Markets on edge as tariff deadline looms & the future of vaccine development in the FDA 3/31/25

Summary

CNBC's "Fast Money" Podcast Summary

Episode: Markets on edge as tariff deadline looms & the future of vaccine development in the FDA
Release Date: March 31, 2025
Hosts: Melissa Lee, Tim Seymour, Karen Finerman, Dan Nathan, Guy Adami, Kavita Patel, Julian Emanuel, Steve Liesman

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1. Market Overview and Tariff Deadline

As the tariff deadline approaches on April 2nd, markets remain on edge. The impending 25% tariff on autos and imports from countries buying oil from Venezuela, along with expected reciprocal tariffs, have created significant uncertainty.

Melissa Lee highlighted the gravity of the situation:

"Markets on edge as the date approaches." ([01:13])

Panelists discussed the potential for increased volatility, with Tim Seymour noting the absence of a "clearing event" that could provide market clarity.

Steve Liesman agreed, suggesting the "path of least resistance is lower" for the markets:

"I think tariffs are just part of the reason the market's going lower." ([08:05])

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2. Q1 2025 Performance and Sector Analysis

The first quarter saw the S&P and Nasdaq experiencing their worst performances since 2020, with the consumer discretionary sector bearing the heaviest load.

Melissa Lee summarized the performance:

"All three major indices are sharply lower so far this year." ([01:13])

In contrast, sectors like defense, energy, healthcare, and staples showed resilience. Guy Adami emphasized the defensive sectors' strength:

"Defensive stocks had huge days." ([04:46])

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3. Federal Reserve Insights and Economic Policy

Discussions delved into the Federal Reserve's stance on interest rates amidst economic uncertainties.

Tim Seymour referenced Richmond Fed President Tom Barkin's cautious approach:

"It's perhaps not wise for markets to be certain about rate cuts this year." ([09:19])

Julian Emanuel and Steve Liesman echoed concerns about potential stagflation, highlighting the Fed's challenges in balancing inflation and economic growth.

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4. Core Weave and Tech Stock Concerns

The episode addressed the troubling performance of AI cloud provider Core Weave, which saw its stock plummet below its IPO price shortly after going public.

Christina Parts Nelson from DA Davidson criticized Core Weave's financial practices:

"Depreciation removed from COGS inflated the gross margins up to 74%." ([23:33])

Panelists expressed skepticism about Core Weave's sustainability, citing high debt levels and questionable accounting methods.

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5. Alphabet (Google) Downgrade

Melius Research downgraded Alphabet to a "Hold" rating, drawing unfavorable comparisons to Eastman Kodak.

Julian Emanuel commented on the rollout issues:

"The rollout was bad, and the sense of urgency is lacking." ([41:11])

Concerns were raised about Google's ability to compete with emerging AI models, potentially eroding its search dominance.

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6. Live Nation and Ticketmaster Challenges

President Trump's announcement targeting ticket scalping impacted Live Nation's stock, causing after-hours declines.

Kavita Patel differentiated between primary and secondary ticket sales:

"80% of Ticketmaster's sales are primary." ([42:04])

Panelists discussed the potential backlash from dynamic pricing models and the broader implications for the ticketing industry.

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7. Gold Prices and Precious Metals Surge

Gold continued its upward trajectory, reaching a fresh all-time high and marking its best quarter since 1986.

Steve Liesman attributed the rise to global economic uncertainties:

"Gold is moving to the upside in every environment." ([32:26])

The panel debated whether gold's bull run could sustain, given its historical resilience.

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8. FDA Official Resignation and Biotech Impact

The abrupt resignation of the FDA's top vaccine official, Peter Marks, caused significant turmoil in the biotech sector. Stocks like Biontech, Novavax, and Moderna plummeted.

Dan Nathan expressed deep concerns:

"This brain drain is not going to result in anything." ([34:04])

The discussion highlighted potential delays in drug approvals and the broader impact on biotechnology innovation in the U.S.

