← CNBC's "Fast Money"
CNBC's "Fast Money"
Intel On A Tear Ahead Of Earnings… And Trump’s Fed Chair Nominee On The Hill 4/21/26
00:43:36
Shares of Intel in rally mode, as the tech stock climbs 80% this year as investors eye its next earnings report on Thursday. The reasons behind the move, and why Wall Street is jumping on the band wagon. Plus United Airlines reports results, the Chartmaster hits Apple’s technicals on the back of its leadership shift, and all the headlines out of Fed nominee Kevin Warsh’s hearing on the hill. Fast Money Disclaimer
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- [00:00]
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- [01:01]
Melissa Lee
Live in the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. The cease fire extended markets turning higher after hours. The latest out of Washington, what it means for stocks when trading opens tomorrow. And all eyes on United Airlines. We've got the headlines from the carrier's latest earnings report and how jet fuel costs will impact its outlook. Plus love for intel ahead of its earnings. What is next for Apple after Tim Cook steps down and back on target market. The retailer quietly climbing to more than 52 week highs. How much farther can the T in Timbo run? We'll get some thoughts forever maybe from Timbo himself. I'm Melissa Lee coming to you live from CDP at the nasdaq. On the desk tonight, Tim Seymour, Timbo Carter Worth, Dan Nathan and Guy Adami. We start off with that breaking news in just the last hour. President Trump saying the US Will extend the cease fire with Iran until the country's leadership submit a new peace proposal. Our Eamonn Jabers is at the White House with the very latest on the Middle East. Eamon.
- [01:59]
Eamonn Javers
Yeah, Melissa, it's been a busy afternoon here at the White House. We've had basically hot and cold running motorcades over here on West Executive Drive. A lot of activity, not a lot of communication from the White House throughout the course of the afternoon. But then we got this social media post from the president. You just referenced it. He said, we have been asked to hold our attack on the country of Iran until such time as their leaders and representatives can come up with a unified proposal. I have therefore directed our military to continue the blockade and in all other respects remain ready and able and will therefore extend the cease fire until such time as their proposal is submitted and discussions are concluded one way or the other. So, Melissa, generally speaking, a cease fire is an agreement between two parties to stop firing. What we have here is a unilateral extension of that ceasefire. No indication from the Iranians that they are going to participate in in a ceasefire. We'll see how they react. Just before we saw the President's post on social media, we did have a statement from Iranian social media saying that they would not participate in talks in Islamabad. There have been a lot of question about that over the past 24 hours. Vice President J.D. vance was apparently at one point ready to get on a plane to go to Pakistan to conduct those talks. But the Iranian side never signaled their participation. And then finally today it said they wouldn't participate at all. And so now the question is, how long does this unilateral ceasefire last? Can it really hold if the Iranians don't agree to it? And what is the President talking about here when he talks about this idea of another proposal expected from the Iranian side? Is there a document incoming from the Iranian side that the US Is expecting that might lay out some terms of the negotiation? The Iranians have said today that, that they won't negotiate in a situation where there are threats and threat of force and they won't negotiate in a situation where there's a blockade. The President has said he's going to maintain the blockade. So that leaves you with an open question about how all this can get resolved. Melissa.
- [04:01]
Melissa Lee
And of course, there is the element of what the President said this morning on Squawk Box about resuming bombing of Iran to throw into the mix.
- [04:08]
Eamonn Javers
Yeah, he said he expected to resume bombing of Iran, but that was this morning and this is now. And now he's saying no, he's going to extend this unilateral cease fire. So that seems to be an indication. Now, if you want to sort of read the nuance here, maybe this is the President going halfway toward what the Iranians were saying. They said we won't negotiate in a situation where we're under the threat of force. Well, the President has just unilaterally extended the ceasefire. So maybe that extension creates room now for the Iranians to come to the table. He didn't go all the way because they also said they don't want the blockade to be in place. He says that will remain, but it is movement toward the Iranian position, if you look at it that way, from the president.
- [04:54]
Melissa Lee
Right, Eamon. Thank you. Eamon Javors keeping abreast of all of the developments out of Washington D.C. what is clear though is that the strait will remain blocked. And from the market standpoint, that is probably the most consequential outcome of this. He said, she said, geopolitical drama that we're in right now.
- [05:11]
Tim Seymour
And if you look at the VIX and if you look at measures of risk, I mean, the market's certainly not pricing in that we're out of this. But I think the market is also not really pricing in cease fire. And in fact, I think we're at levels in terms of volatility measurement and this is a very broad measurement and there's different ways to measure it. But I do think that the view is that there's a lot of complacency here every day that goes on. What you hear oil traders talk about is seeing less demand, the dynamic of what, what is truly happening below the surface, what's going on in terms of commodity prices that are, you know, a byproduct of oil products. So it's, it's to me a situation back to where the markets are again, you're talking about a almost 17% move in the NASDAQ and outperformance also over the S and P. A sign that you should be reaching out and grabbing growth. No, I mean, look, I, A lot hasn't been agreed upon. Israel, Lebanon, still kind of a tinderbox. And I do think oil prices remain high.
- [06:08]
Melissa Lee
Dan.
