's certainly, it's solidly 20s and it's certainly got a margin attached to it that allows it to trade at a higher number. Should it trade at 33 times forward? Probably not. But I just go back to Apple and I say this is a company that I feel really comfortable owning in this environment relative to some of its, its peers in that what is faithfully faithful. So I mean, I think you've got a dynamic here where it really is. I would take all that negativity and say that's right. And it's in the price.
- [08:55]
Karen Feiderman
I would say if you're looking for fateful eight that are really, I think value to me, Metta and Alphabet are far more compelling and multiples much closer to a market multiple than 32 odd, whatever it is.
- [09:08]
Tim Seymour
Was that a movie with like Denzel where they think is that a remake? I don't know.
- [09:13]
Guy Adami
It was the hateful.
- [09:14]
Tim Seymour
Oh, the hateful.
- [09:15]
Guy Adami
Oh, so you play on words.
- [09:17]
Frank Holland
Is it Denzel or Denzel?
- [09:19]
Melissa Lee
Denzel stuff going on to explain this and spend that much time.
- [09:22]
Tim Seymour
By the way, Denzel is a huge fan of Fast Money.
- [09:25]
Frank Holland
He's watching right now.
- [09:26]
Guy Adami
So we're can't wait for the afternoon. Yeah, we not spending a lot of time talking about Amazon, which I think is really interesting because there's a lot of levers to pull. We think about some of the stuff we came in today. We saw Lulu guide up. They're kind of, you know, saying some pretty decent things about holiday sales. We know that obviously, obviously that's not a huge margin contribution there. But some of the stuff out of us over the last year and a half or so coming off of a bottom, I think that's one to really keep an eye on. But I also agree with Karen on the Alphabet. I mean this is one that's been fairly underappreciated. I think the underappreciation as it relates to Microsoft probably has more to do with this kind of early leap that they had as far as their relationship with Open Air. But also when you think about this company, they're not getting a lot of uptake with the co pilots, which is what this open air technology was powering.
- [10:10]
Melissa Lee
All right, well, Evercore ISI bracing for further market weakness. Julian Emanuel is the firm's senior managing director. He joins us here on set. Julian, great to See you. How much more weakness are you thinking of?
- [10:21]
Julian Emanuel
Probably not a lot more. Okay, so we came in essentially December 18th. The FOMC changed the outlook on how to think about volatility. And we finally get this, this idea where yes, there's damage being done by virtue of higher yields and yes, at what was then 25 times trailing earnings, markets are going to be vulnerable to less than perfect news. And we've had a lot of less than perfect news over the last several weeks. But when we think of the manic swings in sentiment we've seen in just frankly since the beginning of the year, and you superimpose that on the fact that earnings season is starting Wednesday, you're going to get a CPI report on Wednesday and you're going to get a new president inaugurated on Monday. Even if some of the information there is less than perfect for markets, you're going to have resolution of uncertainty to a certain degree. So to us we think you possibly test 5,700 on the downside if things get incrementally more ugly, maybe down to 5,520. But for us the bigger picture is we think you're going to 6,800 by the end of the year.
- [11:35]
Karen Feiderman
So thanks for being here. So if you were to get to that 6800, what do you think are what makes up that perfect environment in terms of unemployment, inflation, capital, I mean financial conditions, what's the perfect brew there?
- [11:54]
Julian Emanuel
The most important thing is that the 10 year yield remains in check. What's okay check is basically called 450. You could nudge towards 5%. But frankly if you look at this, the entirety of this bull market going back to October of 2022, stocks have had difficulty as they are now. When you get above 475 and you've actually only spent one day at 5% in that entire time and that was the end of the biggest correction that we've had this entire cycle. So to us that is the thing because the Fed, I don't care what anyone says, the Fed's not hiking rates this year, let's put that aside. And we don't think there's a recession. So. But what you're left is how effective the bond vigilantes are going to be in dictating what the limits of policy and dictating where multiples can go.
- [12:48]
Frank Holland
Are you worried at all though about inflation as it relates to me? Look at copper prices going higher here, look at oil prices going higher. I realize there's been fundamental news around the oil market I don't think so much around Copper. What we're seeing feed through here. Look, a lot of people the Fed funds rate means nothing to what they pay for their mortgage, for their houses, corporate borrowing. I mean I think inflation is going higher and I think leaving the Fed aside, how does that play into the equity market?