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Conclusion

The episode provided a comprehensive analysis of current market tensions surrounding tariff implementations and the destabilizing effects of political influences on the FDA. With sectors struggling and gold rising, investors are navigating a complex landscape marked by policy uncertainties and sector-specific challenges.

Notable Quote:

"Nobody knows how all this shakes out." — Dan Nathan ([11:03])

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This summary captures the key discussions and insights from CNBC's "Fast Money" episode aired on March 31, 2025.

Transcript

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[Karen Finerman]

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[Melissa Lee]

Live from the NASDAQ markets out in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. Three months to forget. From tech to airlines to housing and Beyond. Stocks finishing Q1 in the red. And with tariffs set to take hold this week, detraders need to brace for some of the same. Plus biotech blues a key FDA official resigning in protest over RFK Jr. S views on immunizations and vaccines. The sector falling on fears that politics will trump medical science Trump but investors worry we'll debate that. And later, the crumble of core Weave shares continues. Gold hits another all time high. Can it keep climbing? And we will break down why one tech analyst is mentioning Google and Eastman Kodak in the same sentence. Yikes.

[Guy Adami]

Ouch.

[Melissa Lee]

I'm Melissa Lee. Come to you live from CEO B at the Nasdaq. On the desk tonight, Tim Seymour, Karen Feineman, Dan Nathan and Dai Adami. And we start off with a countdown to so called Liberation Day Wednesday April 2, when a 25% tariff on autos and imports from end any country that buys oil from Venezuela go into effect. We're also expecting announcements of reciprocal tariffs. Markets on edge as the date approaches. While the S and P and Dow both managed to post solid gains today, all three major indices are sharply lower so far this year. The S and P and Nasdaq both notching their worst first quarter since 2020. Uncertainty around the impact of tariffs on the economy, weighing particularly hard on the consumer discretionary names the biggest drag in the markets this year, followed by tech and communication services. Meanwhile, defense has been the best offense with energy, health care and Staples leading the pack in 2025. But if we get clarity on trade in the coming days, could that allow markets to put in a bottom start to rally or is there more pain and volatility to come? What I heard today in terms of the conversation is there is no clearing event. April 2nd will come and go and there will not be clarity still.

[Steve Liesman]

Yeah, I agree with that and I Still think the path of least resistance is lower. I think the good news and this something that Tim said on a call today, that 5,500 level, the S and P, which is where we traded down to on March 13 and bounced from, which is where we traded down to today and bounced from, that seems to be, at least in the short term, sort of this administration's short term put on the downside. We'll see if that holds. So today's bounce, I guess in terms of that level, in terms of quarter end, I guess it made sense, but I don't think you're going to get the clarity that the market needs in order to sort of grind higher again. I think it's going to stall out pretty quickly.

[Julian Emanuel]

I agree with that. I mean, I've looked last night at the futures. I saw down 50 handles and like, all right, well, this is not going to be great. But you know, that Friday close was so Friday was just an awful day. So that wasn't surprising. Where we ended up was actually a little bit surprising to me for the reasons you said you said. I don't think there's any clarity that's going to come out of that. I think that it will just be the beginning of more uncertainty. Right. The tit for tat. We don't know where it'll end up. That's the part that sort of confuses me. Even if one accepts tariffs, let's just say we think, okay, we understand why we want to do that. I'm not sure how the methodology is helpful to business confidence. It's. It seems to be very damaging. Right. So I don't, I don't really get that. Which makes me think that the policies could change. Right. Where it's not a lot of time before, before we get there. You'd think that they would know where it is already, but I think it could end up being influxed till the very end.