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Dan Nathan
Yeah, I mean, listen, the blockade, of the blockade is probably doing more damage to our allies and those in Asia in particular. Right. And so to Tim's point about lack of demand that you're seeing on oil, just wait. If you can't get some of these byproducts to Asia that make or help make semiconductors. If you think a bottleneck in oil in the Strait of Hormuz, where 20% of the daily oil is supposed to flow through there, if you don't have these chips being made and they are not being shipped around the world, then all that CapEx that's driving so much growth here in the US is going to slow down. I mean, they're going to have to slow down. Right. If you can't get the chips that go into the servers, that go into the data centers that train the models and that's the reason why they're raising all this money and it's supposedly creating a whole heck of a lot of productivity, but also activity, economic activity that could be a problem. And that's how you can say that we're energy independent. But if that comes back to hurt us in a prolonged sort of blockade without a cease fire, then you do see a material global growth scare.
- [07:07]
Melissa Lee
Taiwan is not energy independent. South Korea is not energy independent. And that is where those chips are being manufactured right now.
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Timbo Carter Worth
The president's going to be in China, I think a month or so from now. I mean, does Taiwan become sort of a pawn or a chip in this whole game? You know, not that I'm not sure the technicals matter for the S and P, but I'll throw it out there. It's great having Carter on today. New all time high in the s and P500 earlier they closed on the lows. Technically we have what we call an outside day. Obviously today's high higher than yesterday's high, but we closed lower than yesterday's low, which theoretically should mean something. Tim's point about the VIX is well taken. I think the VIX is too low here, but it's been creeping higher over the last week or so. So again, if technicals matter, if this, whatever salvo happened in the aftermarket is in market moving, then today could be one of those days we look back upon.
- [07:56]
Guy Adami
I mean we've recovered to a former high and in principle you it's hard to move through that. So backing and filling here, perfectly normal. But crude is really the story. To go from 65 to 120 and then to pull back to essentially 90, it's a 50% retracement and it's just stuck here. Meaning this is the proper price in the market. There are all these. It's going to 200, it's going to 250. Hasn't happened. It's going to go back to 60. We've surged from 65 to 120. We've fallen to 90 plus minus. And I think we just sit here. Crude is an instance where you bet against volatility.
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Melissa Lee
We sit here though and this is still too high. I mean a lot of the analysts out there forecast, you know, if oil stays for the US WTI oil says between 70, $80 a barrel over the foreseeable future, then we, the markets can handle it. We're fine. But if this is in fact, if your chart work is where it's at, Carter and 90 is it, that's bad news.
- [08:49]
Guy Adami
Well, it's not going to stay forever as this gets resolved at some point. But I mean just remember this, the crude oil adjusted for inflation, the same level was in 1984. Right. So crude cost as an input to all manufacturing is much lower than it was 90s high. But it's not what it could be.
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Tim Seymour
Look, I know the US consumer runs the world, but we had retail sales numbers that showed that the US consumer is fine. We've done our fresh math calculations in terms of how much gasoline is the overall spend and we know it's not really, it's a big deal, but it's not that which is going to push us into recession overnight. I do think though we are underestimating the knock on effects and the demand dynamics. And I think whether, you know, whether it's the tech world or whether it's the industrial world, I think we are seeing demand destruction right now. And I think this can't go on
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Tommy Show
as it is right now.
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Dan Nathan
Yeah, industrial world. I mean, you guys saw ge, right? And you saw it fill in that entire gap going back from two weeks on the guidance that they gave. And you know, I think industrials in general and those exposed to defense, you know, this has been a story that should be working. And those stocks had not been working actually since the war had started. And when you see this sort of activity in a group like industrials, I think it's got to get your antennas up a little bit. So we spent a lot of time talking about tech, but there's some other things going on in the market where I think maybe we're a bit too complacent watching. Stocks like Caterpillar obviously don't have any exposure. Right. To defense. But some of these.
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Guy Adami
Yeah.
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Dan Nathan
And they just, they look like they cure cancer. They look like they kind of sell into data centers, that sort of thing. And that's not particularly normal I think at this stage in the market.
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Melissa Lee
But I mean. Okay, so what do UNH G Aerospace, 3M Northrop Grumman have in common?
- [10:28]
Timbo Carter Worth
This is a rhetorical question because if it's an asset question.
- [10:31]
Melissa Lee
Okay. They all beat.
- [10:33]
Timbo Carter Worth
Yeah.
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Melissa Lee
And they reiterated their full year guidance. So they did not raise their full year guidance by as much as they beat. So earnings season is great. Earnings season is great. But the outlook is so cloudy.
- [10:44]
Guy Adami
Yeah.
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Timbo Carter Worth
And I think, and I think my instincts suggest the market might give companies a pass given the murkiness that we find ourselves in. But your point is well taken. Beat and raise has been the thing. Beat and basically in line guidance. I'm not certain that's going to be an environment that is sustainable. Sustainable now given the uncertainty. Long term, not so much.
- [11:03]
Tim Seymour
Yeah. We're going to talk about Airlines. And I'll just say this, I mean, unh beat and essentially hitting guidance or estimates is a very unh story. That is a reason why you'd be rallying unh, not necessarily some of the other industrial names and, and agree. I'm not sure Caterpillar is supposed to be making fresh ice here.
