← CNBC's "Fast Money"
CNBC's "Fast Money"
Market Impact From A Rate Cut, And Nasdaq CEO On Exchanges, IPOs, and More 8/13/25
00:35:49
Treasury Secretary Scott Bessent calling for a 50 basis point rate cut by the Federal Reserve. The potential impact that could have on stocks, yields, and your wallet. Plus Nasdaq CEO Adena Friedman weighs in on trading, exchanges, the IPO pipeline, and more. Fast Money Disclaimer
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- [00:01]
Melissa Lee
Want to quickly create and execute trading.
- [00:03]
Tim Seymour
Strategies to help keep up with the markets.
- [00:05]
Karen Feiderman
With Fidelity Trading Dashboard, you can access.
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Tim Seymour
Live data, advanced charting, portfolio insights and automated alerts all on one screen. We streamlined the trading experience so you can build and place trades better. Your Fidelity Trading Dashboard is ready now. For free, visit fidelity.com tradingdashboard Investing involves.
- [00:26]
Melissa Lee
Risk, including risk of loss.
- [00:27]
Tim Seymour
Fidelity Brokerage Services, LLC member NYSE SIPC.
- [00:32]
Guy Adami
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.
- [01:04]
Rick Santelli
Live from the Nasdaq markets at the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Treasury Secretary Scott Besson calling for a big cut from the Fed. But what would drastic but that would drastically lower rates. What would that mean for stocks, for yields and for the consumer will lay out the possibilities and the state of exchanges. Shares of NASDAQ have been rallying this year as markets themselves and new records. We'll find out what's behind the move and get a pulse check on the market for the IPOS forum Nasdaq CEO Dana Friedman. Plus we're dialed in on Cisco earnings and the big move in shares Amazon upping the ante in the grocery game. What it means for both legacy companies and upstarts and shares of biotech Inside trading near 25 year highs after its latest FDA approval. What is next for the name and where this stock goes from here? I'm Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Feiderman, Dan Nathan and Guy Adami. We start off with that big call from the treasury secretary in an interview this morning, Scott Bess and telling Bloomberg that the Fed should cut rates by 50 basis points next month and that ultimately rates should be 150 to 175 basis points lower than they are right now. That got us wondering what would that mean for the markets starting with stocks. The S and P and Nasdaq hitting records today. But it was a long underperforming small cap Russell 2000 that saw the biggest gains two out of favor groups and sectors rebound. If rates drop. I think we would all agree that rate equities would probably rally. Where would the rally be most Pronounced.
- [02:30]
Dan Nathan
Well, you're seeing it in small caps. No question about it. And I think Karen spoken about this as well. I'll say this, we talked about it last night. It was this time last year that the market started pricing in six rate cuts for 2025 and the market through the lens of the S and P was significantly lower. So the market has rallied. Now we're starting to talk about more rate cuts. Personally, I think it's all priced in, but quickly it's. I find it fascinating and listening to Treasury Secretary Bessant talk about the reasons for these rate cuts are the softening job market, which you know what, maybe it is a softening job market. With that said, what we heard from the administration last week was those revisions were rigged and it was a political hit job. So you can't. My point is you really can't have it both ways. Either the job market is softening and the revisions are legit or the revisions weren't legit and the job market is robust. So pick a side, I guess is.
- [03:26]
Rick Santelli
My point with that.
- [03:27]
Dana Friedman
Yeah. So I agree with you. Agree with me on the small cap, which that's not news. Right. But to the extent that there is borrowing there that is fixed, that could be set lower, that's huge. I think anyone with a not great balance sheet. Also if you look at who has really been hurt by higher rates, which is some of the commercial real estate. Right. We've got a lot of paper coming due to the extent that that could be cheaper. That would be a good place to rally. But also, you know, it's just math and that discounted cash flow, if you're using a lower rate, you know, you get a higher multiple, higher stocks.