[Guy Adami]

I'll echo that. I'll just say that I think today the 2.4% off the bottom rallied at the close and that's a massive move. And some of this is quarter end. Some of this is also just sentiment. Look, sentiment this morning felt about as bad as I felt it in a while. Even though there wasn't this clearing event, there wasn't really an event. And I think that's something to be said. I think it does set up for another one of these rallies. The problem often that we've had when we've had these periods of market downdraft is that earnings seasons come along and you've been able to focus on fundamentals. But we know this is going to be an earnings season where I actually think the numbers are going to be better than people are probably pricing in. But there's going to be zero about the guide that's going to be helpful. There's going to be a C suite, almost every sector pointing out the uncertainty that we're talking about relative to their daily life. So I think, you know, that's part of where we go. I would get back to today's tape where the stuff that's defensive, whether that's an Altria, whether that's an AT&T, those had huge days. But you also, it was, it was strange defense one but also those oversold stocks won and I think you could see some stocks back in the soup tomorrow.

[Kavita Patel]

Yeah, and there's defense that's coming back into the mix to look at. Wal mart closed up 3% today. I thought Apple was really interesting because again, if you go back to the playbook from 2018, Apple iPhones got an exclusion from some of these. And when I think about this, the sort of clarity that we might get over the next couple of weeks or so is like what products, what companies are going to be carved out of some of these sorts of tariffs as we think about the ones, at least with our allies, which are our biggest trading partners, Canada, Mexico maybe they're kind of dropping a little bit by the wayside. And you know, listen, I think the guide, like you said, is really important and we can just go back a few weeks to the end of earnings season. What did we hear from Wal Mart? What did we hear from Costco? So we heard about a consumer that they can't exactly put their finger on. Well then you'd say to me, all right, well why was Wal Mart today? What do you say, Guy? What are they? What's their little logo that everyday low prices, every day low prices. So we've been talking about this trade down for like two years or so. So again there's going to be pockets of opportunities. Maybe it's sectors. Did you see like pharma today? XLV had a nice rally back, that sort of thing. So you know, like as a silver lining guy on the desk, I just think there's opportunities here when we get down 10% or so that you know, on an individual basis or on a.

[Julian Emanuel]

Second additional 10% from here.

[Kavita Patel]

I don't know. No, I mean we're down percent. I do think it's interesting that, you know, we're still looking at S and P, that's down a little less than 5% of the year. The NASDAQ's down about 10 and a half percent or so. Not a disaster.

[Guy Adami]

Can I ask silver lining a question? You're in charge. Okay, so. So Nvidia's trading around 22 times forward and even before we knew about their exposure. Really, this was a stock that generally traded at 40 times. At 22 times, you're pretty buffered. In other words, this isn't a stock that's necessarily priced to have the kind of growth that it's had. Do you think that that's interesting and it's not rhetorical, it's true.

[Kavita Patel]

Well, I'll just say this. We've been talking about this for a year and maybe a bit early. We're talking about the overbuild, the overcapacity, the double ordering because of export bans. It goes on and on. Now all I do is read stories and very reputable, you know, kind of print stuff, I guess digital. Now they're just talking about this overcapacity bill. They're talking about pricing coming down dramatically for the compute. There's going to be pricing pressure not because there's competition for Nvidia, because there's not the demand. Right. And there was this overbuild and this over demand like you know, the last six months that's here, that's happening. That's why that stock is trading at 22 times. That's why Broadcom, which was really late to the party late last year after they gave this guidance for custom silicon, Remember this? In mid December, the stock moves down 38. That's how it made it into Karen's fateful eight because it got over that trillion dollar market. I didn't know she had her own. It's been down about 35%. It's barely seen an uptick in the last few weeks since it's reported. So that trade is done. The fever is broken. The hyperscalers, I don't think they come back anytime soon. So you guys better find some new leadership. I mean, you know, to kind of take this thing back towards those prior highs.

[Melissa Lee]

Okay, so you're back to being the.

[Kavita Patel]

Silver lining world silver lining.

