CNBC's "Fast Money" Podcast Episode Summary
Episode Title: Mag7 Meltdown To Kick Off 2025… And Mortgage Demand Drops 1/2/25
Release Date: January 2, 2025

Introduction
In the season premiere of CNBC's "Fast Money," host Tyler Matheson and a panel of esteemed traders—including Karen Feinerman, Manawan Isaac, Courtney Garcia, and Guy Adami—delve into the tumultuous start of 2025 for the stock market. The episode explores the significant decline of the Magnificent Seven (Mag7) stocks, led by Apple, the first-ever drop in Tesla’s annual deliveries, the challenges facing the homebuilding sector due to declining mortgage demand, and the resurgence of the energy sector. Additionally, political developments in Washington and notable corporate news add layers of complexity to the investment landscape. The discussion is further enriched by insights from Chris Harvey, Head of Equity Strategy at Wells Fargo Securities.

1. The "Mag7" Meltdown and Apple's Impact
The episode opens with a critical examination of the Magnificent Seven (Mag7) stocks, particularly focusing on Apple's substantial decline. Apple shares fell by over 2.5% on the first trading day of 2025, resulting in a $100 billion loss in market value—the largest since October. Apple's stock has now dipped more than 6% from its all-time high just a week prior.

Tyler Matheson initiates the discussion:
“A choppy start to 2025: Does this portend an end to a two-year mega rally?” [01:41]

Kareen Feinerman expresses cautious optimism:
“I don't think... I like the ones that I own Apple.” [03:14]

Guy Adami adds depth to the analysis:
“There are times where Apple is a legitimate trading vehicle... if you're a believer in the long-term secular story, it's one that you should own and hold onto.” [03:37]

The panel debates whether the recent downturn signals a broader market shift or a temporary setback. Concerns about Apple’s competitive challenges in China and its ability to sustain growth without a clear AI-driven catalyst are highlighted.

2. Sector Analysis

a. Technology and Artificial Intelligence
Courtney Garcia emphasizes the ongoing structural changes driven by artificial intelligence (AI):
“There are a lot of stories surrounding AI that aren't going away anytime here in the near future.” [06:38]

The discussion touches on the limited immediate impact of AI on Apple’s sales but acknowledges AI’s critical role in the energy sector and data center demand.

b. Energy Sector's Resurgence
The panel notes a potential rebound in the energy sector, with Manawan Isaac pointing out:
“Vistra Energy... this stock has been reinvigorated by this whole phenomenon.” [07:18]

Karen Feinerman shares her enthusiasm:
“Energy... it's way better than an average market stock.” [08:04]

c. Semiconductors
The semiconductor sector appears to have peaked mid-last year, with stocks like Broadcom and AMD underperforming.

3. Expert Insights: Chris Harvey on Equity Strategy
Chris Harvey from Wells Fargo Securities offers a bullish yet cautious outlook for equities in 2025. He anticipates:

• Market Growth with Increased Risk:
  “Equities are going to go up this year, but people are going to put on too much risk.” [10:55]

• Heightened Volatility:
  “We should see some spikes in volatility or a lot more spikes in volatility.” [11:40]

• Investment Recommendations:
  “Barbell something defensive with something you like, garbage. Something a little bit more cyclical.” [12:24]

Harvey projects the S&P 500 to reach 7,707 by year-end, emphasizing the importance of balancing portfolios to mitigate risk amidst anticipated volatility.

4. Political Developments: House Speaker Election
Emily Wilkins provides a rundown of the impending House Speaker vote as Republicans take control of both chambers:

• Potential Challenges for Speaker Mike Johnson:
  “It would only take two lawmakers to deny Johnson the gavel.” [18:44]

• Process and Implications:
  “If members actually start voting for someone else... that's where you're gonna see the kind of breakdown in the votes.” [20:01]

The uncertainty surrounding the Speaker’s election adds a layer of unpredictability to the market outlook.