- [04:01]
Karen Feiderman
Yeah. You know, the fact that the stock market in certain sectors has run ahead of that and you guys just mentioned the Russell 2000 small caps. Look at homebuilders today. I mean, huge. Like just the fact that they are already kind of going in there and taking that performance, whether it happens or not is a very odd thing to me. I get the reflex sort of reaction to some degree. I think a lot of investors are looking to play catch up in some areas that they think they've been kind of suppressed because of the high rates. But then you think about it this way. Okay. Like last year at this time, the same debate was happening about the labor market. And you know, I think the Fed at that point was probably a bit more confident that with 3.2% CPI, I think that was the July number or so at this point that it was going down in the direction that they wanted it to go down. The market was not pricing in trade war at that point. Right. And you had unemployment that was below 4%. And right now we're at 4.2%. Right. And then GDP growth, the first half of 2024 was basically one and a quarter. Well, that's where we were this year. So for all intents and purposes, the big change right here is that unemployment is going the wrong way. Part of this dual mandate, and now inflation, part of the dual mandate is probably not going much lower that quick. And so I just think about this from a growth perspective. The thing going forward, if we have 15% base rates on a lot of the imports that are coming in and then many from China at 30%, that has to weigh on growth. And you know, I think I just said this or I heard him say it earlier today or something like that, is that we just really haven't seen, I guess, you know, I mean, the headwinds from higher prices just yet. We've seen plenty of scenarios whether it was the autos where the companies were willing to kind of eat that cost right now, but a lot of them, if you still see unemployment going higher and you see growth, they're not going to be able to do that.
- [05:45]
Rick Santelli
Can I. But I mean, nothing happens in a vacuum. Right. And so the impact of tariffs could still yet be felt, Tim. But at the same time, the offsets could be lower rates, lower borrowing costs, other savings from the one big beautiful bill in terms of, you know, expensing research and development, for instance. I mean, there are other offsets potentially that could help growth even if tariffs weigh.
- [06:10]
Tim Seymour
Yeah, and I think that's the whole argument for rates. I think the administration is arguing that too, that there's there, there is an unnecessary headwind. Whether it's 150 basis points, I don't know. And my guess is that hedge fund manager Besant felt a lot different about the Fed's role in stimulating the economy than Treasury Secretary Bessen feels. I also think the conversation we often have on the desk, we had a bit of it last night, which is that we don't know what the long end is going to do. We know that on the short end that really does help those folks that are pinned to short term borrowing and those dynamics that really are moving, the yield curve has steepened. We also know, and we had this conversation also last night, that liquidity is extremely high. So I think equities will continue to rally. And I think back to your Original question is what performs in that 150 basis point cut environment. I think you're barbelling this thing. I think you're grabbing high multiple tech where those discounted cash flows are farther out in the future, they don't make money, etc. Or the ones that don't make a lot and have very expensive price to sales ratios, those are going to rally. I think the mega caps will. And then I think the other side of your barbell is the value part. And look at where we're starting to get some breakout. We've had the breakout in financials. They will continue to do well. Look at health care. Today was a really interesting day in health care. There's a lot of headwinds from Washington there, but I think that's another place to play.
- [07:33]
Rick Santelli
Yeah, nice gain today. More than a percent consumer discretionary also gaining.
- [07:37]
Dana Friedman
Right. So there's one thing I've sort of been thinking about is very much positive, which is productivity gains, which I think will be very real. However, the other side of productivity gains is I think white collar job loss that could be important in, you know, white collar jobs. Those are high paying jobs that, you know, flow through the economy in a lot of ways. I don't know, I don't think we have a good sense of how that will all shake out. I think we'll see jolts higher because some jobs can't be filled because we just don't have the enough people to fill them.
- [08:09]
Rick Santelli
Right.
- [08:09]
Dana Friedman
On the sort of lower end of the right blue, more blue collar jobs. But the white collar job thing and the productivity are I think two very interesting sides of the same issue.
- [08:19]
Karen Feiderman
Yeah. I had a meeting today with a VC who only invests in AI companies that are going for job cuts. Like that's it. Right. So like really pointed, you know, processes, that sort of thing. He also said to me that the coding space, these folks that are coming out of Stanford and MIT and there was an article in the Wall Street Journal a couple days ago, they're in big trouble. Yeah, and he's like right out of the gate because you don't need that entry level thing now. A lot of those folks are geniuses. They probably already built all these crazy models and, and like you're like you're William, you know what I mean? That sort of thing. But a lot of these knowledge jobs seem okay for now, but a lot of those call center stuff and that's not exactly white collar, but there's a lot of processes. He's going to take the under I'm going to take the over when it's really disruptive, when it's really adding a lot of productivity gains. Because if you think about trust is really important. Right. And we were just talking about this using GPTs before. It's going to take a while before you're allowing an agent to do something. You know what I mean? Like there's a whole host of things that I just think are going to take a bit longer. But the point is that is is going to be a massive headwind to, you know, job growth going forward. Make no mistake about it. So I just think that that's something that there are certain industries you don't want to be near and one of them, we talked about it last night, enterprise software is like just a really bad place to be in the markets. In the market where investors are already starting to discount that a bit.
