← CNBC's "Fast Money"
CNBC's "Fast Money"
Jobs Report, Tariff Threats Hit Stocks… And Tesla’s China Sales Drop 02/07/25
00:42:48
Stocks falling as investors digest a weaker-than-expected jobs report, all while tariff fears still hang overhead. How the numbers are affecting rates, and the impact tariffs could have on the broader market. Plus Tesla stalling out. Shares falling as the EV maker’s China sales fall. How domestic competition is ramping up… and if the stock can shake off the road bump. Fast Money Disclaimer
Loading summary
Transcript130 lines
- [00:01]
Courtney Reagan
What counts most to you? Maybe it's spending more time with the ones you love. Or maybe doing more of what you love to do. The key to being rich is knowing what counts. At Edward Jones, our dedicated financial advisors are people you can count on for financial strategies to help support what truly matters to you. Let's find your rich Edward Jones member SIPC. Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org live from the Nasdaq marketsite in the heart of New York City's Times Square, this is Fast money. Here is what is on tap tonight. A trio of troubles from looming tariffs to disappointing data and a big tech tumble. Some big clouds sending stocks lower today. So how should you play the pullback? We'll debate and all eyes on China. What a drop in one of Tesla's key market means for the auto stock in the state of trade between the US And Beijing. And Uber revs up on a big activist stake. Nike shares hit nearly a five year low. And the countdown to kickoff is on. A new survey shows just how big the appetite for sports betting could get. I'm Courtney Reagan in this evening for Melissa Lee. Coming to you live from Studio B at the Nasdaq. On the desk tonight we have Tim Seymour, Courtney Garcia, Steve Grasso and Mike Koh. So let's start off with the threat of new tariffs sending stocks sharply lower to end the week. The S and p dropping almost 2%, closing near its lows of the day as President Trump said he'd announce reciprocal tariffs early next week. Those comments further rattling investors already on edge after a disappointing jobs report in the morning. The US economy adding 143,000 jobs in January versus estimates 469,000. The unemployment rate also edged lower while wages rose more than expected. The Nasdaq was the biggest loser on the day, led down by Amazon, which dropped 4% after its earnings report coming out after the bell on Thursday. Combined, the MAG7 lost over $300 billion in market cap today. So what do all these moves say about the direction for the market? Tim, start us off. We started ending the week with tariff worries. We started the week with some tariff rattling. Worried first, then relief. What in the heck should we be watching here?
- [02:43]
Tim Seymour
First of all, welcome to have you and we're also ending the week with some, you know, some disappointing earnings out of the Mag 7 where we kind of feel like we started the week and certainly where we had some of the week. So although the headlines at the end of the week about tariffs and reciprocal and a lot of the unknown in terms of the economic impact and truly what's going to happen on policy, I feel like the close of this week is as much about what really happened this week in terms of market leadership. Semis closed really at the 200 have been fighting to kind of break back over that they didn't fall apart. But lack of leadership from Mag7 for sure outside of Facebook I guess we call it matter these days and a little bit else. It's really been a story of that the fact that this morning's payroll number was a number that didn't tell you that the labor market is is bombastic. It didn't tell you that we have runaway inflation. But it definitely brought the unemployment rate down with the participation rate up. Meaning this was a real number. This was really to the extent that you could see some tightening from labor forces just because there's more people looking for jobs and overall that the unemployment rate has come down a bit. Wages were stronger. There are some elements of this that say the Fed is absolutely on hold. You've got CPI next week. Humphrey Hawkins so I think as much as there's unknown around tariffs, you can make an argument this week was relatively positive in tariffs. I'd say the Trump administration is showing that they're kind of being very tactical and using certainly using tariffs as a stick from which to see what kind of follow through they can get. I think there's concern about market leadership, I think there's concern about the Fed and that's what it felt like today.
- [04:12]
Courtney Reagan
Yeah, there's so many different things going on. But I love a lot of the points that you make obviously with the tariffs potentially as a negotiating tool. I think retailers were really happy that it wasn't more than 10% on China at least as of right now. Maybe some relief there, Courtney, but Tim didn't mention the mention the University of Michigan. I hate even to say that you hate Michigan.
- [04:29]
Tim Seymour
That's not nice.
- [04:30]
Courtney Reagan
Consumer sentiment survey I mean my gosh, that was really disappointing this morning. Much lower than expected. I mean consumers are the backbone of the economy. Starting to see some worry there.
- [04:39]
Courtney Garcia
Yeah. And I think that is something you have to watch, right? I mean because we are very much a consumer driven economy. So if the consumer continues to hold in There, that is a good thing. And you've seen these surveys come up and down. I think the bigger thing is what is happening with wages, what is happening with the labor market and what you saw with the data that came out today. Wages have actually been rising faster than inflation. And you also have this wealth effect where people have actually been spending even higher than their wages, mainly to reflect the fact that assets have been growing. So that's really what's been keeping the consumer strong. The question is, is that going to crack at some point? That's what people are worried about and they're waiting for and that's where they're looking at data. Like you point out, like consumer sentiment, you're seeing some of that go down. I don't think I've seen it enough in the data of the actual aggregate of the consumer and the economy yet to justify that. But it's something to watch out for. Absolutely.
- [05:23]
Courtney Reagan
I think the inflation number in there, their expectations that inflation was going to rise to something like 4.3% which is about a percent higher than previous. That that sort of rattled me a little bit to see that. I mean Steve, to make some points about the magnificent seven, kind of the magnificent one maybe over the last two weeks or so with matter being the one outperformer, NASDAQ down more than one and a third percent. Do you think that weakness continues as we move into week?