- [13:12]
Julian Emanuel
So look over the long term inflation in manageable dollops tends to be a positive for equities. We know that's one of the rationales. I think you have to think about it within the context of what the intent is this year. And when you look at the Fed they're likely going to tolerate inflation being a little bit stickier the same way they did last year in the spring simply because their read right now is that the longer term 10 year yield moving up the way it has is likely going to moderate financial conditions from overheating.
- [13:51]
Tim Seymour
After being inverted for the longest time in history, the yield curve is now as steep as it's been probably in four or five years ish good or.
- [13:58]
Julian Emanuel
Bad at net good. Okay. I think this entire cycle going back to post pandemic, the return of quote unquote normal price of money and normal term premiums. We both know that in our careers this is still very low in terms of where the yield curve is and you could go a lot higher. Our concern is that it happens in a more disorderly way if there's a reaction to policy as it evolves over the next several months. But we don't expect that as our base case.
- [14:32]
Melissa Lee
Julian, great to see you, thank you for stopping by.
- [14:34]
Julian Emanuel
Thank you.
- [14:35]
Melissa Lee
Julian Emanuel. So steep. That's good for banks. We're going to hear from them.
- [14:39]
Guy Adami
I mean JP Morgan traded great today and I think Karen's point, what's the read on the consumer like how is, you know, business activity going? And we're going to get all that by the end of this week. You know, when I think about it and Tim just mentioned this, you know going back to July, August there was a growth scare. And so this is like a perfect ingredient in my opinion where valuations are in stocks here. You know the concentration of this index. We also have two years that have been powering, you know, the secular shift as far as generic generative AI. If there is a digestion phase, if CAPEX starts coming down, if you do not see the use cases for this technology and the return on those investments, then you put that together right with the potential for an economy here. But also overseas that is going to start to feel the effect of just, you know, dollar yields. And then the last thing is the deflation in China. I don't know if that's fixed this year. And I think that's the sort of thing, if that is exported around the world or at least in the emerging world, that's going to weigh on our U.S. multinationals.
- [15:34]
Karen Feiderman
I think one thing to come out of the banks will be consumer strength.
- [15:36]
Melissa Lee
Yes.
- [15:37]
Karen Feiderman
And I think that we've had this brief sell off in some discretionary names that I think is an interesting opportunity.
- [15:44]
Melissa Lee
Let's get to an earnings alert on KB Home shares are jumping after hours on Top Line and Bottom Line beats cnbc. Diana Olek's got more. Diana? Well, Melissa, the big concern here was mortgage rates, which had dropped to recent low in September. At the time, KB CEO Jeff Metzger said in the previous earnings release that Q4 demand was coming in strong, but rates shot up after that. Apparently it didn't matter. KB still saw net new orders up 40% year over year in Q4.
- [16:09]
Diana Olek
In this release, he said buyers continued.
- [16:12]
Melissa Lee
To demonstrate a desire for home ownership and housing market conditions improved relative to last year despite ongoing mortgage interest rate headwinds. Now the average selling price was even up 3%. Gross profit margin increase ever so slightly. KB's average price is right around $500,000, so kind of in the middle for new builds, higher than Lennar and Dr. Horton, lower than Pulte and Taylor Morrison. Home deliveries were up 17% year over year. Melissa, I just want to note, I was just listening to the conference call before I wired up and Metzger was saying there that they were seeing a software start to this quarter to Q1 of this year, and that's likely due to mortgage rates. He said that he hopes to make it up in the upcoming spring season. All right, Diana, thank you. Diana. Oh, look, that's assuming mortgage rates come down, but if we're here, higher for longer, who knows? Guy, what do you make of this point?
- [17:01]
Tim Seymour
So, I mean, this was an $89.70 stock a couple of months ago, traded almost in a straight line down to where we bottomed that at today. I think this is a bit of a relief rally, but but I'll say again, if you think interest rates are going higher, which I want to be clear, I do. And if the unemployment rate will go higher, which I also do, think the homebuilders are a hard buy right now.
- [17:21]
Karen Feiderman
I take the other side of that respectfully in that we talked about this a number of times, this phenomenon of all of these sort of stranded homes that aren't at the market yet because people's mortgages are too cheap. That, to me is a bigger threat to homebuilders and this environment is good for them. And so I kind of like the space.
- [17:39]
Melissa Lee
All right, coming up, keep your friends close and your rivals even closer. While Cleveland Cliffs and Nucor may be coming together to make a bid for U.S. steel and the likelihood that deal gets done, we're continuing to monitor the devastation from the deadly wildfires in California. The latest on the damage as firefighters brace for more dangerous winds. Don't go anywhere. Fast Money's back in two.
- [18:02]
Guy Adami
This is FAST MONEY with Melissa Lee right here on CNBC.