- [09:33]
Dan Nathan
The offset to the offset though this is consumption services dominated economy. So theoretically all those production gains are going to come at the cost probably of jobs and people start losing their jobs. This service consumption based economy doesn't do particularly well in the short term. So there are offsets to offsets here I think.
- [09:54]
Rick Santelli
Offsets to offsets. So we're back where we saw you.
- [09:57]
Dan Nathan
Asked the offset question. I mean it's of course it is wondering the conversation, you know what else people are wondering before we get sure they are.
- [10:04]
Tim Seymour
No, they are.
- [10:05]
Dan Nathan
Quickly, Tim was scheduled to be on the desk this evening. The keen eye will notice that he's not with us. Yes, I just wanted to let people know that Tim is having pipe problems.
- [10:14]
Rick Santelli
He had to be home. Yes, we'll leave it there in terms.
- [10:18]
Tim Seymour
Of rates, personal stuff guy. Thank you, thank you.
- [10:21]
Rick Santelli
But just quickly we, we talked to Subhadra yesterday night about rates and Tim, you alluded to it but you know, are we to believe that the 10 year in this environment where rates will come down 150, 175 basis points from where they are now that the 10 year stays firm and in the range.
- [10:41]
Tim Seymour
I'm not sure and the trends on the rest of the world we could be having a conversation about higher rates, higher 10 year bond, higher 30 year bond for sure. JGBs higher 30 year in Japan, rates are going higher in other parts of the world. We've actually had a pretty sideways run here. I think that's something to watch. We don't know. We know that the long end of the curve is responding to both inflation and technical factors. Issuance and the overall trust and the term premium as we say in The US Government. Those are all things that at least have had a fair amount of conjecture. And I think it's, it's important. But I ultimately just get back to the trends we have for the market right now are very bullish for international. I think the dollar is going to continue to weaken up. I think some of the trends around mega cap tech stocks and look at, look at where we've gone in terms of making new relative highs. So I think those are the things that the market can do. We've seen this before too. And when we've been expecting Fed cuts, it's something to think about. The one thing I would worry about, and I don't know that we're close to it is much in the same way that the equity market took off like a rocket when we had peak inflation. When we start to feel that inflation is done and that there's, there's really nothing left to that concern, I actually think that equities might run into some trouble. I know that sounds counterintuitive, but again, you'd be selling that news.
- [12:02]
Rick Santelli
All right, let's get more on where rates could be headed with cnbc, his own Rick Santelli. Rick, it is great to see you. I want to start off with where, where Tim sort of left off in terms of we're not the only player in terms of dictating where rates go. There's a whole global rates market. The German 30 year for instance, hit its highest since 2011 just yesterday. So there's a whole other dynamic going on. Where do you see rates headed if we are to be lower by 150 basis points?
- [12:30]
Scott Bessen
Well, I have some charts but before I get to those, I largely agree with Tim. I don't pay as much attention to the 30 year whether it's in Japan or whether it's in the US but it is a long dated security. So we want to pay attention. I'm paying mostly attention to tens, but Tim said kind of sideways to higher. I couldn't agree more. Whether you look at the uk, whether you look at the eu, whether you look at Japan, the US the reason long rates are going to stay stubbornly high and what we all share in common is debt, debt and deficits. And that will mean issuance and boom yields turned around the last couple of days for exactly that reason. Now I have a couple of tricks on why I think rates are going higher. Let's go to the whiteboard. All right, here's 10 year yields and here's one trick I always like midpoints. Okay, so if we look at 470 in April of 24 against 362. Key bottom the average there, the midpoint there is 416. If I keep the 362 and look at 479, the midpoint there is 420. 416 is the red line, 420 is the blue line. It's been somewhat magical. I would think that we're going to hold above that and mostly sideways. Any close for a Friday, for a week below 416, make it even 415, that would reverse my case study for higher rates. All right, now let's go to one of the tricks that I like to do and that's the 30 minus 10 spread. Affectionately known as the knob. It is now the widest Since Sep of 21, let's call it four years. And when those spreads widen out, that usually tells me rates are going to be high on the long end. But it isn't only the 30s -10s. It's also 10s -5s known as the fight spread. Same scenario at 47 basis points, it's the widest. It's been basically in four years. So we have wide spreads, we have key technical, simple ones along with moving averages that this sideways is a good congestion level to build on. I think in the end of the day curve steepening is the way to go. I do think two year yields are going to come down but I don't see tens, twenties or thirties following the game. Melissa Lee, back to you.