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Melissa Lee
Right. For more on how macro risks are impacting markets in the banking sector in particular, let's bring in Tommy Show. He's the CEO of kbw, a Stifel company. Tom, great to have you with us as always. Great to get your insights. We've pretty much gotten through bank earnings season. We've gotten a very good message from bank CEOs in terms of the health of the economy and the health of the consumer. As one yourself, what is the asterisk as we sit here and there is more uncertainty about the war and where the cease fire talks are going?
- [11:47]
Tommy Show
Well, first of all, I would like to reiterate what you just said, which is the quarter was very, very good. It was fantastic actually. And really, if you're talking about all these macro risks, you immediately want to go look at credit quality. Credit quality was spot on, excellent in the quarter. There've been no big headlines that have happened so far and, and so credit quality is good and it's really pretty much everywhere, including the consumer. The credit card companies all produced earnings in line or a little bit better, both in terms of delinquencies as well as usage of the cards. So, so the feeling is whatever the risks are, they weren't in the numbers on March 31st, that's for sure. And the banking industry had a very good quarter.
- [12:29]
Melissa Lee
So you're feeling good despite this uncertainty. Every headline is we don't know that
- [12:35]
Tommy Show
we can study and control and whatever impacts the banking industry, I mean, whatever happens on the macro side, it won't be just the banks, it'll be everything you were just talking about. So. So look, the economy matters. If you had said to me eight weeks ago, what are things I might worry about that could go wrong? $100 oil and a military conflict in the Middle east would have been on the list.
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Timbo Carter Worth
So.
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Tommy Show
But to date, the resilience has been remarkable both in the markets and in the economy. And really there's nothing we're hearing from the banks that are telling us even private credit has all been, I think the credit quality and private credit's been perfectly fine in the first quarter.
- [13:13]
Timbo Carter Worth
Yeah, I know, Tom. Before the show we were talking that just the power, the importance of passive investing, which is something that you see. I mean that's great on the way up, everything gets sort of raised up and. But when passive becomes active, it's never active going up, it's active going down. Is there anything on horizon that suggests one the precipice of something like that?
- [13:33]
Tommy Show
We can't see it. And we also think that, that the headlines that are happening out of the macro issues out of the Middle east are missing. Some are causing some other really big things not to be on the front page. For example, there's a massive regulatory reset happening right now. And I think what's happening in private credit is not a credit story. I think it's a growth story. There's no way in my opinion the next five years, I think growth will be like it's been in the last five years for this sector. And I think there's a whole reset happening in financial services with the fintechs getting bank charters. And I think what the financial services sector looks like in five or 10 years is actually really exciting and there's a lot happening every day in that
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Tim Seymour
sector and I'm excited and I think excitement, it translates into higher multiples, multiples and deserved higher multiples. I mean deregulation and that tailwind and I guess I would ask specifically because I get pushed back when I say this, I think European banks have a better tailwind from deregulation than US banks because of where they're coming from. And I own a lot of European banks in my.
- [14:38]
Tommy Show
I'll tell you our analyst is making a very solo call at the moment. We were nervous that the UK budget gap is going to be cut but by taxing the banks more so we're out with actually a cautious call in the UK banks generally. I would agree until I read that note this week by the way from our firm.
- [14:55]
Tim Seymour
How about valuations though for the sector? Because again we've had a 20% off the low.
- [15:00]
Tommy Show
So you know, so we were talking earlier about the market and so the stock market's at an all time high essentially in most of the indices. There are a lot of banks out there. One of our favorite ideas is citigroup trades around 130 of tangible book value. The stock trades at a very low P E multiple, let's say around 10 times. They're having an analyst meeting on May 7th. We think they're going to change their guidance for their profitability target. And I'll tell you there's a theme that's happening in the banks right now is the return on tangible capital is driving an outcome on price to tangible book and our three favorite stocks this at this moment are Citigroup and Key Corp and Citizens Financial. We think those three banks have very steady predictable improvement in profitability stories. The stocks in some cases even still have big dividend yields. They trade at good valuations relative the book and good valuations on a P E. So if you do get a market sell off it's not like these things are in rarefied air from a valuation perspective.
- [16:03]
Melissa Lee
Tom, it's also always great to see you. Thanks for stopping by.
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Tommy Show
Great to be with you.
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Melissa Lee
Thank you of kbw by the way
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Timbo Carter Worth
Steve has done a great job as well and Tom's great to have. Glad he brought up Citi. We've been talking about that in a similar vein and you know Jane Fraser's done a great job and if the metrics on the 7th are better than the street was looking for if they can sort of approach where JP Morgan is on the metrics he mentioned then one and a half times price intangible book might actually be too cheap for
- [16:27]
Guy Adami
letter C. I mean she's the best looking bank, right? It's the only one that didn't violate its 150day. It's always the sort of it's a troubled bank, it's cheap, maybe cheap for a reason but in terms of the banks overall it's important to say that the case index is beating the market on a one and two year basis but on a five and ten year basis it's trailing by almost 50%. So either that's a catch up opportunity or it's what value traps really are that they're cyclical, they're dangerous if things get dangerous. Right? That's the nature of lending and my hunch is it's an equal weight. I don't think that banks as an investment can be held long term. They're trading vehicles.