- [18:12]
Frank Holland
And now a next level moment from @t business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. ATT 5G requires a compatible plan and device. 5G is not available everywhere. See att.com 5G for you for details.
- [18:42]
Guy Adami
Global markets up to the minute, front page news.
- [18:45]
Frank Holland
Wake up to Frank Holland and Worldwide.
- [18:48]
Guy Adami
Exchange, weekdays, 5am Eastern. CNBC Live ambitiously.
- [18:55]
Melissa Lee
Welcome back to Fast Money. Firefighting efforts continue in Southern California as dangerous winds and dry weather counter efforts to contain the deadly wildfires in the region. At least 24 people have died and evacuation orders have extended to 92,000 LA residents. Wells Fargo securities estimates insured losses of about $30 billion as of this afternoon. For more on the damages, let's bring in Contessa Brewer, who is there in the midst of it. Contessa?
- [19:25]
Diana Olek
Yeah, I'm in the Pacific Palisades this evening, Melissa, and we've also seen a massive jump in the estimate on economic losses from AccuWeather. It went from on the high end range of $150 billion to this afternoon, $275 billion. And when you're out here and you see the damage in these neighborhoods, you're just looking at house by house on every street. And to me, it just seems apocalyptic. Recovery.lacounty.gov gives homeowners who have still been forced to evacuate some confirmation that maybe their home is gone or by miracle, maybe it's still standing. But this website is far from updated. The insurers have said right now they're relying on aerial imagery to go overhead and try to get a sense of where their policies may come into play. Many of the homeowners in this neighborhood would have bought coverage through California's last resort insurer, the Fair Plan that we were talking about. MELISSA Today it sent out a notice saying it's way too soon to put a dollar figure on its expected claims, that it's too soon to say whether it will have to tap other funding sources, which basically means make all the other insurers pay, even if they haven't been collecting premiums on these neighborhoods. And it warned it operates on a cash in, cash out basis when paying those claims. As I've previously reported, it doesn't have a lot of cash on hand. So that could mean a delay in getting money into the hands of the people who held those policies. And as of right now, we've seen red flag warnings in effect. Those Santa Ana winds returning, they're expected to pick up and be very strong tomorrow. And this is a neighborhood, a town, a city really, that is on edge.
- [21:12]
Melissa Lee
MELISSA Contessa, in terms of the Fair Plan and what it has in reserves, how does that compare to what is now the estimated insured losses of about 30 billion?
- [21:24]
Diana Olek
Well, remember we were talking about Pacific Palisades and how as of last year, and you know, we're months behind on updated numbers, but it had some $6 billion in exposure in the Pacific Palisades. Now, that doesn't mean $6 billion worth of homes that have burned because as I said, there are some that are still standing. But it had hundreds of millions of dollars statewide in reserves. So how that plays out when you there's just so much damage. MELISSA I have not seen, seen damage like this since I covered the aftermath of Hurricane Katrina and I have never seen it from a fire ever.
- [22:04]
Melissa Lee
Wow. Contessa, thank you. Contessa Brewer bringing us the latest from California. How should we start thinking about this? And I mean the, the economic, the impact to lives, which means economic impact is almost unfathomable at this point.
- [22:18]
Guy Adami
GUY yeah.
- [22:19]
Tim Seymour
And remember what we're tasked to do. So I don't think any of us want to be, you know, deemed or looked at it being insensitive. That's not the case at all. But in terms of the show and the purview, if California was a country, depending on the day, it either be the fifth or sixth largest economy in the world, for perspective. So you look what's going on there and you start to connect the dots and say almost by definition, this is going to create a bit of a slowdown. I mean, it's horrific and Contessa just said it really well. But in terms of the economic impact, I think the market's going to start to come to grips with it soon.
- [22:50]
Melissa Lee
Yeah, insurers didn't go down today, but that doesn't mean that they bounced in any fashion off of the losses that they saw yesterday. There are a lot of questions here in terms of the insurance market, how this is structured and why there can be such vast tracts of homes that can be left to the last insurer, basically their plan.
- [23:11]
Frank Holland
Well, and if you look at again as guy saying this is just trying to assess the insurance market and not in any way comment on the devastation because it's been extraordinary. And if you look at the, the insurance ETF kie, for example, what gives you some sense, it runs across, you know, not just property casualty, but a number of other different dynamics. You can see that this was already off about 15% coming into this. And we had not only the, the tornadoes in the hurricane season that was devastating also on the east coast and the Caribbean. But, but what's, what's really clear here is that a lot of these insurance companies were already assessing risks well before this and that in fact, as we know, both in terms of they priced premiums significantly higher over the last couple of years coming into this, in some, their risk management teams were, were hard at work. And I know that again, this is a very controversial area. But a lot of these folks were already cut loose and that's part of the horror here. I mean, a whole middle class of people have seen essentially their life savings in their homes wiped out.