- [14:46]
Rick Santelli
So you think that finally we're going to see the, I mean sideways to higher. But for so long we didn't trade on the fear about deficits, about all this issuance coming and so now it's going to hit and we're actually lowering rates.
- [15:02]
Scott Bessen
Why not? After we started this year the lowest close we had is 4% and it bounced off there big time, big time show year to date chart, you'll see that 4% spike. So to me, yes, what it says is that we're not necessarily going lower. How much we build is going to depend and I do think, I do think that it isn't necessarily going to be inflation that's the biggest driver of the long end. I don't really buy the stagflation argument. I think we're going to have lots of whiffs of it. But in the end I'm kind of with Rick Reeder here. I see good things bubbling up. I see the offsets that you've all been talking about. I do think the economy is going to be cooking in Greece much better than many think. And I think that's another reason the curve steepens and the long end goes higher.
- [15:49]
Rick Santelli
All right, Rick, good to see you. Thank you so much. Rick santelli. Well, that would be a disappointment to the administration if the 10 year yield does not come down. If we don't see mortgage rates, for instance, come down, we don't see those borrowing costs.
- [16:03]
Dan Nathan
However, if the reason for those rates going higher is what Rick just said, because growth is going to be robust, I mean, I think that will be acceptable. It won't be they won't be thrilled by it. I think they'll learn to understand it. I think the flip side, this is just me, I mean, treasury for a while and this happened under Janet Yellen. They're trying to do the whole bills thing and to try to push out what should be inevitable. And I think Treasury Secretary Besson thinks that as well. I think in his heart of heart he believes that yields will come down at some point that will allow them to start issuing longer dated stuff. That's a high game steak of chicken right there, in my opinion.
- [16:36]
Rick Santelli
Yeah. What happened to the homebuilders? And we saw homebuilders having a nice day today on the premise that rates will come down in a meaningful way between here and the end of the year or so. And so if we are to believe that rates will not come down, they will remain stubbornly high. Is that little bounce that we saw, I mean, that's all overdone.
- [16:55]
Dana Friedman
Yes. Yes, I think that's right. I think rates, if they stay around here, then then I think that the sector is ok. But if they start to move up at all, I think, yeah, a lot of those gains will evaporate.
- [17:10]
Karen Feiderman
It was interesting how quickly the Money center bank sold off. You made a great point last week, you know, like or last night, you know, about how that yield curve and going in the direction is really good for the banks. And it was just kind of interesting to see a knee jerk reversal of that today. And then obviously the opposite of what happened, I think with homebuilders.
- [17:27]
Rick Santelli
All right, we've got an earnings alert here on Cisco. Shares are lower after hours despite a top and bottom line beat. Christina Parts and Lovelace has been listening in on the call. She joins us now with the details. Christina, I'd like to say that the.
- [17:37]
Christina Parts Nevelis
Shares have reversed a little bit. They're not as low as they were before. And the reason why we saw that initial reaction is that the midpoint of the guidance was Just relatively cautious. And you have all of these companies spending so much money on infrastructure. Cisco is providing, you know. Well, they say not just the back end, you know, everything, not just networking. But you would expect Cisco to be more of an AI winner. They did say that they booked $800 million in AI orders, up from 600 million the previous quarter. But those are orders, it's not actual revenue dollars. And so that was the concern from a lot of people. When are they actually going to provide us with numbers? Well, just moments ago and I texted the pr, I was like bam, there's your statement. They said they roughly got $1 billion of revenue on AI back end orders in fiscal 2025. Chuck Robbins, the CEO who is going to be on CNBC tomorrow morning, did reiterate too that they don't guide specifically for AI revenues, but you can extrapolate from that $1 billion revenue number what that'll mean for fiscal 2026. And then they also said they haven't seen any indication this is from the CFO of pull forwards, all of the tariff stuff and that the AI narrative still has steam to go for them. And so really I think it was just finally putting a number to justify even the Ford PE which has climbed above the five year average for Cisco. So some people are questioning whether this was really an AI winner.