- [05:45]
Steve Grasso
Yeah, I do. And I wouldn't be buying so this last time I wouldn't be buying Max 7 right now. And I think you're going to have.
- [05:50]
Tim Seymour
This race on the pullback.
- [05:51]
Courtney Reagan
Not an opportunity.
- [05:52]
Steve Grasso
You know, you're always going to get sort of that deep seek bounce back in a lot of those names. But if you think about it, Deep seek is probably more than a one day event in the thought process in the psyche of the investor. If you think, if you think about that they can do it for 6 million or thereabouts when Metta is costing them 65 billion, Microsoft 85 billion, Amazon 104 billion. It becomes a. Are they throwing the money away? Is all of.
- [06:24]
Courtney Reagan
Even though Amazon they were trying so much to reassure it's going to be worth it. It's the biggest opportunity.
- [06:29]
Steve Grasso
I think that feels like last year.
- [06:30]
Courtney Reagan
Right.
- [06:30]
Steve Grasso
So I was, we were all on board last year where we. Who was going to be the first to monetize Nvidia was going to be the first to monetize Nvidia was 85% market share. But when you look at consumer sentiment that you brought up 7 month low inflation spiking to a spike the most as far as expectations for a 14 year high.
- [06:52]
Courtney Reagan
Right, that's so those things.
- [06:53]
Steve Grasso
But, but I'm on the, I'm on the other camp where I think tariffs, we're talking about this as inflationary. I think they could be deflationary. It also it increases the dollar's value which makes imports cheaper. It could slow down the economy a little bit. So that that's deflationary. And also you get the substitution effect that where okay, I bought this basket of goods, so I'll buy this basket of goods. So I don't want to say that I'm two rose colored glasses on this but, but I'm looking at from a different angle.
- [07:26]
Courtney Reagan
Tim. I want to go back one, because we started talking about the jobs report. Obviously backward looking most data is in this case we've got a lot of stuff going on in the government with government jobs. What's going to happen going forward? How does that impact the labor force and what we're going to hear from the numbers and how we should parse that all out government spending?
- [07:42]
Tim Seymour
Well, yeah, I mean it is typically people call, it's a payroll number but it's usually nonfarm payrolls that people think about. And, but then there's so there's a public and there's a private component to this and I think it is material. I do think though what's going on within the government, what's going on in terms of cost efficiency or really just rooting out of agencies that maybe needed to be rooted, who knows. I'll just say that I'm, I think the labor market from where we were back in September and August and September, which was coincident with when the Fed had kind of pretty much told you they're going to go, they're going to go no matter what. Now it really looks like 50 bips was too much. And it doesn't, I guess on some level it doesn't even matter it's what they did. But there's no question that 100 basis points that was rushed towards the end of the year, I think right now tells you why the Fed's on hold and why the markets are actually a little bit upset about that. I think it's not as if the Fed's going to quickly go about face, but the expectation that you could see rates come back in dramatically and give a boom to the stock market. That's why you're starting to see the broader part of the market actually really work. And back to Allocation. There's no question equal weighted is outperformed. There's no question that parts of the industrial space has looked really quite good. Even though there are still a lot of uncertainties about these companies that are importing many components of the core part of their jobs, their production scheme from China, Japan, really Mexico, Canada, China is other places we're focused on. So I'm less worried about payrolls here than I'm worried about market leadership. And when it comes down to it, what we heard out of the most important companies in the world over the last 10 days hasn't been emphatic.
- [09:16]
Courtney Reagan
Yeah, that is true. I mean Mike, do you see any buying opportunities here? Maybe in some of these most important companies, the Mag 7 or otherwise? Or you feel like you still want to be in a holding pattern because there's still a lot of uncertainty?
- [09:27]
Mike Koh
Well, I think Tim just sort of hit it right on the head there. You know, equal weight is outperforming. If you take a look at last year, the consumer discretionary sector was one of the best performing sectors for the whole year. And of course if consumer confidence is on the wane a little bit, then that's going to hit that sector. And it was the worst performing if you take a look at it today, you know, with respect to all of the big capex numbers. And I think that's what weighed on some of those companies that you know, other than Metta of course, that we're just reporting in Amazon's case almost eye watering numbers at 100 billion. But the fact is that indicates that there is some support still on the hardware side for the AI trade. I don't buy the deep seek $6 million thing at all to tell you the truth. I mean, first of all I think there's ample evidence that they probably had access to more chips than they suggest. And of course I don't think they're really counting everything either. Besides which, if you can do more with less, you can do much more with more. And that seems to be amongst those companies that have the financial wherewithal to make the investment, the direction that they're going to take and you don't get something for nothing. So I mean Deep Seq was quite an operation. If you wanted to get access to folks in America because there was a record number of downloads. I don't recommend it because if you don't know what's being sold, you're the product.
- [10:43]
Courtney Reagan
Yeah, maybe, maybe in this case it was a good thing that I was a late adopter because I was too late to the game and then I heard maybe I should do it. So huh, maybe it actually worked out. My favorite this time for more on today's market action, let's bring in NBC contributors CBC contributor Peter Bofar. He is the Bleakly Financial Group Chief Investment Officer. Peter, thanks for joining us. I mean what do you make of today's action here? What was really the market's biggest worry in your opinion? Why did we see that 10 year yield go above four and a half?