[Melissa Lee]

Everything's in its place now. But Dan, as a silver lining, Scott, you did bring up a good point in terms of like peak pessimism about tariffs being priced into the market. So over the next couple of weeks with carve outs, exemptions, etc. The upside, there could be upside there that we are not anticipating in terms of the tariff situation, there could be upside.

[Julian Emanuel]

But one thing that tells me there is still pain to go is the VIT vix. The VIX will not stay around here. Right. We're going to see it higher before we see it lower. And so this is sort of no man's land. And I don't think it just drifts down. I think we start to.

[Steve Liesman]

I'm with Karen on that. But if you think the only reason the market sold off is because of tariffs and you think there's potential for them to acquiesce in some way and do something that's going to calm the markets and. Yes, but I think tariffs is just part of the reason the market's going lower. There are other things that they have no control of, not least of which a slowing economy, which, you know, maybe they're sort of helping that along. But it's clearly been in place for a long, a lot of time before this, I believe.

[Guy Adami]

I think, I don't think we've seen the kind of labor weakness that would warrant real concern about recession yet. I think there's some dynamics with the services part of the economy that have been very mixed. But I'm going to agree with that. I'm going to say I look at airlines and I look at, I look at some of the discretionary spend. These are trades that were under pressure on a combination of cyclicality in their core business also in pent up demand that was more than, than met, more than satiate. And we've seen this. And you can't tell me that the move lower in some of these discretionary names. We talk about them all the time, so I won't mention the names. You know them. It's not about tariffs. It wasn't about tariffs. I do think there's a part of this marketplace that was weak and vulnerable.

[Melissa Lee]

All right. Meanwhile, our Steve Liesman sat down with Richmond Fed President Tom Barkin this afternoon. He joins us now with all the headlines and all the clarity that a Fed president gives these days wish.

[Tim Seymour]

Unfortunately, Tom Barkin mostly emphasizing the uncertainty over policy making given the uncertainty over fiscal policy, which y'all are just talking about. But he also suggests it's perhaps not wise for markets to be certain about rate cuts this year.

[Steve Liesman]

To cut rates, you'd have to get confidence on inflation. You have to get confidence that inflation is settling. You could get that confidence because it actually continues to settle. You could get that confidence because the economy is in such tough shape that you feel that whatever downturn you have will also Settle inflation.

[Tim Seymour]

Okay, y'all can put these numbers in your pipe and trade them. The CNBC rapid update averaging the outlook for 14 Wall street economists. These inflation remaining stuck near 3% for most of this year, which would I think make it tough for the Fed to cut. Rapid update also showed expected growth just 0.3% this quarter before rising gradually to 2% by year end. Bark and said he would be watching carefully the desire of importers to pass along the tariffs, keep their margins high, and the unwillingness of consumers to pay more. Guys, we're not even at the right point of uncertainty here. The point of uncertainty that we sort of look for is not what the policy is going to be, but it's the effects of the policy. So we can't even get to that place where we could debate what are the tariffs going to be and then what's the inflationary impact? You guys all have to do margin calculations, right? Who's going to kick the hit on the margin? Who's going to pass along? Who has pricing power, who doesn't? Those are the things that's going to make Tim right or wrong about the.

[Melissa Lee]

Earnings numbers and the things that are not model A bull, the impact on the consumer. I mean, you can put in various tariff rates on various companies and try and churn that out, but you can't do that for the consumer necessarily in terms of the hit to their psychology and their hit to their intended spending.

[Tim Seymour]

Tom Barkin has actually been, I think, one of the smartest guys on the Fed about this issue because he comes out enough from an economic theory point of view, but really a business point of view. And it's about the kind of culture of raising prices. He points out. The last time we did this in 2018, they would laugh at you if you said, here's higher prices. Now post the pandemic when there was this round of raising prices. You know, it's a different situation where the psychology is out there. The business will try to get it those prices along. Now you also have the situation where several years on, consumers are sick and tired of these higher prices. So he called it the kind of immovable object meeting, the unstoppable force. You know, so that's kind of where we're at. And nobody knows how all this shakes out.