- [18:55]
Rick Santelli
Yep. Christina, thank you. Christina. Parts Nevelis Tim, this is your Cisco.
- [19:01]
Tim Seymour
It is. I'll take it and I'm long it, so it's mine. And I think the stock's going to be up tomorrow. I think it's outperformed the entire mega cap tech space other than Nvidia. So if I throw in the top 20 market caps, it's up 60% on a rolling 12 month basis. Most importantly, it's not expensive. And most importantly we listen to the company. What they said was a demand for AI infrastructure from web scale customers came in two times their expectations. So they are seeing it, they're also talking about it. And in terms of what moves stocks, I think that discussion is part of what's going to take the stock higher. But it's been a great run for Cisco. It's not expensive. I think they have a much more predictable earnings stream than they had they've had in a long time. And this is good cyclicality because historically it was bad cyclicality when things were concerning. I like Cisco.
- [19:50]
Dan Nathan
Yeah, I think the valuation is absolutely reasonable, especially in this environment. Might be rich historically, but the world's changed. Without question, they did $800 million in revenue I think last year they said they would do a billion this year Tim just said it and Christina said it, they doubled it. It's too so I think valuation you could ratchet it up a couple notches on the Cisco front for sure.
- [20:10]
Rick Santelli
Coming up, prime delivery setting its sights on a bigger market. How Amazon's expanding its grocery plants and the impact it is having on delivery competition. That is next. Plus more fast movers from today's session. The massive surge in Paramount Skydance, a crypto exchange soaring in its market debut and a China tech check as the group rall month highs do not go anywhere. Fast Money's back in two.
- [20:37]
Guy Adami
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Karen Feiderman
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Rick Santelli
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- [21:24]
Rick Santelli
Welcome back to Fast Money. Amazon expanding its same day delivery service of fresh foods including meat, eggs and produce. The service we launched in a thousand more cities and towns by the end of the year bringing the total number of delivery zones to 2300 in the US delivery stocks and traditional grocers all sinking on the news. Instacart seeing its second worst day on record. DoorDash dropping about 4%. Wedbush had an interesting note out on Amazon specifically saying that basically this is an area where they have yet to oust the incumbent. The assumption that Amazon is going to make some headway here. Are you concerned about a Wal Mart let's say.
- [22:00]
Dana Friedman
Well I'm long Amazon too so I think Wall Walmart's they're both expensive actually I'm not concerned yet for Wal Mart but I think, I mean Amazon you can't, you can't argue with the power of Amazon. But Walmart has also shown their ability to innovate to get things faster so could be game on for both.
- [22:21]
Karen Feiderman
You know it's interesting. So this is obviously groceries which is kind of apples orange when you think about ubereats in general but they have those sorts of partnership. Uber Eats is, you know, 25% of the market. You look at a company like that, it really didn't budge today. Right. Relative to what you saw in Doordash which has, you know, I think 65% of that market, I would say that Uber has an opportunity in this space also if you think about just that, you kind of the network that they build out and you know, the unit economics were like a real issue for these companies a few years ago. They saw that huge surge during COVID Well, they've obviously got a lot better here. So you see Amazon, I think these guys knew Amazon was coming in the space. I don't think this is a huge surprise. It might be to investors who are selling the stocks off. But again I would expect those stocks to kind of get back some of those losses in the not so distant future.
- [23:03]
Dan Nathan
I agree with both Karen and Dan and you know Uber, when they saw the news it traded from 92 and changed down to 90. Walmart down to 100. But I think they're set up, they're probably those two companies, Wal Mart more so set up to take this on. And I think Wal Mart reports on 21 August that stock has been resilient in the face of valuation in the face of a lot of different things. I think you've got to stay with Wal Mart here.
- [23:25]
Rick Santelli
I mean for, for Amazon there is a point made that three quarters of the people who actually ordered perishables this year, Tim, they were new to this. That was the first time that they had done that this year. So the penetration that could happen with this is tremendous when you think that it's free for prime members. So it's just that a few extra people, you know, trying this out can mean a lot.