- [11:10]
Peter Bokvar
Well, it was interesting because there were a lot of different factors. The payroll number of course, as you guys have talked about and the dip in the unemployment rate even though it wasn't the cleanest number because we saw that the workweek fall to the lowest level since 2010, not including Covid. Then of course the Michigan confidence number with the short rise in inflation expectations because of worries about tariffs and the impact that's going to have on the prices that people pay. And then of course you throw in the threat of reciprocal tariffs all combining for that lift back to about 4 1/2% in the 10 year yield. And the 10 year yield has been falling interestingly enough over the past couple of weeks. At the same time, inflation expectations in the TIPS market has actually been rising. If you look at the 2 year, the 5 year and the 10 year inflation break evens where 2 year highs even as long rates have fallen. So I think that's an interesting thing. I think that's a tariff trade in the sense that it could be stagflationary in terms of its impact.
- [12:09]
Courtney Reagan
That's interesting. So I was going to ask you what you think your overall impact is of U.S. tariffs. Steve says that he thinks it actually could be deflationary.
- [12:17]
Peter Bokvar
Well, the initial reaction could be stagflationary, then a follow through where prices could fall. You know the one experience we had which is helpful, 2018. Well, many of us manufacturing went into recession in response to those tariffs that led to the Fed cutting interest rates in 2019. I think the only reason why we didn't see inflation then is because these manufacturers did not have the pricing power to pass it on. I think now we're sort of in this post inflationary world where manufacturers may have more leeway and opportunities to pass it on, not just in a one time fashion, which is the argument against it being inflationary, but something more persistent in the years to come, obviously depending on the complexion of these tariffs.
- [13:01]
Tim Seymour
Peter, it's Tim, great to have you. Has the dollar peaked and in the context of that also, what do you think about international here, which has really outperformed the U.S. germany's going gangbusters and yet everything we hear about what's going on their economy, not so good.
- [13:15]
Peter Bokvar
Well, on the dollar, we've certainly have had a big adjustment higher in pricing, in the tariffs. So if we do get the tariffs, that certainly helps to mitigate it. The question though is, is can the dollar stay strong? And if the dollar happens to weaken, if and we get still get tariffs, then we lose that dollar mitigation with those tariffs. So I do think there's a possibility because other central banks that have been cutting interest rates, they seem to be coming to the end of their rate cuts as well. And the one currency to me that's most important is the yen here because JGB yields continue to rise. So I think that that's potentially a major factor now in terms of international stocks. You know, Courtney said earlier maybe we're down to the mag one. And I do think that investors are all of a sudden realizing that there are a lot of other stocks other than the 7. There's 493 in the S&P. There's 2000 in the Russell. And you have a whole rest of the world that also trades stocks as well where valuations have become extremely attractive.
- [14:12]
Courtney Reagan
Peter, thank you so much. Really appreciate you joining us. We're going to have to leave it there for the time being. Peter Bokvar, we actually do have a bit of a news alert here. If we can move over to Megan Casella, I think she's got something for us. Hey, Courtney. That's right on U.S. steel. We are learning a lot today. A lot of moving headlines from President Trump, but the latest on this. First, Trump said earlier today that he continues to oppose a Nikon Steel takeover of US Steel. Later he said though, that the company is now considering an investment in U.S. steel rather than a purchase and that that's an arrangement that he would support. Take a listen.
- [14:52]
Tim Seymour
We didn't want to see that leave and it wouldn't actually leave, but the concept psychologically not good. So they've agreed to invest heavily in US Steel as opposed to own it. And that sounds very exciting. And we're going to meet with Nissan next week, the head of Nissan, very great company and they'll work out the details.
- [15:17]
Courtney Reagan
Note that he did say Nissan there, but a source familiar clarified to me that he meant to say Nippon now. Still a lot of outstanding questions on how exactly this would be structured and how significant of an investment this would be. Trump did say that he would also be a part of those meetings between company executives next week that he'll be there to help mediate. But even while Trump says his concerns are addressed here, not everyone is on board. The United Steelworkers union say their stance is still unchanged. They continue to believe. We believe Nippon is a serial trade cheater that has dumped its products in US Markets. So much more. Courtney, to watch next week on whether this arrangement might pass muster and make it through. Courtney, I'd like to be there when he mediates that. I can only imagine that that would be a spicy boardroom. Thank you very much, Meghann. Steve, I know that you have a play here in the space.
- [16:08]
Steve Grasso
I'm long steel from $30, I think it goes much higher. You're going to have a lot of volatility in that process, in the sausage making of it. But I think he's he Donald Trump, President Trump is hard pressed to let steal the stock and the company fail. So he's either going to do with their tax incentives and perceptions, reality, you're not going to let them buy it, but you could let them invest in it. I think there's room for there to be multiple winners and I'm concerned with one winner and that's letter X. And I think it goes higher. And we're talking about in the 50s with a Nippon deal. So we're trading at, you know, around 36, 37. I think it has the chance to get back up there.
- [16:51]
Courtney Reagan
Interesting stuff, Tom.
- [16:52]
Tim Seymour
Well, I think, I think U.S. steel, even without the dynamic here around Nippon or, you know, Cliffs or anybody else, was that this company was cheap. Company is cheap. But there was obviously some cyclicality to steel prices, things we were worried about. There's clearly a need for reinvestment in a couple of the core smelters. And that's the story. We just got numbers out of U.S. steel. The margins were better. The dynamic is interesting. You know, what is, what is the outlook for steel? That's a big part of this. But I think you can stay long the stock either way. I agree with Steve that, you know, really what the headlines are all about are things that seems like everybody kind of wants to make sure that U.S. steel wins. Meanwhile, U.S. steel on its own, I think was undervalued going into this.