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Melissa Lee
Let's turn out to intel the chip maker going warp speed into Thursday afternoon's earnings trading on your levels not seen since the turn of the century and only now are analysts jumping on board. This morning HSBC upgrading Intel to a buy from a hold sloppy. A New street high $95 price target on the chip maker RBC also saying CPU demand should set up a beaten race scenario while BNP Paribas upgraded the stock to a neutral from underperform yesterday. So why all this bullishness now after Intel's torrid run and before earnings, what do you think? Is this too much ahead of earnings?
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Dan Nathan
I think we've seen this over the last year, you know, this kind of rolling bullishness in different parts of the kind of server, you know, infrastructure. And you know, we just have spent a lot of time talking over the last six to nine months about memory. And so the CPU story was one that really started to kind of take hold. You know, I want to say six months ago, maybe nine months ago, when Nvidia took an investment, this right after the government did in Intel, I think a lot of us thought that was a bit curious. But when we've kind of seen this, you know, story about custom silicon and now we're seeing CPU and clusters there for inference, I guess the demand story finally is catching up to the product that intel makes. And so, but you tell me 70% in a month. I mean, I think it's discounting a lot of good news here. I mean it's not, you got to go back a very long time to remember intel trading like this.
- [18:29]
Melissa Lee
These analysts though are putting forth the S word when it comes to the story. Shortage shortage has driven Western Digital Seagate to new highs in today's session. I mean, that is the key here to the ones that have been able to sustain their runs. Now they're saying CPUs will be in short.
- [18:45]
Tim Seymour
And I think that's probably right. But I mean, talk about shortages. How about some supply chain? How about production for them? They can't ramp up production right now. I think they're in a really difficult position. Let's not forget this is going to be. EPS is going to be down 90% on an adjusted basis and you're going to see revenues down on the quarter sequentially. So I think the S is strategic. I think this is. People feel like this is Chip USA and there's a lot of people that want to get behind this company and I get it and I think it's probably in the best interest of this country. But the valuation makes zero sense. I think it's going to be disappointing.
- [19:18]
Guy Adami
I mean, a hell of a bounce as they say. The question is, I mean it's still below its dot com peak, which means here too, adjusted for inflation, like oil things, still down 60, 70%. Why? Right. This was the great one and now it's like the one that can't maybe now come to light, but can't. This dog won't hunt my hunches.
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Timbo Carter Worth
You faded dog. One hunt.
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Melissa Lee
And here too. Carter's the only man on this network who can use here too.
- [19:43]
Timbo Carter Worth
Yeah, he does it extraordinarily well. So not that anybody seemingly cares about valuations but Intel's about three times the price to earnings of Nvidia and less than half of the gross margins of in video. So you explain to me and listen maybe they have figured it out but it's all about data center in my opinion and they have not seen at least over the last couple of quarters a meaningful acceleration yet.
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Melissa Lee
Look at how the Ford PE is to going compare.
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Dan Nathan
Yeah it's coming up a low base. Obviously they were losing money not too
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Tim Seymour
long ago but well the cheaper Nvidia gets we sell it and the more expensive intel gets we buy. It's like a commodity company.
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Dan Nathan
Well you guys know what happens to dogs that don't hunt, don't you?
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Timbo Carter Worth
What happens?
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Dan Nathan
Oh not good. No, not good.
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Timbo Carter Worth
You have a dog. You have a dog that's the size
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Dan Nathan
of like a rat Chris, that hunt that dog. I mean not good.
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Melissa Lee
We got to go.
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Dan Nathan
Not good.
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Melissa Lee
Coming up we are watching. Watching. United Airlines on the move after reporting the details numbers of their latest quarter. That is next. Plus the jump in unh after its own earnings. The traders take on Tesla ahead of results tomorrow. And the Chartmaster slices into Apple's technicals on the back of last night's big news. What he sees in store for the tech giant in its post Tim Cook era. Do not go anywhere. Fast money's back into.
- [20:57]
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- [22:10]
Melissa Lee
welcome back to Fast Money. United Airlines shares are higher, just under a percent here despite beating top and bottom line estimates for the first quarter. CNBC's Phil LeBeau has got the details here. Hey Phil.