- [23:48]
Tim Seymour
But hasn't Walmart been given credit for taking some of that same also same day service or at least the delivery and the Walmart plus customers from Amazon, I don't know, Walmart is set up like Amazon with the walk in places. I mean every one of these warehouses is a fulfillment center. And this is why I think a lot of the investment they've made in technology is something I think they can counter this whether they want to or not. They probably will whether they have to or not. Grocery has been the dynamic that have gotten more people, more, you know, more, more of a demo into their stores. I don't see why that changes now. And Walmart plus allows for a lot of the same options.
- [24:27]
Rick Santelli
There's a lot more fast money to come. Here's what's coming up next.
- [24:32]
Karen Feiderman
A monster move in media, a crypto exchange surging in its debut and a check on China Tech. The trades on all of today's big market action, plus key moves in the biotech space, the details behind one company's latest FDA drug approval and what the CEO sees in store for the industry. You're watching Fast MONEY live from the NASDAQ market site in Times Square. We're back right after this.
- [25:07]
Tim Seymour
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Tim Seymour
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- [25:37]
Guy Adami
Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at capella. Edu.
- [26:10]
Rick Santelli
Welcome back to FAST Money. Stocks continuing to climb the Dow, jumping more than a percent and closing less than a half percent from its record. The S and P and Nasdaq both closing at all time highs again. Shares of Paramount Skydance leading the S&P 500 today up nearly 37%. 37%. Earlier this week, the company announced it was buying the US Rights to UFC matches and events in a seven year deal. Other media names like Warner Brothers, Discovery and Comcast, our parent company also hired today and crypto exchange Bullish making its market debut today. Shares of the Coindesk owner, priced at $37, open at 90 and surged nearly 220% at one point. But they hit they at $68, a gain still of 83% and Apple nearly 2% higher today. The tech giant reportedly planning to expand its AI plans with a slate of new devices, including robots, a lifelike version of Siri, a smart speaker with display and home security cameras. And China Tech climbing the K Web up more than three and a half percent, posting its highest close since March. Tim, what do you make of the move in China Stocks.
- [27:15]
Tim Seymour
I think it's impressive. It's once again a repositioning by both the government and the sector itself as being the beneficiary of the focus and the push to elevate the game in China. And the government's behind them, not right in front of them knocking them down. Tencent had earnings out. They were fantastic numbers. They have a number of different segments that are working but AI is underpinning many of them, including ad tech. This has outperformed the K Web by 10%. It's actually outperformed Alibaba over the last month or so. And I think it's, it's arguably one of the more interesting tech incubators in the world that doesn't again some of the parts dynamic. You can buy it here in the OTC pinks. It's quite liquid. So we don't often talk about the ability to buy stocks there. But I am long the name and I continue to think Tencent is one of the most interesting and important tech companies in the world.
- [28:05]
Rick Santelli
Another hot IPO today.
- [28:07]
Dana Friedman
Yes, in bullish. Bullish.
- [28:10]
Rick Santelli
Be careful how we say that.
- [28:11]
Dana Friedman
Well, I saw the ticker and I thought it was something else actually. Blsh But I mean clearly a very successful ipo. I mean.
- [28:21]
Rick Santelli
And I'm sure Tom Farley, obviously the president of the NYSE was very aware of.
- [28:27]
Karen Feiderman
Oh, by the way, a very hot man. I got to tell you too, Thomas.
- [28:32]
Dan Nathan
He's a very hot man.
- [28:34]
Dana Friedman
Yes.
- [28:35]
Dan Nathan
Georgetown grant, by the way, in case.
- [28:36]
Rick Santelli
You'Re not afraid to say that.
- [28:38]
Tim Seymour
Yeah.
- [28:38]
Dana Friedman
I mean there's nothing hotter than a crypto platform.
- [28:42]
Karen Feiderman
Let me say one thing about this. If you're looking at some of the numbers, I think in Q1 they did like a few billion in trading volume.
- [28:49]
Dana Friedman
1.
- [28:50]
Karen Feiderman
That's what, that's what Coinbase does in a day. So the one thing I would say is like I think there's a huge opportunity. I think there's going to be a lot of, you know, like compression of fees, that sort of thing. And I think if you're an upstart like this, you're going to go after that volume.