- [24:13]
Melissa Lee
There is a lot more fast money to come. Here's what's coming up next.
- [24:17]
Frank Holland
Foes forging ahead, unlikely partners coming together to make a bid for US Steel as the deal with Nippon hangs in the balance. What it all means for the US Industrial giant plus, a huge day for health care as some big pharma names make even bigger stock moves.
- [24:36]
Guy Adami
The sounds and sights from JP Morgan's healthcare conference ahead. You're watching FAST MONEY live from the.
- [24:42]
Frank Holland
NASDAQ market site in Times Square. We're back right after this.
- [24:51]
Guy Adami
Global markets up to the minute, front page news.
- [24:54]
Frank Holland
Wake up to Frank Holland and Worldwide.
- [24:56]
Guy Adami
Exchange, weekdays, 5:00am Eastern, CNBC live. Ambitiously.
- [25:03]
Melissa Lee
Welcome back to Fast Money. A new deal for U.S. steel could be in the works. Sources telling our David Faber that Cleveland Cliffs and Nucor are partnering for an offer for the company after the White House blocked Nippon Steel's takeover bid earlier this month. The offer set to be in the high $30 share range. With Cleveland Cliffs set to complete the purchase in cash later spinning off the big River Steel unit to Nucor. This is an interesting development to us companies coming together. Sounds like the deal could happen then.
- [25:30]
Frank Holland
Well, it's clear that Cliffs could not have done this by themselves and that's why they found a partner with a much better balance sheet because Cliffs has had a tough time even refurbishing a lot of their own stock. But this has been about Nippon Steel coming in and actually spending money on infrastructure, maybe 6.6 billion, maybe more, keeping people employed. So is it better that two US companies are coming together here? I don't think so. But ultimately about for shareholders where that bid was and I think it's above.
- [25:57]
Karen Feiderman
40, I think there's sort of, there's still a deal in place, a valid.
- [26:03]
Melissa Lee
Deal in place and both parties still want to pursue that deal, want to pursue that.
- [26:07]
Karen Feiderman
So I'm unclear how. First of all, I don't think they could come up. I mean maybe they could. I think it's unlikely when they talk about a high 30s deal to come up with as much. So I think that, I mean they can try, but I think we're for a couple of months. I think there's still no clarity here.
- [26:25]
Melissa Lee
Yeah. What do you think?
- [26:26]
Tim Seymour
The timing is interesting. I mean it's again, not that it seems to me though somebody got a phone call say hey, we have to make this happen, figure it out, you know, Cleveland Cliffs, Nucor, because the optics around this are bad. And I think that's probably what's going on. Quite frankly, I don't think either of these companies probably thrilled with the idea. But I think something happens along the way though. It's not going to be a straight line to 40. I mean there's going to be a day where headlines come out and it's back to 32. And I think that's the environment that you US Steel's in for, by the way.
- [26:53]
Frank Holland
You hope it's not going to be with Cliff stock, by the way. I mean that's a stock that's trading essentially at two year lows, even near five year lows. So again, this is not a company that has a lot of resources and a share price to use as currency.
- [27:06]
Melissa Lee
We have some very exciting news to share about a big event coming for all you die hard Fast Money fans. Today we are announcing what we are calling Fast Money Live. It's an event that will take place here at the NASDAQ on February 27th it is your chance to see the show in real life in Times Square at the NASDAQ market site. After the show, you'll stay for a Q and A session with me and all the traders on the desk. Tonight you'll raise a glass with them at an exclusive cocktail hour. Plus you'll be able to visit the Fast Money set and take pictures at our desk on your way out. We'll also give you a special commemorative memento only available to folks attending this event. And you'll get a six month subscription to CNBC Pro. Tickets are limited. There's only 100 of them.
- [27:50]
Frank Holland
Whoa, talk about a market squeeze.
- [27:52]
Melissa Lee
Go to that QR code you see on the screen or go to CNBC events.com fastmoney for more information. These guys will be on their best behavior. I hope that.
- [28:02]
Tim Seymour
No, absolutely not.
- [28:03]
Karen Feiderman
So what about your behavior, Mel?
- [28:05]
Melissa Lee
I'm always on my best behavior.