- [22:21]
Phil LeBeau
Hey Melissa. This is all about jet fuel costs, not just for United but for all the airlines. So let me go and run down essentially what we heard from united with the Q1 results that came out after the bell. As you mentioned, they did beat on the top and the bottom line. Look at the fuel costs up 12.6%. Basically $340 million more in jet fuel costs compared to the first quarter of last year. Pre tax margin came in at 3.4%. The demand side is what so many people are questioning. Are people still booking trips? Well in the first quarter it didn't slow down at all. Look at the revenue in terms of each of the classifications for the tickets that United sells, whether it's domestic, international, premium, corporate. They were all up double digits. So there's still demand there and they are not seeing it slow down. None of the airlines are even though they have raised fares along with jet fuel prices. As you take a look at shares of United, a couple of things to keep in mind. They are making their second half capacity come in flat to up 2% versus planned on a normal year you would see that be higher than flat to up 2%. But this is the prudent move to do in relationship to you're not really sure what's going to happen with jet fuel prices. You want to limit capacity growth. Q2 EPS guide of a buck to two bucks a share. The street right now is at 208. I wouldn't put a lot into that. The street estimates have been coming down dramatically and they're all over the place. And then the EPS guide for full year earnings between 7 and $11 a share. Previously they were at $12 to $14. So yes, they have brought it in a little bit but that wide look between 7 and 11 they're not entirely sure what to expect from jet fuel aside from the fact that it will be higher for longer. So that's why you have a wide guidance there. Don't forget tomorrow morning, Melissa, we're going to be talking with United CEO Scott Kirby first on CNBC. We'll talk about the Q1 results and yes, we will talk about his suggestion to the White House which the President today on Squawk Box said is not in his, in his opinion a good Idea, the idea of perhaps United buying American.
- [24:31]
Guy Adami
Mm.
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Melissa Lee
Phil, thank you, Philippeau. What was interesting was in the numbers first crossed, the stock took a dip lower and now they're sort of firming up around, up 1% here. What's your take on, on the results?
- [24:42]
Tim Seymour
Well, the guidance, the cut on EPS was, was shocking, right? Except for the fact that it wasn't really shocking. And what's interesting is that airlines, the stocks responded more on the fear of what your jet fuel prices would do. One of the things they said is that they will recover most of the price increases in jet fuel by the third quarter if they can extract 70 to 80% of that cost. Means pass it on and let's see what that means to demand. But I just think this also juxtaposes to Delta and Delta who talked about the trainer refinery adding, you know, 15% or 20, 20% ultimately of their fuel and how they can be more resilient. I think it's never been a time to look at the highest quality airlines. United is one, but you know, I think Delta is a higher quality player.
- [25:30]
Melissa Lee
And so far the higher margin seats, they're, they're doing well. I mean in terms of growth year on year. Premium seats for instance, up double digits.
- [25:36]
Timbo Carter Worth
And they're going to rate to Tim's point. 70, 80% of the recovery of fuel costs are going to come into form affairs by the third quarter. So buckle up. No pun intended. The other thing that I took away from it, by 2028 they're going to take another 250 new planes at United, which is fantastic because I've been on some of those planes. And not that it bothers me a little bit.
- [25:57]
Tim Seymour
You ever sneak through a flight without your buckle on?
- [25:59]
Timbo Carter Worth
Guy like Tim? I don't do that. Don't bother. You know why? Because I'm being safe for the other flyers as well. I'll be on a plane tomorrow, in case anybody cares. No, I get in my, I, I put my ass in the chair. Whoa, whoa, whoa. I put my seatbelt on. I stare straight.
- [26:15]
Dan Nathan
That will be.
- [26:16]
Timbo Carter Worth
And I don't move.
- [26:17]
Guy Adami
Yeah, and apparently that's called middle seat, the aisle seat.
- [26:20]
Timbo Carter Worth
Wherever seat I'm in, I'm happy. And it's called raw dogging.
- [26:24]
Melissa Lee
I don't know what it's called. Crazy. All right, there is a lot more fast money to come. Here's what's coming up next.
- [26:32]
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- [28:26]
Melissa Lee
Welcome back to Fast Money. Stocks falling today as oil ticked higher, the dow falling nearly 300 points, the S and P and NASDAQ both dropping more than a half a percent. WTI crude selling above $92 a barrel. Shares of UNH jumping nearly 7% after topping earnings and revenue estimates this morning. The insurer also hiking its 2026 profit outlook as the company better manages high medical costs and streamlines its operations. Today's move erasing the stock losses for the year and Tesla lower ahead of its earnings report tomorrow. Investors watching for more information on the Cybercap timeline, insight into its Austin tariff facility and a 15 chips, as well as signs of stabilization in automotive margins. Annual revenue fell last year for the first time ever. Tesla stock down more than 14% so far this year. What will we be watching for?
- [29:17]
Timbo Carter Worth
Tesla?
- [29:18]
Melissa Lee
Yes, margins.
- [29:19]
Timbo Carter Worth
Auto margins. I mean, they promise us better, Mark. They promise us a reacceleration margins. I think a year and a half, two years ago, it happened for a quarter. It hasn't happened since. But you know what, I even know if that matters anymore at this point. I mean, that to me is like, that's yesterday's news. I think people are excited about Space X and what it potentially mean for Tesla. So to the extent that it gets brought up, that's going to be the thing that I will listen to.
- [29:41]
Melissa Lee
All right. Meantime, Fed Chair nominee Kevin Warsh facing lawmakers on the Senate Banking Committee today where he suggested the central bank needs a new framework to deal with inflation. Steve Liesman's got the details here. Hey, Steve.
- [29:55]
Steve Liesman
Hey, Melissa. Yeah. Fed Chair nominee Kevin Warsh getting strong support from Republicans, but undergoing sharp questioning from Democrats about potential conflicts of interest from his vast holdings. Democratic Senator Warren accusing Warsh of being President Trump's sock puppet who would later who would lower rates at the behest of the president. That led to this exchange later with Republican Senator Kennedy.