- [29:03]
Rick Santelli
Coming up, the state of the market as stocks hover near all time highs. NASDAQ CEO Adena Friedman joins us next to lay out what she is seeing in the IPO market. Retail trading trends and the future of exchanges. That is next. Fast Money's back into.
- [29:18]
Karen Feiderman
Missed a moment of fast. Catch us anytime on the go Follow the Fast Money podcast. We're back right after this.
- [29:33]
Rick Santelli
Welcome back to Fast Money Inside trading at highs not seen in a quarter of a century after the company clinched FDA approval for its first in class drug treating a form of chronic lung disease. The company estimating the drug could top $5 billion in peak sales for this indication alone, with a patient population of as many as 500,000 in the U.S. joining us on the set for more is InSmet CEO Will Lewis. Will, welcome back. Congratulations on the FDA approval. This is the first DPP1 inhibitor for non cystic fibrosis bronchiectasis.
- [30:05]
Melissa Lee
Well done.
- [30:07]
Rick Santelli
So in layman's terms, what is that? What does this drug do?
- [30:10]
Melissa Lee
Well, yesterday was a very important day for patients with this disease. Bronchiectasis is a condition that has been around and diagnosed since 1819. So for more than 200 years, companies have been trying to develop a drug to treat this disease and have all failed until yesterday. And so this really marks a breakthrough for patients with this condition.
- [30:30]
Rick Santelli
You, in your press release, put out a total addressable market, potentially of $5 billion in sales. There are higher estimates. Guggenheim, for one, has an estimate that's $7.3 billion. And they say that the market could actually be bigger because with FDA approval, it brings patient awareness and doctors may be more willing to diagnose the disease, the problem if there is a treatment. Would you agree with that, that there is that sort of elasticity to how you think about the tam? The tam, I would.
- [31:01]
Melissa Lee
And I would say that when you think about the 500,000 patient number, that really represents patients who are diagnosed today. Behind that number, there are patients with other comorbidities that may also have bronchiectasis, but because of a lack of availability of any drug, have never been diagnosed as such. A good example of that are patients with COPD or asthma. We had roughly 18% of our patient populations in the clinical trials that had that comorbidity that were benefiting from the drug. And that opens a very substantial door because there are 32 million people in the US that have COPD or asthma. So if some portion of them also have bronchiectasis, they would be on label for the use of the drug.
- [31:38]
Rick Santelli
You recently raised $750 million for the commercialization of this drug. Is it your intent to go it alone or are you still, would you still be open to partnering?
- [31:50]
Melissa Lee
We will go it alone. This is our second drug that has been approved. And so the commercial infrastructure that we have in the U.S. europe and Japan is directly relevant to this effort because that drug calls on pulmonologists. This drug Calls on pulmonologists. So we're getting the benefit of that leverage from that existing salesforce now. We've augmented it quite a bit for this launch. But I always like to say that this is really just the beginning. You mentioned DPP1 is a mechanism beyond bronchiectasis. We're studying it right now in two other disease indications, CRS without nasal polyps and HS, both of which will read out in the next 12 months.
- [32:26]
Dan Nathan
The analyst community is starting to figure it out. You mentioned, I think, Mizuho, Goldman Sachs, a lot of people raising price targets. First of all, congratulations. Second of all, I think when you first came on here, 50ish dollar stock, you see where it is now. Three major drugs, $25 billion market cap. You start doing the math and thinking about where this should be. I mean, you probably, and I know you don't want to play the game, but your four or five turns probably still too cheap given what the outlook could be for those three names specifically. You want to sort of speak to that?
- [32:56]
Karen Feiderman
Sure.
- [32:57]
Melissa Lee
Well, each of these drugs that we're talking about, Ericase or brinsocative or the one that we just put out data on, which had me on the show the last time, tpip, they all have not only their initial indication, but the possibility of broader applications in other disease states. DPP1 as an example, we like to refer to that as a skeleton key that may be able to impact any neutrophil mediated disease. And so while we're Targeting those first three, we have since developed some 850 additional formulations of DPP1s that we'll be bringing into the clinic starting next year, going after diseases like rheumatoid arthritis and irritable bowel disease. So this is really just the tip of the iceberg.
- [33:35]
Rick Santelli
Basically, we think about DTPV1 as an enzyme that has to do with inflammation. So inflammatory diseases. Yes, that's sort of the way to think about the skeleton key.