5. Corporate News and Sector Snapshots

a. U.S. Treasury Hack
Megan Casella reports on the recent cyber intrusion by Chinese hackers into the U.S. Treasury Department:

“Roughly 100 government computers were compromised, accessing unclassified material.” [21:36]

b. Tesla’s Delivery Decline
Phil LeBeau analyzes Tesla’s first-ever drop in annual deliveries:

• Delivery Numbers:
  “They delivered just over 495,000, falling short of the 504,000 consensus.” [23:14]

• Market Reaction and Future Outlook:
  Despite the delivery shortfall, Tesla's energy storage deployments saw significant growth, suggesting potential future stability.

c. Boeing’s Struggles
The panel discusses Boeing's continued challenges, exacerbated by being placed on China’s export control list:

“Boeing's been tough... it's just something completely unexpected.” [29:23]

Karen Feinerman remains cautiously optimistic:
“I'm long Boeing in the hope that it gets out of that bad category.” [30:50]

d. Nike’s Market Performance
Nike experiences a 2.6% decline due to falling sales estimates:

• Analyst Perspectives:
  “I mean, there's not a compelling reason to own this... it's not on a turnaround yet.” [31:07]

6. Homebuilding Sector and Mortgage Demand
The podcast shifts focus to the significant drop in mortgage applications and its impact on homebuilders:

• Mortgage Demand Decline:
  “Applications for a mortgage to buy a home fell 13% during the two weeks... 17% lower than the same period one year ago.” [34:11]

• Homebuilders’ Struggles:
  Major homebuilders like Lennar and Pulte Group have seen their stocks fall double digits over the past month.

Manawan Isaac warns against investing too early:
“I think there's more pain on the downside.” [35:24]

Conversely, Courtney Garcia and Karen Feinerman highlight long-term opportunities driven by structural housing demand.

7. Energy Sector's Positive Momentum
The energy sector bounces back, with oil and gas producers leading gains:

Manawan Isaac remarks:
“Crude oil is surprising people to the upside... energy stocks start to play catch up into the valuations.” [38:46]

Guy Adami likens the energy move to a flight to perceived safety:
“I think that could be a lift for the energy sector.” [39:48]

The resurgence is attributed to rising oil prices and an optimistic demand outlook from China.

8. Key Investment Calls: Uber and SoFi
The panel presents investment calls on Uber and SoFi amid varying market sentiments:

a. Uber
Goldman Sachs adds Uber to its conviction list, citing continued growth prospects even with autonomous vehicle advancements.

Courtney Garcia supports the call:
“I've been really strong showing how profitable they have been... looking at this as an opportunity could absolutely.” [41:14]

b. SoFi
Facing an 8% decline after KBW downgraded the stock:

Guy Adami expresses cautious interest:
“I like the fact they seem like they're catering to a younger cohort... but the valuation is... hard to argue.” [42:38]

The mixed sentiments reflect the nuanced positions investors must navigate in volatile sectors.

Conclusion
The episode of "Fast Money" provides a comprehensive overview of the volatile start to 2025, marked by significant stock declines in major sectors, geopolitical tensions, and shifting investment strategies. While the Mag7's struggles, particularly Apple’s, raise concerns about the sustainability of recent market rallies, opportunities in the energy sector and selective investment calls like Uber present potential avenues for savvy investors. The panel underscores the importance of balanced portfolios and cautious optimism amidst rising market uncertainties.

For those seeking to navigate the complex investment landscape of 2025, "Fast Money" offers invaluable insights and strategic recommendations to capitalize on emerging trends while mitigating risks.

Notable Quotes with Timestamps

• Tyler Matheson: “A choppy start to 2025: Does this portend an end to a two-year mega rally?” [01:41]

• Karen Feinerman: “I don't think... I like the ones that I own Apple.” [03:14]

• Guy Adami: “There are times where Apple is a legitimate trading vehicle... if you're a believer in the long-term secular story, it's one that you should own and hold onto.” [03:37]

• Courtney Garcia: “There are a lot of stories surrounding AI that aren't going away anytime here in the near future.” [06:38]

• Manawan Isaac: “Vistra Energy... this stock has been reinvigorated by this whole phenomenon.” [07:18]

• Chris Harvey: “Equities are going to go up this year, but people are going to put on too much risk.” [10:55]

• Emily Wilkins: “It would only take two lawmakers to deny Johnson the gavel.” [18:44]

• Chris Harvey: “Barbell something defensive with something you like, garbage. Something a little bit more cyclical.” [12:24]

• Manawan Isaac: “Crude oil is surprising people to the upside... energy stocks start to play catch up into the valuations.” [38:46]

• Courtney Garcia: “I'm looking at this as an opportunity could absolutely.” [41:14]

Note: All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, or their affiliates.