- [17:33]
Courtney Reagan
Hmm. So maybe it doesn't matter how it gets there if you think that it's going to win in the long run. Mike, what do you think?
- [17:39]
Mike Koh
Well, I mean, if you take a look at what the options were doing today, it seems like there's A lot of longer sort of mid term trading going on and it trades 180,000. Contracts usually trades about 30,000, which is actually a pretty good number when you consider that every contract represents 100 shares. You're dealing with, you know, about 18 million shares worth of calls trading on that thing just today. So, you know, I think some people are cautiously optimistic, but it looks like they're playing it with the options to make their bullish bets here.
- [18:08]
Courtney Reagan
All right, well, stick with us. Coming up, Citi is benching Nike.
- [18:13]
Courtney Garcia
Why?
- [18:13]
Courtney Reagan
One analyst says they're losing hope in the slumping sportswear stock that's up Next. But first, one bill more than $2 billion in Uber. Pershing Square's Bill Ackman unveiling a massive stake in the ride. Hailing stock. Why he thinks this name is trading at a big discount. That's right. After this. Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single purpose, making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org Are you still quoting 30 year old movies?
- [19:04]
Dan Dolev
Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places.
- [19:15]
Tim Seymour
That take credit cards nationwide.
- [19:17]
Dan Dolev
And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com creditcard based on the February 2024 Nelson report.
- [19:30]
Tim Seymour
Learn how to use AI to be more successful with CNBC Make it's new online course.
- [19:35]
Courtney Reagan
We'll give you examples that can help you master AI tools.
- [19:39]
Tim Seymour
Go to CNBCmakeit.com AI and register now.
- [19:45]
Courtney Reagan
Welcome back to Fast Money. Uber topping the tape today, shares catching a ride on news that Pershing Square's Bill Ackman has been building a $2 billion in the stock since the beginning of January. The billionaire investor saying in a post on X that Uber is, quote, one of the best managed and highest quality businesses in the world and that it can be purchased at quote, a massive discount to its intrinsic value. Tim, what do you make of this?
- [20:07]
Tim Seymour
I believe it. I agree with it. I was really surprised to see how the stock traded down on those numbers they announced. I realized that there's, there was a little bit of disappointment in terms of the lower unit economics of what's just happening in kind of the core business. And there's some concern around the build out of the autonomous, but it does seem as if they are in a pole position in terms of autonomous. If in fact that is not the death of these companies. In other words, there's been this question about our Uber and Lyft dead because of autonomous or are they really going to truly benefit? I think it's the latter. But I look at the company and I do think it's cheap. And I think also the pullback has been on a combination of factors that I think have largely worked through. I think the business has been normalized. They're given credit, as Bill Ackman's pointing out, in terms of having a well run company across multiple verticals within essentially the super app of which is delivery. And I just think that the pullback is an opportunity. Stock's done nothing for two years. It's had a great couple of days, but I think you can still buy it.
- [21:00]
Courtney Reagan
Mike, what do you see here in shares of Uber?
- [21:03]
Mike Koh
Well, I see a 5% free cash flow yield based on full year numbers, which is obviously very cheap I think compared to a lot of businesses. Options traders love this one. It traded a million contracts today. That's a huge uptick in the volume and that's probably not that surprising. You hear that there's a huge stake being taken by a famous investor and you often will see a lot of retail pile into it thereafter. But I mean I'm with Tim here. I mean the growth is outpacing the market considerably and yet you're buying it as similar multiple. So yeah, I think you can stay long this one.
- [21:33]
Courtney Reagan
What's driving the stock here, Courtney, do you think what part of the business is most important?
- [21:38]
Courtney Garcia
I think the autonomous vehicles. That's clearly going to be its longest growth driver. I mean I think the question is what that's going to be in the short term. But if that is something they can monetize and they can be at the forefront of. I think you're going to see that optimism here in the stock. And I think what you're seeing is we, we saw that from Bill Ackman. He was very positive on the stock and the purchases they're doing. But also the day that we had the sell off with Uber they came out themselves and said we're in an accelerated repurchase. I think they were repurchased about $1.5 billion worth of shares over the next year. And I think you're seeing that optimism. Everybody said this is a great buying opportunity. I think you want to listen to some of those big names when you're.
- [22:10]
Courtney Reagan
Hearing that it's had a good two year run.
- [22:12]
Steve Grasso
Steve Yeah, I mean this was the diversified play. They had a lot of buckets of revenue where Lyft basically had one. And they e. Exactly. And they can always partner up with another autonomous partner or they can have bolt on acquisitions, tuck in acquisitions where they can get the most bang for their buck and be in the, be in a better position than developing it on their own. They could probably be the deep seat of autonomous driving. Right. They take everyone else's technology and then they wind up just putting it all together. And I think the management team is, is, bar none, the best in the space. And when you look at the stock, every time it pulls back, it's, it's always a buying opportunity.
- [22:57]
Courtney Reagan
Good stuff, but there's a lot more fast to come. In fact, here's what's coming up next.
- [23:02]
Tim Seymour
Citi losing its faith in the Nike turnaround story inside a key meeting with CEO Elliot Hill that has one analyst benching this name and whether or not you should just sell it next. Plus, Tesla's China problem. The EV maker seeing sales plunge in the region as competition heats up. Will a looming trade war just worsen the issue? And what's in store for the US Auto trade? You're watching Fast MONEY live from the NASDAQ market side in Times Square. We're back right after this.