- [28:07]
Frank Holland
So I want to first of all, we've done live events before and they are some of the best events we've ever done and we enjoy this as much as the crowd does. So I'm psyched.
- [28:16]
Tim Seymour
I'm thinking of taking off scanning the QR code, although I have no idea and become the ends member. But people say quickly, how can we be part of the show? We so want to hang out with you guys and gals. Here's your opportunity on a silver platter. And I promise you it's going to be a lot of fun because the stuff that goes on in the breaks and after the show is worth the price.
- [28:37]
Frank Holland
What happens when this gets to StubHub and these prices actually like triple in the secondary market? Who knows? Not a lot of supply out there, you know.
- [28:44]
Melissa Lee
Got to go now and buy your own tickets. Yeah. Before the prices get jacked up. All right, coming up, major moves in pharma and biotech at JP Morgan's health care conference is underway. The M and A heating up that space and the company is kicking the weight loss drug competition into even higher gear. All that when Fast Money returns.
- [29:02]
Guy Adami
Missed a moment of fast.
- [29:04]
Frank Holland
Catch us anytime on the go.
- [29:06]
Guy Adami
Follow the Fast Money podcast.
- [29:07]
Frank Holland
We're back right after this.
- [29:19]
Melissa Lee
Welcome back to Fast Money. Stocks mixed to kick off the week. The Dow jumping more than 350 points. The S and P notching a small gain, but the NASDAQ posting a loss down about 4. 10 of a percent now on a four day losing streak. Chipotle lower again today. That stock hasn't seen a positive day in 2025 yet. It is now down seven days in a row its worst start to the year ever. Shares of some Medicare Advantage players jumping today. The Centers for Medicare and Medicaid Services is planning to hike payments to the plans by an average of more than 4% next year. We saw gains across the board in this space, including an elevance which is a holding of yours, Karen.
- [29:53]
Karen Feiderman
Yes, but generally for the space, I mean this was a positive surprise when they are not used to positive surprises. So that was really good also, I mean the whole space has been beaten down. So I think it's a little bit of maybe there's life there.
- [30:06]
Melissa Lee
Some more big moves as the J.P. morgan Health Care conference sets off a flurry of announcements. Moderna for one, sinking 17% after slashing 2025 revenue guidance by billion. The stock now back at lows last seen in the early days of the pandemic. Shares of neurological drug maker intracellular surging another 34% after Johnson and Johnson agreed to acquire the company for $14.6 billion. That would be the biggest biopharma deal in almost two years per FactSet and Gilead fractionally higher after inking a partnership with Denmark's Leo Pharma to develop a small molecule pill treating inflammatory diseases. Angelica Peebles joins us now from the conference in San Francisco where she's also been speaking with leaders in the obesity space. Angelica? Hey, Mel. That's right. And this year it's not just about weight loss anymore. We talked to two up and comers in the space about how the appetite is already changing. And Structured Therapeutics CEO Ray Stevens sees pills as one way to reach millions more people than you can with injectables.
- [31:05]
Frank Holland
There's this obsession right now with numbers. You know, everybody keeps trying to get the biggest number and I don't think that's the right place where people should be focusing on. It's really about the patient experience. So I think first, obviously you have to have efficacy, you have to have weight loss, but tolerability is just as important. You know, if you have a drug that people can't tolerate, they're not going to take it. So we look at tolerability and then.
- [31:27]
Karen Feiderman
There'S a third category that we think.
- [31:28]
Frank Holland
Is really important and that's accessibility.
- [31:33]
Melissa Lee
And Zeeland Pharma CEO Adam Steensberg says that his vision of a standalone Amylin drug is resonating with prospective pharma partners. Partners.
- [31:42]
Frank Holland
If you consider to get into this space, do you want to get into a space where you already have two.
- [31:46]
Julian Emanuel
Giants who are dominating within a category of glp? One based Therapies or would you rather.
- [31:51]
Frank Holland
Invest in what looks to be, you can say a standalone new category with the potential to be a foundational therapy. So it's super exciting to come in.
- [31:59]
Julian Emanuel
And lead in a new category rather.
- [32:00]
Frank Holland
Than compete in something that is that established as the current TLP1 based therapies.