- [30:17]
Tim Seymour
Are you going to be the President's
- [30:18]
Senator Kennedy
human sock puppet, Senator? Absolutely not.
- [30:22]
Tim Seymour
Are you going to be anybody's human sock puppet?
- [30:25]
Senator Kennedy
No, I'm honored. The President nominated me for the position and I'll be an independent actor if confirmed as chairman of the Federal Reserve.
- [30:34]
Steve Liesman
Warsh declined to say if lowering rates to 1% as the President has demanded, would cause inflation, has said that tariffs have not caused inflation.
- [30:44]
Senator Kennedy
We ask ourselves whether the generalized change in prices is having second order effects on the economy. Again, they're not where they should be, but I think that the trend is quite favorable.
- [30:55]
Steve Liesman
War sticking to his optimism about the positive impact that productivity would have on inflation and the US Growth rates. And he said the Fed needs to use different data to gauge inflation, focusing on underlying price increases to make policy. For the record, the Fed already does this and several of those measures are also elevated. Melissa.
- [31:14]
Melissa Lee
All right, Steve, thank you. Steve liesman, Sock PUPPET it was an eventful, it was an eventful hearing. I mean, he got grilled about his holdings. And my favorite, I mean, the whole thing about the sock puppet, human sock puppet specifically, as opposed to just being a sock puppet. He had to say human sock puppet many times. That really struck me as a interesting. Anyway, I think it's not, I mean, I think most people in the markets believe that he is imminently qualified. He's fine as I don't think his
- [31:43]
Tim Seymour
resume is at all in question. By the way, guy is a sock puppet on human.
- [31:48]
Melissa Lee
A human sock puppet?
- [31:49]
Tim Seymour
Yeah. I don't, Human or not, let's Talk about but, but the three things I heard today were independent. I heard less accommodative and I heard a focus on inflation. And those are things that if you break it down the, the you know, a less accommodative Fed and a focus on inflation is more hawkish seemingly except for the independence dynamic is very good for equities and very good for bonds. More to the bond point. So not surprisingly some fireworks and I think a guy who is qualified for the shop.
- [32:20]
Dan Nathan
Yeah you know, 10 years sticking around four and a quarter and just you know, the longer this war gets pushed out, that sort of thing it's creates a difficult situation I think for Kevin Warsh who's coming in with the expectation that he's at least going to be accommodative. I heard everything that you heard but like once he's in the seat we know that the President is not going to go from just bashing Jerome Powell, you know, the way he has, you know, every week or every day for the last few months or so and just kind of allow there will be a honeymoon like make no mistake about it. But at some point he's going to expect rate cuts no matter what happens.
- [32:52]
Timbo Carter Worth
Market doesn't expect to be though I think it's a 40% chance of just one rate cut the rest of the year. Maybe that's good news because the market at all time highs says you know what, rate cuts don't necessarily matter. But I think he's extraordinarily well qualified. I was shocked that President Trump actually put his name in because of the independence I think he's going to bring to the Fed.
- [33:12]
Melissa Lee
Coming up, Apple's next move. Shares dropping today after Tim Cook announced plans to hand the reins later this year. Hand them over to John Ternus. What Wall street says about the news and what the Chartmaster sees in the technicals that could lay the foundation for the stock's next move back into. Welcome back to Fast Money. Shares of Apple dropping 2 1/2% today as investors digested last night's news that CEO Tim Cook would step down from his post on September 1st. Current hardware head John Ternus will take over. Many Wall street firms seem positive on the leadership change. Melia saying Turner was clearly the right choice. And TD Cowan views the promotion as a positive for Apple. But what do the charts say? Carter Worth, what do you think?
- [33:59]
Guy Adami
Well, it's dull. I would just put it that way. So that's another way of saying pair to but let's just talk about it conceptually. For a second. So Apple's relative performance, the tech sector peaked in supply September of 2022. Here we are in the spring summer of 2026 and there's every possibility that that relative peak will stand for many more years. But here and now is a chart. It's meandering, it hasn't made a new high, it is underperforming on a past two, three year basis, both the market and its sector. And to my eye it's neither fish nor foul. It's, it's, it's. There a big thesis to be long and overweight? Not really. Is it an imminent short? Not really. And so I would characterize this as do nothing. Maybe if you're benchmark to an index, you have to have it. But is it actionable, exciting, dynamic? No.
- [34:52]
Melissa Lee
So then it would seem that John Tertis has his hands full.