- [23:31]
Courtney Reagan
For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn more@mycare.org Are you still quoting 30 year old movies?
- [23:50]
Dan Dolev
Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places.
- [24:01]
Tim Seymour
That take credit cards nationwide.
- [24:03]
Dan Dolev
And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com creditcard based on the February 20nelson report.
- [24:16]
Courtney Reagan
Welcome back to Best Money. Let's get to our call of the day. Shares of Nike dropping almost 4% after a downgrade from Citigroup. Analysts also cutting their price target to 72 bucks, down from 102. The note citing sales pressure and competitive threats. And Nike's running shoe business analysts saying they are, quote, no longer, they no longer have the patience to wait another year for the company to make a comeback. Now shares closed the day at their lowest level since the depths of the pandemic. That was nearly five years ago. Courtney, I'm not entirely surprised that this is going to take a while for a turnaround. Maybe I'm surprised that Citi thought that it would take a year. Are you surprised about this?
- [24:50]
Courtney Garcia
No. And I think this has been the case for a while. Right. I mean their biggest issue is competition. Are people still buying as much footwear or activewear and then if they are, are they going to hoka, are they going to on like they have some real competitors there and Nike just not giving us like a light at the end of the tunnel there, which is really the problem. And you know, Citi's not the first one. I think there's a minority of analysts who are bullish on the stock. I mean most people don't expect this to go anywhere in the near term. So that should be that big of a surprise, like maybe this goes somewhere. But I mean, sit on the street, just watch people walk around, there is as many more of their competitors and you'll see it day to day. It's fascinating.
- [25:24]
Courtney Reagan
Yeah, absolutely. I mean I think it takes a while. And the CEO was talking about how he's got to sort of flush out the apparel that they don't think went well and then they've got to reorder and restart and get all of those distributed. They're reworking on their vendor relationships and that takes a while. Right.
- [25:37]
Tim Seymour
I just think it's fascinating how the street interpreted a sell side meeting that was held by CEO Elliot Hill and IR at the New York Stock Exchange. All the analysts went to it. They all came away with different views. A lot of them came away with this view that it's going to take longer. So Citi's not alone on this. There's three or four sell side analysts that just said we actually think that the turnaround now bleeds well into into 2026 and that we're concerned about margins. I'm also looking at a report from Piper who said we're actually really excited at the sense of urgency out of Elliot Hill and that we actually think so. You know, to me there's nothing new we learned this week there's nothing new about Nike's business. I'm actually as an investor and I have a small position in Nike. I just mean more broadly as an investor. You should be pretty happy that he's resetting expectations. He didn't run in here and tell you he was going to do a lot. And in fact, I think this was really a reiteration of that. So most of the people came away saying, all right, no change anytime soon. I think the things that we, we all recognize are things Nike needs to worry about is the competitive landscape has gotten much more aggressive. It's not just a duopoly with Adidas. It is a case where people are worried about margins. And then there's some cyclicality. I think people bought more sneakers in the last three years than they know what to do with. I think there's really a dynamic here where part of this is just resetting the story. Owning Nike here at $68, I think you're going to be very happy over the next couple of years and you don't need to trade it. You do want to invest in this company.
- [26:57]
Steve Grasso
Didn't you want to turnaround specialist, someone to give a little bit of a fresh mind, a fresh look? Now, nothing against the new CEO, but he has been there since 1988 as an intern. He's had 19 different roles. Not that that makes it bad. He knows the company better than anyone.
- [27:15]
Courtney Reagan
Sure.
- [27:16]
Steve Grasso
The problem with Nike is that you wanted a fresh look. You wanted a new approach. You're not going to get it with that CEO. He could be the greatest CEO in the world. He's not going to give you fresh perspective. And you have on competition, you have hoka competition. Citi, by the way, loves deckers. So as much as they don't like Nike, they're constructive on deckers. And you saw deckers, you saw that stock.
- [27:42]
Courtney Reagan
Tough week.
- [27:43]
Steve Grasso
Really, really come in dramatically. And that's probably a buying opportunity versus waiting for the turnaround of Nike with the same CEO that's been there.
- [27:52]
Courtney Reagan
All right, so you're not interested in Nike, but Tim says buy it.
- [27:55]
Tim Seymour
Right on.
- [27:56]
Courtney Reagan
All right. Well, coming up, inside China's trade war game plan and what Tesla's global sales problems could mean for automakers. The latest on the tariff tip for tat right after this. Missed a moment of fast.
- [28:08]
Tim Seymour
Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.
- [28:16]
Courtney Reagan
Welcome back to FAST money. Stocks taking a leg lower on Friday after President Trump sparked inflation fears with threats of more tariffs. The Dow and the S&P 500 both falling about 1%. And the NASDAQ dropping nearly 270 points on follow through from Amazon's disappointing results. And more post earnings moves from Pinterest Affirm and Expedia. All three names up double digits after posting their results on Thursday. And finally, Metta locking in a 15 day win streak. The tech tightened up nearly 17% since the run began back on January 17th. Meanwhile, Tesla falling more than 3% after reporting that its EV sales in China fell sharply in January. This amid reports that the EU is set to lower tariffs on US Autos in a bid to avoid a trade war with President Trump. Phil LeBeau joins with all the details. Hi, Phil.