- [32:06]
Melissa Lee
Both Structure and Zealand are out there looking for partners to bring their drugs to the market. So we'll have to see exactly what they're able to come up with. Mel, in terms of what analysts are saying are likely the likely partners for these two. Angelica, what are some of the names? You know, at this point we don't have exact names and you know, we try to ask but we don't have, you know, exact ones that are on their target list. But you think of some of the companies that are out there that, you know, haven't gotten into the space but haven't totally ruled it out. Think of Merck for example, they went out and did a smaller deal and then you have a company like Novartis will actually have boss on tomorrow, we can ask him about that where you know, they're not saying that they're out of it, but again they don't want to be in this, you know, obesity 1.0. They're already looking at what's the next thing. All right, Angelica, thank you. Angelica Peoples at a very busy JP Morgan health care conference. I think that the point that Ray Siemens is making about the experience, it has to be effective. But I mean if it's going to be 23%, you know, on an injectable versus a 20% on a pill, patients still might offer the 20% because that's very good, very effective, even 18%, but it's a lot easier.
- [33:13]
Tim Seymour
Well, what's, what's the skew, right? I mean what are people willing to sacrifice in order to do the ease and the stocks and to tell the story? I'll say this. Angelica had a great interview this morning early with Daniel Day from Gilead Georgetown, standing all day by the way, telling a great story. I mean they were the victim of their own success for a long time but now making acquisitions, making investments, you know, I think Gilead looks really interesting here.
- [33:35]
Guy Adami
You know this Moderna is such a sad story. And when you think about today's losses, it's going back to like five year lows to your point. And you know this is a company that actually has a lot of cash. They are just losing so much money. I think they're going to do a little over than $3 billion in revenue this year and they're losing more than $3 billion in net income. So you say to yourself, so how long, how much longer is that cash going to stick around? I don't know what their IP is worth or anything like that. When you're losing that much money that quickly. It's just a sad story.
- [34:01]
Melissa Lee
$16 billion in cash. They lose about $1 billion every quarter. They've already cut back, they've announced more cost cutting. They cut back on R and D which is probably not where you want to hear a company like that cutting back on.
- [34:12]
Karen Feiderman
Right. Just remember though, in the, you know, the depths of the of COVID the stock traded up near 500 I think. And I think Vancel actually insiders did a very good job of selling stock which I mean I know it was sort of unexpected windfall of crazy amount but God, the fortunes of this trading. So I wouldn't, I still wouldn't touch it here. Doesn't matter the trade there.
- [34:39]
Frank Holland
And this is what's Dan's bringing up a great point. I was looking at that today too. 13 billion, 13 billion in market cap after this move and roughly 9 billion in cash or short term receivables levels. But that money's going fast and again you look even at the money that Pfizer threw almost $30 billion to to kind of make the take the next step after after Covid Moderna doesn't even have that. So be careful.
- [35:00]
Melissa Lee
Be sure to tune in to Mad Money tonight for even more exclusive interviews from the JP Morgan Health Care Conference. Jim is chatting with the CEOs of Medtronic, Boston Scientific and Bristol Myers. Catch all the interviews top of the hour right here on cnbc. Coming up, New year, new acronyms. Yep, it's time. The traders are laying out their 2025 picks and the words they hope will carry them to fast Money glory. Tim and Dan, stock picks next. Fast Money's back in two. Welcome back to Fast Money. It is time to reveal this year's fast money trader acronyms. We have been asking the traders to make an acronym of their trades to watch for the year here. First up, Tim. The 2024 acronym of course is Blythe Alibaba Lyft, the International Dividend ETF, Chevron, Estee Lauder, PayPal. Estee Lauder was the biggest issue problem. They're taking 48%. You ended the year in second to last place up 0.1%. If you left the L out which you added into the game, you'd be up almost 3%. You'd still be in ninth place. Place for which really.
- [36:11]
Frank Holland
Wow, that's tough.
- [36:12]
Karen Feiderman
Which only eight of us.
- [36:16]
Frank Holland
Nice job there.
- [36:16]
Melissa Lee
Which acronym do you have for 2025?
- [36:19]
Frank Holland
All right, so this is. This is banned. Okay. This is going to be a super group, much like Toto or Travel. I mean, Traveling Wilbur is not Toto, but, you know, this is a group of super companies. I mean, this is a dream team to me. These are companies that are all. I think you're not taking a flyer on a company like Lyft or whatnot that might be great someday. These are all great companies. The question is, are they going to get back to their glory? So Boeing, we know this story over and over again. This is a story where the cash flow is not going to come at 25, but if we get a sniff of it coming in 26, the stock's going to move significantly higher. AMD, we know where they sit. At least it's a distant second. But when you talk about what's coming into the pipeline and these guys. And again, we're talking about the AM I 400 and the 355 is major catalysts, I think for a company that really underperformed their peers in 2024. And again, that's part of my rationale. In any acronym, I want underperformers. I want companies that I think again, a little bit of move higher takes them a lot higher. The end is Nike. Five year lows. We know a new CEO, we know it's not going to be fixed overnight. This is best agreed at a time when I think the valuation is starting to make some sense. And I think there's a turnaround coming. D is Diageo again. We've done this news over the last couple of weeks about headlines around alcohol. Tell me there's no question in a world of spirits companies, this is. Is a blue chip. This is one of the best trades. 25% to its historical. This is banned on the run guy. It's not Band Aid, it's banned on the run.