- [33:44]
Melissa Lee
Yeah. And it applies very broadly. So CRS without nasal polyps affects obviously the nasal passage. HS is a dermatologic condition. So while they appear unrelated to one another, it's the fundamental biology that you're touching when you unlock something like that. The opportunity is enormous. Think about PD1, think about GLP1s and the opportunity they represent. This is the kind of mechanism that I think we've unlocked.
- [34:09]
Rick Santelli
Will, great to have you. Hope you'll come by again and update us on all these other readouts.
- [34:15]
Melissa Lee
Happy to do so.
- [34:15]
Rick Santelli
Will Lewis, CEO of insmed you said it. The last time Will was on stock was in a very different place.
- [34:21]
Dan Nathan
No, he's done a remarkable job and congratulations to him and the entire team. And again, people will look at this and say it's run too much. It has not. This is. You said it. He's still here. So I did not bring back the guest, but this is early inning stuff. You got to stay long this name.
- [34:35]
Dana Friedman
So when you think about what ails the pharmaceutical industry right now, one of the things we come to again and again, patent cliff and everybody look to buy, right?
- [34:42]
Rick Santelli
Sure.
- [34:43]
Dana Friedman
And you can't help but think, think this has to be on the radar screen of everyone looking for top line.
- [34:50]
Rick Santelli
Coming up, no concealer for this trade. The glow up highlight in the beauty stocks and whether the bronze or bump has a strong foundation. That's next. More fast money in two. Welcome back to Fast Money, a bullish blush for beauty stocks today. Shares of Elf, Estee Lauder and Ulta all seeing outsized gains. The stocks are up 40% or more since our April lows. Tim, as you said before, it may be too late for your bicep trade, but is it too late for the trade?
- [35:25]
Tim Seymour
No, I think it's very early in the recovery and this is somewhat independent of where we are in the, in the economic cycle. So category improvement that includes China is a little better, not a lot better, but a little better. Travel retail is certainly better and we've heard, you know, some mix from lvmh Prestige Beauty, which obviously Guy knows a lot about, is actually the one place where you've got high single digits. So beauty is, is as a category is holding up and we heard that from Amazon in terms of Prime Day, etc. So I just think often as we, as we look at the turn in stocks and in sectors, it's that small improvement that goes a long way. This doesn't have to be a fantastic outlook and some of these stocks are priced reasonably well. Estee Lauder is not cheap. It's really a combination of where the trends have actually started to be. They have bottomed and they're starting to improve. And we have some, some changes in the C suite which is very good for the company as well.
- [36:21]
Dana Friedman
So Alto, which I like, I think, I mean it's had a really nice run. It didn't sell off that badly relative to some others. But I actually think it's starting to get a little bit expensive to itself and would be selling calls, upside calls.
- [36:33]
Dan Nathan
Tim likes to make fun of me, as he should, but I love prestige beauty and little known fact we've been talking offline about me potentially being like a spokesperson for prestige.
- [36:45]
Dana Friedman
When you say we've been talking offline.
- [36:47]
Dan Nathan
Like with whom I'm not at liberty.
- [36:51]
Tim Seymour
Can't talk about it.
- [36:54]
Rick Santelli
All right, up next, final trades. Time for the final trade.
- [37:09]
Tim Seymour
Tim Seymour, one of guys beauty consultant knows he's got a leaky fountain. Anyway I know that K web and investment in China tech is beautiful and I would stay long that trade.
- [37:22]
Dana Friedman
Karen yes in the regional bank space Pinnacle Financial partners and I do like.
- [37:26]
Rick Santelli
To snail for this merger.
- [37:28]
Karen Feiderman
Dan yeah, like Tim, I think you stick with the B in guy's tube. That would be baba guy looks like it wants to what party and it's.
- [37:35]
Rick Santelli
The A in carved. Come on. Obviously.
- [37:38]
Dan Nathan
Yes, a few things FDNY event is amazing. An update. My fountain has been fixed. Took care of it this morning. In case anybody's concerned and Nasdaq, Adena's a badass.
- [37:49]
Rick Santelli
She is. Thank you for watching Best Money. See you back here tomorrow at 5. Mad Money with Jim Crane Resorts. Now.
- [37:59]
Guy Adami
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.