- [29:03]
Phil LeBeau
Hi, Courtney. Let's start first off with the sales in China, which were not good in the month of January for Tesla in comparison to their competitors, they were really not good. Tesla down 11.5%. BYD up 47.5. Keep in mind, BYD sells not only electric vehicles, but a larger percentage of their sales are hybrid vehicles. Nonetheless, they were up 47.5% in terms of the global EV sales race. Yes, Tesla was number one last year, not by a lot, but still number one over BYD. Number three way back at 880,000 is General Motors. Tesla also got some bad news yesterday in terms of auto sales coming out of Europe, in particular Germany. They were down 59% in January. And as I said yesterday, Courtney, one month does not make a trend. But take all these numbers together and it clearly shows that there may be a number of factors at play here, including the fact that some buyers might be waiting for the refreshed model Y, which is just coming out in China. So we could see these numbers reverse in the months to come. But as you take a look at the EU auto imports and you mentioned in the beginning that President Trump may want to have reciprocal tariffs put in place, which is why the EU is saying, hey, maybe we'll lower down the 10% tariff on vehicles coming from the U.S. here's how many were sent over to Europe to the EU. 789,000 through the month of November last year. That's four point or this year, I'm sorry, these are EU auto imports into the US 789,000, 4.9% of our US sales. Largest amount coming from Germany. 436,000 imports, exports. Courtney. I'm getting all of them mixed up, by the way, in terms of auto exports. It's about 800,000 that we sent all around the world last year from here.
- [30:51]
Courtney Reagan
In the US it's very interesting of course too, that Tesla is the name in the middle of all of this with Elon Musk's involvement in Washington these days. Phil, thank you so much for being here with us for that one. Mike, I want to give you A quick comment first on what Phil had to say there.
- [31:06]
Mike Koh
Yeah, I mean the first thing I would say is that Tesla doesn't really trade off of their sales so much as other automakers do. If they did, the stock would be a whole lot cheaper than it is. It obviously has a lot to do with their technology and the Model Y as he referenced, a lot of people would wait for that because that's their best selling model by a long shot.
- [31:23]
Courtney Reagan
What do you make of shares of Tesla here, Courtney?
- [31:25]
Courtney Garcia
Yes, a Tesla has not been something I'm chasing and I think I do. You know, our argument has been I think it is expensive for what it is. But when you're looking at this as an investor, they have competition in China. I don't think that's anything that's necessarily new. I think we knew that was coming. But if you are looking at this on the long side, I think people are optimistic about what their full self driving and autonomous driving means in the future.
- [31:45]
Tim Seymour
Right.
- [31:45]
Courtney Garcia
We were talking about how that's going to benefit Uber earlier and that's something that if that does come to friction could be a benefit. The question is, does that justify the price that Tesla you're paying for Tesla? So no, I'm not jumping into it, but I think that's the narrative that investors are going to be looking to over the longer term.
- [31:59]
Courtney Reagan
Well, China's counter terror countermeasures against the US Tariffs are set to take effect on Monday. Beijing imposing levies on all US Energy as well as agricultural and auto equipment. Also announcing export controls on rare minerals and reviving antitrust probes into US Tech tech companies. For more on the impact, let's bring in Longview Global managing director Dwarric McNeil. He's a CNBC contributor, also served in the Department of Defense during the Obama administration. Dwodrick, thank you so much for being here with us. I mean putting it all together. What do you think this means for us going forward next week?
- [32:33]
Dwarak McNeil
Thanks for having me. Courtney, great to see you. Listen, I think we are just at the beginning of what I think will be an extended process of the tariff wars, the trade wars, a repeat in some ways of 2018. And for China, I think this was a measured response to what I thought was a very small 10% from Trump. But what we're likely going to see, Courtney, is everyone is holding fire until after April 1st when the America First Trade Policy Executive Order requests reports back on how Trump then may be able to do a broader tariff approach to China. So I think measured now, but There's a lot of Runway ahead of us with respect to tariffs.
- [33:22]
Courtney Reagan
How much of this do you think will stay in place and how much of it is being used as a negotiating tool? Those early the initial headline about China and Mexico then very quickly got walked back. At least a delay in the timing for some discussion. Could that happen at all here? Is this negotiation more than a tariff that stays in place like the ones that we've seen that have been in place now since 2018?
- [33:44]
Dwarak McNeil
So this is a very good question. It's a question we've all been asking ourselves. I think not before Monday. I don't see a deal taking place before Monday. But to your point here, Courtney, both sides, Xi Jinping and China loves transactional leaders and Trump loves a deal. But the real question here that many of us are asking ourselves is deal for what? What is the ask? And I think China has a pretty long list of asks. I'm unsure what our asks are and whether or not what we are asking for is negotiable. There are certain things that, as you well know, they're just not negotiable with respect to China, you know, not funding state owned enterprises, for example. That's not going to happen. So the question I have is what is the ask? I agree that both sides are willing to negotiate, but we need to know what that negotiation entails to order.
- [34:36]
Steve Grasso
To Courtney's point, do you think a lot of this stuff is sort of getting numb to the people that invest around it because it's going on for so long? We've already argued what the tariff reaction would be be way before we even saw what the real tariff news was going to be. But when you talk about China specifically, because that's the one that's most important, their economy is a lot weaker than I think we know it to be. A and B, we seem to have the leverage over China. So ultimately, do you think this is more stick than carrot and we should prevail since their economy is a lot weaker than ours?