- [37:39]
Tim Seymour
Which by this a great wing song.
- [37:40]
Frank Holland
Great wing song.
- [37:41]
Tim Seymour
Yeah. Karen like. No, actually, you don't like that song like that.
- [37:44]
Frank Holland
Yeah.
- [37:45]
Melissa Lee
Thank you for abiding by the rules.
- [37:46]
Frank Holland
For one, I'm one of the few. I may have come in in last place for the last five years, but I tell you what.
- [37:53]
Melissa Lee
All right, let's get to Dan here. 2024's acronym was ZEBRA. You ended in last place, down 2% for the year. Zoom. Electronic Arts, Alibaba, Rivian Applied Materials Rivian was the only negative name sinking more than 43%. You're going to keep on betting on a couple of these. You got some of these rolling over 2020.
- [38:11]
Frank Holland
Really?
- [38:12]
Guy Adami
Tim said, Tim said the band is a bunch of great companies. This is a bunch of crap companies.
- [38:16]
Melissa Lee
Whoa.
- [38:17]
Guy Adami
Okay, I want to be really clear one way. This is a game, right? It's a game.
- [38:20]
Melissa Lee
Okay. The biggest percentage moves in the year.
- [38:22]
Guy Adami
So I'm just playing a game here. So mine is Gen AI. And if you think that this trade has some legs, it's going to take all the crap with it eventually. So maybe that's this year in 2025. Global Foundries Ugly redheaded stepchild.
- [38:36]
Frank Holland
Whoa, you can't do that.
- [38:37]
Diana Olek
Really?
- [38:38]
Frank Holland
Well, you just did.
- [38:39]
Guy Adami
There's no redheads that were hurt in this acronym. But Taiwan Semi obviously is the leader there. Ea, I think this is a company that's going to really, you know, really integrate generative AI technology into their offering. It's in the game. And xpi, this is a company, a semi company that has not done particularly well. It's in the industrial space they're talking about, you know, how they're going to use this technology and then aim at. I'm sticking with this one here a little bit because this is trading near 52 week lows. It's a reasonable valuation. And again if we're going to see the build out of these data centers, that means you're going to be more chips making and those are going to be the main ones. And then lastly Intel. I don't really need to say anything here. Ultimately maybe they're get something right and this thing starts to work. But again, it's a game. Let's see, most of these are.
- [39:21]
Frank Holland
Sounds like he's already kind of like coming up with excuses.
- [39:24]
Guy Adami
What am I going to do?
- [39:25]
Frank Holland
Like this is the acronym Game man.
- [39:27]
Diana Olek
This is.
- [39:27]
Guy Adami
I mean I just call it a game. I just call it. In fact, I mean you'd be kind of a moron if you picked five stocks that are at all.
- [39:33]
Frank Holland
When people come watch our show live and actually come. We're going to talk actually we're going to sit, we're going to go through your exciting new one.
- [39:39]
Tim Seymour
Well, I have a great one this.
- [39:40]
Melissa Lee
Year that's a teaser.
- [39:43]
Karen Feiderman
Okay, well I sort of, I totally get what you're doing, which is what I did with the stock draft, which for me is just a shameless plug for Brianna Stewart. Great player in the Liberty, but which was go big, go levered, go crappy and hope for the best in the acronym though I feel like what's a portfolio? That could work. Not what's a. You know, you could end up with zero or you couldn't. So am I off in the. In the understanding of it?
- [40:08]
Frank Holland
Just as long as you play it the right way. Karen.
- [40:10]
Melissa Lee
Exactly. That's the most important thing which I know already. She has not. That's another.
- [40:15]
Tim Seymour
She's a. Larry.
- [40:16]
Melissa Lee
That's right. A special dispensation coming up the headlines that had Macy's and Howard Hughes heading in very different directions and how you should play the pop and drop more fast money into. Welcome back to fast money. Shares of Macy's plunging on a weekend holiday shopping forecast the company saying expects net sales for the fourth quarter to be near or below the low end end of its previous guidance range. Comp. Store sales so far this quarter just about flat. The company also announcing the closure of over 60 more stores. Time to check out of this one guy.