- [34:55]
Dan Nathan
Well, he does. I mean, when Tim Cooks takes the stage, and he will be taking the stage at wwdc, you could make the argument that expectations are kind of low two years in a row. I think that they've kind of released a product that people were not exactly excited about and then you have to kind of bridge the gap until they introduce the iPhones in the summer. Right. So it's going to be, or, excuse me, in September, October. So it's going to be a bit of a wait until we know exactly what their AI strategy is and what it looks like on device because we know that one of their big focuses is obviously security. And it's also, you know, they didn't spend a lot of time or money kind of building out models. They're going to be licensing them. So putting all that together, I mean, that is Apple's strategy and I suspect at Some point in 2027 that will be realized in the stock. But between here and now, I'd be surprised if it did. If they get the benefit of the
- [35:43]
Tim Seymour
doubt in that regard, it's, it's one of these announcements that we've kind of been expecting for some time. It's one of these announcements that no one really knows. I mean, the things that have defined Apple over the last five to 10 years are not just the underperformance or the last three, but, but the fact that Apple doesn't go out and buy anything. And so if that changes, that's a big deal because part of the reason Apple's been so defensive during down periods is that's as bulletproof of a balance sheet and free cash flow generator as any place out there. The fact that they've elevated a product and hardware head is, you know, you have to be positive in view that innovation on the product side is something that at least could be out there. But right now I like the fact that Apple hasn't spent on AI. I like the fact that it doesn't have an AI multiple and we talked
- [36:27]
Timbo Carter Worth
about this last night. Tim was not here but he would have thought, I think similar that with 10 days until the earnings release, there's a very good chance that in his last earnings release this will be one for the record books. Now whether or not the stock rallies on that we will see but I think you can pretty much have foregone conclusion. This will be a record quarter.
- [36:46]
Melissa Lee
Coming up, a short in the senior housing space where next guest is concerned about one real estate operator and where he sees the stock going from here when Fast MONEY returns. Welcome back to FAST Money. Shares of senior rental property operator Welltower under pressure today after activist investor Land and Buildings revealed it is shorting the stock stock citing major concerns with the company's executive compensation plans. Well, tower shares had been on a tear over the past year, up 44%. Jonathan Litt is behind the short. He's Land and Buildings founder and chief investment officer. Jonathan, great to have you with us. You filed, you went short two weeks after the proxy. Is that when you discovered the executive compensation plan first?
- [37:32]
Jonathan Litt
Thanks for having me on. We knew it was out there, but we wanted to see the final form which came out in the proxy two weeks ago. Yeah.
- [37:38]
Melissa Lee
Okay. So what was so shocking about it that made you want to go short?
- [37:41]
Jonathan Litt
So probably the best way to set this up is think about Charlie Munger and his famous quote, show me the incentives, I'll show you the outcomes. This plan can pay the CEO $3 billion over five plus years.
- [37:52]
Melissa Lee
Three billion. Three billion over five years in cash.
- [37:55]
Jonathan Litt
And this is stock units. Now if you generated an enormous return, maybe that's okay. He gets a substantial piece just for being in the chair for five years. He gets another substantial piece for generating a return greater than zero which is
- [38:14]
Melissa Lee
so any return and get the next
- [38:16]
Jonathan Litt
and he pays a dividend. So you know there's going to be a return. He's got to do some other things but the, the numbers are staggering. And when we think about the legendary CEOs and reeds, David Simon at Simon Property Group for 30 years, Hamid Mogadam and Prologis for 30 years, they never earned anything anywhere near this. Now in 3 billion isn't the only reason. It's the incentives. He's got an incentive to grow the size of the company but not to increase the share price by any meaningful amount, which means he's going to grow it. And we've been here, I've been on the show before with companies that have done that on the short side and it's highly problematic and it's not aligned with shareholders. Stock trades at 150% premium to ballot underlying real estate 33 times multiple. Its closest peers. It's got to go down 60% to get to its closest peers. We own the peers. We think the business is fantastic. We just think the incentives here are wrong, valuations wrong. And it's set up for a bad outcome for sure.
- [39:18]
Timbo Carter Worth
Well, that was me my question because the valuation would, you know, they could earn $7 maybe in the off next year. So you can do the back of the envelope math. And they traded a premium. How important is this earnings release I think on the 28th? I mean is that something that regardless of outcome, you're going to stick to your guns? On the short side, he is going
- [39:36]
Jonathan Litt
to continue to buy like crazy, right? It did 35 billion or so last year. Because he's going to make more money the bigger he gets the company, not necessarily by making us the shareholders money. He's going to make more money just by getting the companies total market cap up. When is that going to unwind? I think sooner rather than later. It might not happen tomorrow. You know, I came on on Alexandria in 23 stock was 120 got to 40. And so I think it's going to happen. I think it's going to be painful for shareholders. I can't pinpoint the timing.
- [40:08]
Melissa Lee
You say potentially a 60% drop. How do you come by that number?
- [40:12]
Jonathan Litt
That's just to get to the value of the peers Ventas and American Health Care, which we own both of. And they've performed similarly since 24 by the way.
- [40:24]
Melissa Lee
Jonathan, we should point out that we did contact Welltower and we invited them to come on the show. They declined to come on the show. But this is what they did point us to. They pointed US to page 39 of their proxy report in which they basically say they have to pay this amount to the CEO and other members of the executive committee because they don't want to lose them. They have been key to the performance of the company. They don't want to lose them. So they've structured this sort of incentive plan. There's the excerpt from the, from the proxy statement.