- [35:19]
Dwarak McNeil
Yeah, a very good way to think about this. Look, I think the difference here from 2018, which you point out, is China is still dealing with all of the domestic economic challenges that we've spent the last two years talking about. This economy is not the economy that China went to the trade war with in 2018. Now they have developed an additional set of tools that they did not have to respond because they can't match US Tariff for tariff. But you're right. I think ultimately at the moment, the US Believes it has the upper hand because China's economy is still struggling. And so we will see the Chinese are not going to fold. They have agency. It may not be as much, but they are prepared to match us. Perhaps not tariff for tariff, but they'll develop some of these other tools and find a way to hit back and they will dial them in in a very, very specific way.
- [36:11]
Courtney Reagan
Dwarak, thank you for joining us in the thoughtful conversation. Appreciate it very much. Tim, what do you do around this?
- [36:17]
Tim Seymour
I think you invest around it and I think you invest in China. I mean my ask as an investor in China is that the Chinese government leaves their companies alone. You know, I look at Alibaba Tencent, they're to the bigger positions in idevo, which is the international ETF I manage. And I just think the valuations for some of these Chinese tech companies are so attractive and they're not really macro stories. In other words, I don't need major stimulus out of China to see Alibaba rerate or Tencent. I need them to if anything just, you know, some of the parts people be able to realize that there's maybe spin offs, that there's dynamics in those core businesses that are extremely undervalued. A lot of this has been governance risk. So I just, you know, I look at the, I think Steve's right. You know, the numb factor of China, China tariffs is certainly something that's been hanging over the market and investing in China for a long time. I will say I think the Chinese government also has been waiting to, to save some stimulus for really needing to see what the Trump administration was going to throw at him. I think you're getting more stimulus out of China. I think this, this entire K web sector is going higher.
- [37:15]
Courtney Reagan
Interesting stuff. Well, coming up, sports betting on Robinhood. The concept hit a snag this week. But could the possibility be revived inside an investor survey that could revolutionize the trading platform? That's up next. Plus a monster leak of earnings from McDonald's to Reddit, Coinbase and beyond how the options market is gearing up next. Welcome Back to Fast Money. Another busy week of earnings kicking off Monday. McDonald's, Marriott, Coca Cola, Robinhood and Reddit, just to name a few. Mike, what are you seeing in all the names ahead?
- [37:45]
Mike Koh
Well, we have a few names are going to have some very big moves. I mean one of the big moving stocks is Applovin and that one right now is implying a move of more than 18% after they report Lyft. We were just talking about Uber. Lyft is going to be reporting and they have a more than 16 implied move. Moderna coming up. That one's got a big move along with Coinbase and McDonald's is only going to move about 3%. But Humana was actually the name that I was looking at and it its move isn't quite as large as some of those other names. It's a little over 7%. But you know, this is actually one of the largest implied moves we've seen for this stock in a while. Now I understand the managed care space has been pretty hard hit, but I think one way that traders could potentially take advantage of this if you're optimistic, is doing something called a diagonal call spread risk reversal. So I was actually looking at buying a longer dated at the Money 280 strike call and then selling a near dated $2.45 put, which looks like a level of support to me to the downside that expires in March and then an upside call around 3.20. And this would probably make some money if you get a little bit of a standstill if the stock rises and you really don't have a whole lot of risk unless you get put the stock down below $2.45. But like I said, I think that's probably a level of support here.
- [38:58]
Courtney Reagan
Interesting on Humana. Thank you very much, Mike. Courtney, do you have any plays there either with Humana or any of these other names next week? I mean we've got a lot of things to to play around. Yeah.
- [39:07]
Courtney Garcia
And I would actually be really interested to see kind of what the guidance is on a lot of these companies. So like take for example, we just saw Expedia today. They actually came out and really beat expectations. People are really optimistic about that space in the next week. Actually Airbnb, who's coming out. So I think some of these you want to see. Is this a one time story or are you going to see this across the industry? And I think as we see a lot of these companies start to reporting, you're really going to start to see that trend. And I think that's really what we want to keep our eye on.
- [39:29]
Courtney Reagan
What should we listen for next week, Steve?
- [39:32]
Steve Grasso
Well, when I look at Moderna's chart, have you seen this chart last 5 years it has disintegrated.
- [39:38]
Tim Seymour
Not so good.
- [39:39]
Steve Grasso
Not so good. I was with Joe Davis, who's the chief economist at Vanguard earlier on this week and he had mentioned that the biggest impact you're going to see with AI are healthcare names, specifically hospital names times because it's going to make the doctors and the nurses more efficient with their time. So people are not even factoring that in. So I'm looking at like an HCA and they put out longer term guidance. So I agree with Courtney.
- [40:11]
Courtney Reagan
Shorter term.
- [40:12]
Steve Grasso
For the, for the purposes of this show, we're looking for guidance in how AI is being used. And you'll start to see every company, whether it's like the mood ring. Right. Every company, whether they use it or not, is going to have AI in their earnings.
- [40:24]
Courtney Reagan
I'd love to see health care use more, figure out those like data. Oh, we love the mood ring, but it was always the same color for me. I think I just run cold. Well, are you surprised?
- [40:33]
Tim Seymour
You do not run.
- [40:34]
Peter Bokvar
Where do you go with this one?
- [40:36]
Tim Seymour
I mean, I'll, I'll push back. That's what we're here to do. I'm going to fight that.
- [40:39]
Courtney Reagan
Thank you.
- [40:39]
Tim Seymour
I don't feel it at all.