- [40:53]
Tim Seymour
No, I actually think it's time to maybe go through the front door. It traded two times normal volume. It's the lowest we've seen in quite some time. I mean I don't think that that's necessarily the story. There are other stories around this and I do think at some point maybe somebody steps up to the plate. So I wouldn't be running too far from Macy's here year.
- [41:09]
Frank Holland
It all depends on where you think this valuation is based upon this guy because it based upon the business they've had for the last year. This is a really cheap company. If you think about also the real estate assets and you think about the private equity interest. I think it's an option worth having. I'd love by the way to see what guy would go buy if he walked into Mason.
- [41:26]
Tim Seymour
I went to Mason years ago.
- [41:27]
Guy Adami
This seems like a parade of mis. How does private equity buy this? The 4. $4 billion market cap and nearly $6 billion in debt that.
- [41:36]
Karen Feiderman
Well, I don't know. I always find the shrinking to the shrinking problematic.
- [41:40]
Frank Holland
Right, of course.
- [41:45]
Melissa Lee
Or footprint.
- [41:46]
Karen Feiderman
It is inexpensive though and the balance sheet has been cleaned up a lot. That that's in the plus column. I mean look, Nordstrom's doing it. Maybe there's a market now.
- [41:53]
Melissa Lee
All right. From a drop to a pop tick. Look. Shares of Howard Hughes. The stock soaring nearly 10% on news that Bill Ackman is offering to take the company private private for 85 bucks a share. That's an 18% premium to Friday's close. And a letter to the board. Ackman said his Pershing Square Capital would create a new entity that would merge with a real estate developer. Pershing already owns roughly about 38% or so of the company. He wants to create a Berkshire Hathaway. He says that those kind of interesting care that notion.
- [42:20]
Karen Feiderman
It is kind of interesting. I mean, you know, he's been in this for a long, long time. He said some enormous hits that that structure would take a lot. He's allowing people to roll in to be with him if they want to. That's sort of interesting thing. I haven't bought it, though.
- [42:34]
Melissa Lee
Hmm. What do you think?
- [42:35]
Tim Seymour
I think it's. I think it's an interesting thought by him. I mean, this gives him an opportunity, gives, I don't want to say a shell, but in a vehicle to sort of build something. He's still young enough to do it. So I don't know if you have to run out and buy the stock, but I do think it's an interesting play by him.
- [42:48]
Melissa Lee
Berkshire or this new entity.
- [42:52]
Frank Holland
Well, I think we have to go apples and oranges here, as you, I'm sure, would be implying, but I think Berkshire and I think if you look at a year where the energy assets in this, in Berkshire really kind of underperformed on some level, I actually think it's a year where energy will outperform. And I think it's some of this as a function of valuations, free cash flow, some of the acquisitions. And layering deeper into these trades is what he's been doing. I like that.
- [43:15]
Melissa Lee
Up next, final trades. Another reminder. Do not forget to sign up for Fast Money Live. An exclusive chance to see the show in person here at the Nasdaq MarketSite on February 27, including a Q and A session with me, the traders, an exclusive cocktail hour, six months of CNBC Pro and much more. Tickets are limited. Click on the QR code you can see on your screen or go to CNBC events.com/fast money for more information. We are hearing that some people are having trouble with the log. There is a technical issue. Please try again. Tickets are on sale. Yep. Time for the final trail. Let's go around the horn. Tim.
- [43:52]
Frank Holland
Yeah, much like the Fast Money event band is going to be rocking this year. And I think think this is, this is the story. Look at those names.
- [44:00]
Guy Adami
Boom.
- [44:01]
Melissa Lee
Dan.
- [44:01]
Guy Adami
Yeah, Jenny. I wouldn't buy it. It's this game here. But I do think it's going to be important from a sentiment standpoint. If these stocks start to work, we're going to be in a full on Mania.
- [44:10]
Karen Feiderman
Karen yes, and a gigantic sell off on what I think was really not news that would warrant that. So I actually bought some, you know.
- [44:18]
Tim Seymour
As Day one in Savannah, Georgia, Barbara De Haven never misses a show celebrating her birthday. Happy Birthday.
- [44:25]
Melissa Lee
Happy Birthday, Gilead thank you for watching Fast Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer Global markets up.
- [45:12]
Frank Holland
To the Minute, Front Page News, Wake.
- [45:14]
Guy Adami
Up to Frank Holland and Worldwide exchange weekdays 5am Eastern, CNBC live Ambitiously.