- [40:53]
Jonathan Litt
What is a classic, classic compensation committee jargon? We're going to lose them. I'd like to know if Apollo or Blackstone is going to pay this guy $3 billion to leave to run their health care. They're not. They don't do that. It goes the other way. The guys go from the Blackstones and the KKRS to the REITs and to these public market CEOs doesn't go the other way. We can find great CEOs for a lot less than 3 billion to run a REIT. It's not a complicated business. This isn't rocket science to put a, put a point on it or other businesses that, that are quite. You need that character. You have two companies. We're just going to go back to this ventas. We put two people on the board in 24American health care went public in 24American health care has crushed Welltower's returns. That CEO isn't getting 3 billion. The CEO of Ventos isn't getting 3 billion and they don't have an incentive structure to get it. They're going to keep driving those returns. If the CEO wants to leave. God bless. Go get 3 billion somewhere else. That shouldn't be coming out of shareholders pockets with this kind of a plan.
- [41:53]
Melissa Lee
Jonathan, great to see you. Thanks for coming by and explaining the short Johnson lit land buildings well again for anybody is a lot of money
- [42:00]
Timbo Carter Worth
and to Jonathan's point I mean that's one of the reasons probably the cherry on top but I mean remember he came on with Alexander Ara and look at where that stock traded down to it made levels we last saw in 2008, 2009. So you know you don't have to agree with them but you know Jonathan is absolutely doing his homework.
- [42:16]
Tim Seymour
Well I was going to say the kind of work these guys do, it's deep and to go through what was expected to be ready for that comp statement and be positioned for it for a company that the, the easier part of this short is that it's very expensive relative to peers and you know, whether it's 40% or 50% there's a number of different analysts on the street that feel the same way. That means at least you could be long the other side and short this one and still be okay.
- [42:42]
Melissa Lee
We've got a developing story on anthropic new Mythos AI model. Kate Rooney is in San Francisco at the very latest. Kate.
- [42:49]
Kate Rooney
Hey Melissa. So Bloomberg now reporting that anthropic Mythos model this is the cybersecurity model that was only released to a small group of companies. Bloomberg reporting that this has been accessed by unauthorized users. They cite a source familiar with the matter and documentation viewed by Bloomberg. We have reached out to Anthropic and they haven't gotten back to us quite yet. But the details here of this report are essentially that this Mythos model was found by a group online and they got access to it. They're not necessarily using it for cybersecurity, but it does indicate that despite the company's best efforts to really make this a gated release, not release it to the broader public, which they've said they do not plan to do, people have gotten access. Again, according to Bloomberg, this has not been previously reported. We'll see if we get any response from the company. Mel. But Mythos has been breached in some way. It's being used by those outside of the group.
- [43:42]
Melissa Lee
That was intended for Kate. Thank you, Kate Rooney. Of course this is based on a report. There's a lot we do not know. But in a time where we were waging an asymmetric war with Iran, I don't know, your mind kind of jumps to what could be the worst case scenario in terms of this very powerful model getting into the wrong hands.
- [44:01]
Dan Nathan
Yeah, and that was the point. I mean it was good at identifying things, was also good at exploiting things. And so here you are right out of the gate. It's look to be exploiting.
- [44:09]
Melissa Lee
Coming up, Target goes streaking. Shares running days, weeks and months. Long run in the green. How are traders? Our positioning in the name right now, more fast. And. Welcome back to fast Money. Target hitting the jackpot. Shares trading at their highest level since February 2025 and they're on quite a roll. The stock is up six days in a row, five weeks in a row and five straight months. It is of course the T and the infamous Timbo.
- [44:44]
Tim Seymour
Well, look, it's nice to have one of the horses pulling and I think this is a combination of a stock that really sentiment was so poor, so under owned. It was a valuation but it was a value trap for a long time. Change in management, but most importantly the things that matter, they've got their inventory under control. Clearly the segments and the mix here are to higher margin products. They don't necessarily have to sell out all just for growth. Groceries. I think this is a story you stay with. I mean it's, it's in a world where the consumer is okay, it's proven that this one, well, it shows that this one will outperform based upon both a change in sentiment and a change in their business.
- [45:20]
Guy Adami
I guess finally comes to mind right? I mean yeah watching it so but it qualifies as charts go as a
- [45:27]
Melissa Lee
bearish to bullish stamp of approval from cbw.
- [45:30]
Timbo Carter Worth
Real quick before we go to break that's in that downtrend trend from the all time high in the fall of 2021 has not been broken. As a matter of fact today's move I think gets us to the third point of a long term downtrend.
- [45:41]
Melissa Lee
Mel all right, up next, final trades, Final trade time. Timothy there was a lot of hype
- [45:54]
Tim Seymour
tonight about my Citibank. I'll tell you what, I think we are going higher. Let's go to one and a half price tangible broke city. Carter I'm with you on Citi but
- [46:02]
Guy Adami
Eaton Corp Major industrial just now breaking out wrong.
- [46:06]
Dan Nathan
Dan yeah, Intel I would not chase into the print.
- [46:09]
Melissa Lee
Bye.
- [46:10]
Timbo Carter Worth
Tough one last night. Msg world's most famous arenas. Mel said earl, you can't lose that game with a 12 point lead in
- [46:17]
Tim Seymour
the fourth quarter but sometimes you gotta
- [46:19]
Timbo Carter Worth
get kicked into you know what genuine parts.
- [46:23]
Melissa Lee
Mel, thanks for watching Fast Money Mad Money with Jim Cramer starts right now.
- [46:32]
Fast Money Disclaimer Narrator
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