- [40:40]
Courtney Reagan
Thank you. Well, coming up, sports betting coming to a trading platform near you. Well, Robinhood users say about their appetite to make wagers on the app and what it could mean for the company's business. That's up next. More fast money into. Welcome back to Fast Money. We're about 48 hours away from kickoff for the super bowl. Super Bowl 59 and football fans could be placing a record amount of bets on the game. A new survey of Robinhood users finds almost 80% want to be able to use the app to make those kinds of bets. The trading platform had offered contracts for Sunday's game earlier in the week but were forced to cancel those bets. Dan do Love of Mizuho was behind the study. He's here to break it down. Dan, why did you do the study and what does it tell you?
- [41:19]
Dan Dolev
Well, last November they did an analyst day and Vlad mentioned that they were thinking about it and it just rocked the whole sports betting market. And so we were like, was he serious? Was he not serious? And I'm a big fan of Vlad, but it turns out they were serious and they did it. They rolled it back and we wanted to see the appetite.
- [41:37]
Courtney Reagan
And so what did the survey show? It showed that a lot of people were interested in that. Did that surprise you? Almost 80%.
- [41:42]
Dan Dolev
So 2/3 the surprise there was the two thirds of the overlapping is massive. Two thirds of the people that trade on Robinhood, it turns out, are using, you know, anywhere from DraftKings, FanDuel, etc. All these sports betting things. There's, there's an enormous amount of, you know, like Potential for overlap in terms of like the people that are trading on Robinhood, do they want to trade other apps? Like I view Robinhood as like a global one stop shop, you know, massive, you know, trading app for everything. So whether it's sports or politics, anything goes.
- [42:13]
Courtney Reagan
So what do you think the opportunity then could be for Robinhood if they can figure out a way to do this?
- [42:17]
Dan Dolev
I mean, this is a great question. They aimed a, at the analyst day, they talked about a $600 billion TAM. Right. It's kind of we're going back to like 20, 21 numbers, but if they just get 10% of that TAM, it's like a $60 billion revenue company. This is incremental. This number wasn't in the TAM. So I'm hearing anywhere from like 20, 30 billion dollar TAM to 100 to 150 billion dollars. I'm not an expert in sports betting, but that's what I'm hearing in terms of the markets, not what we heard.
- [42:44]
Tim Seymour
Yeah, well, so try to separate. So the correlation be for, for Hood and what's been going on with Bitcoin prices. There's no question that there's been this huge renaissance in the whole group and certainly that, that group of traders help us understand really where you separate the price of bitcoin, but truly the strength of the business, how it's grown, either the, the, the wealth and the amount of money that's on the site now versus where it was. Help us really understand because this has been quietly one of the best plays in the last two years.
- [43:10]
Dan Dolev
So the beauty of Robinhood and this is sort of that super app for trading. Right. It's not just crypto. Right. We upgraded Coinbase. You know, I feel better about Coinbase now, but we have a neutral and Coinbase Robinhood is just so much more. It's got equities, it's got options, it's got crypto, it's got interest, you know, deposits. People are bringing in their money, they're putting in their deposits. Now they're actually letting people bring in their IRAs, they're doing the 3% match. So the way I think about this is if one thing goes wrong, let's say crypto starts coming down, which we've seen in the last few days. There's other revenue streams that hedge it and you don't see that with a lot of other apps which are very monolithic.
- [43:50]
Tim Seymour
Yeah.
- [43:51]
Courtney Reagan
What's your outlook for crypto?
- [43:53]
Dan Dolev
So I was a little, you know, I'd say a little bit better now. I think than in the past of the work that we've done actually shows you that wallet adoption is coming up. And that's highly correlated with, you know, with bitcoin. So we're actually modeling like 30% growth in Bitcoin this year. And so that's, you know, 25, 30% growth. And that's kind of where we are in crypto. So I would say still no intrinsic value in bitcoin. I stand with that. But people like it. Adoption's coming up. I can't fight it. And I think it's going to go up.
- [44:24]
Courtney Reagan
Who do you want to win the big game this weekend? Final question.
- [44:27]
Dan Dolev
Can I, you know, I don't even know who's playing.
- [44:30]
Courtney Reagan
That's all right.
- [44:31]
Tim Seymour
All right.
- [44:31]
Courtney Reagan
Say the Chiefs. We're all wearing reds.
- [44:34]
Tim Seymour
Actually means he's. We want to read his reports. He's focused.
- [44:37]
Mike Koh
Yeah, right.
- [44:37]
Courtney Reagan
I like it.
- [44:38]
Dan Dolev
But I am going to a party. But I am going to a party, but I don't know who's going.
- [44:42]
Courtney Reagan
Okay. You might want to study up before you get there. Thank you, Dan. I appreciate you being here. Coming up next, final trades. Time for the final trade. Let's go around the horn. Mike, you first.
- [44:51]
Mike Koh
Yeah. If you're concerned about consumer confidence causing rotation, then move to equal weight. RSP Tim.
- [44:57]
Tim Seymour
Thank you, Courtney Lyft.
- [44:58]
Courtney Garcia
And Courtney, I would look at Baba here. I wouldn't discount China, even with the tariffs.
- [45:04]
Courtney Reagan
Steve, bring us home Deckers.
- [45:05]
Steve Grasso
I like this sell off. I think it's a buying opportunity.
- [45:08]
Courtney Reagan
Thanks for watching. Fast Money. 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 in other 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 andor 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 For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn more at multicare. Org.