[Melissa Lee]

How does he view the employment picture as it relates to whatever's going on in the economy in general, but tariffs specifically?

[Tim Seymour]

I can do a little Socratic reasoning with you guys at the table here.

[Melissa Lee]

All right, go for it.

[Tim Seymour]

If you're a company and you can't pass along your tariff increases and you're cutting into your margin. What are you doing?

[Steve Liesman]

Firing people?

[Tim Seymour]

There you go.

[Guy Adami]

Nice job.

[Tim Seymour]

That's exactly.

[Steve Liesman]

I know that's.

[Tim Seymour]

So that's exactly what Barkin said is gonna happen. You cut the margin, you're going to find if you're able to pass them along, then you have. Okay. The other side of that, which is a worrisome side of it, is you have people asking for higher wages. You could have a wage price spiral or all of this could work out just fine. I'm waiting for somebody to send me the report that says, steve, everything's going to work out just fine.

[Julian Emanuel]

Let me just throw one maybe silver lining in there.

[Tim Seymour]

I'll take one.

[Julian Emanuel]

Productivity increases.

[Tim Seymour]

Okay, so we have experienced a pretty nice run of productivity over the past several years. I think it results from the pandemic and. Right. Sizing people, getting into the best possible job. I think work from home was a piece of it. We could argue about that. But the trouble you have is that tariffs, what's the right word? I'm going to make one up here. De optimize the supply chain. And most people who try to figure out the impact on this, they say it's a productivity killer. Now, you still have AI, you still have all this other stuff that's going to stop that. I don't think AI is even in the productivity numbers at all yet. I think we're still getting pandemic business process productivity if nothing else. But when you have to look, what's Mary Barra doing right now? Is she thinking about the next car? Is she thinking about how to, you know, make GM more profitable? Or is she trying to figure out where my seatbelts are coming from and how much I'm going to pay for them? So I think there's a de optimization. Can I use that word?

[Kavita Patel]

You did.

[Guy Adami]

I would have sub optimized maybe.

[Tim Seymour]

Sub optimized.

[Kavita Patel]

Sub optimized.

[Guy Adami]

Sub optimized means less optimized optimization. De optimized means you're going in the other direction.

[Tim Seymour]

I think you are going in the other direction.

[Melissa Lee]

Yeah. Do you think the Fed is trying to manage the message at this point? When we were both on squawk box a couple of weeks ago with Austan Goolsbee.

[Tim Seymour]

Yeah.

[Melissa Lee]

He mentioned the S word, stagflation word. We didn't bring it up in that conversation, but it feels like they're moving. I'm not saying that they're embracing that scenario at all, but they're sort of Acknowledging that that is a scenario on the table.

[Tim Seymour]

There's no doubt you look at. In fact, I was just having a conversation. I think the Fed's forecast today would be different from the one when they just came out with. Yeah, we know a little bit more about the extent of the tariffs. We've had a lot more research done on this. Somebody did one that said 150 years of tariffs show in show show unavoidably or incontrovertibly that it reduces growth. So I think they would have a more stagflationary forecast. Now. I think the Fed has been more open about talking about this than they were before. I still think they prefer that none of this was happening.

[Guy Adami]

Ex Fed members are saying it. I mean, Robert Kaplan, Kaplan was on Friday. He's not afraid.

[Tim Seymour]

Look at stock Muslim from the Kansas City, you know, New Kansas City. He's saying, sorry, St. Louis, he's, he's going to have a, an incident here. But the St. Louis Fed, he said, look, if this thing comes out a certain way, we could be hiking rates. He's the one guy who said it. I'll bet it's on some other people's minds.

[Kavita Patel]

Yeah. I want to make one point. You just talked about the car stuff. What do they have to do? You have to fire people. There was an article in the Wall Street Journal. I don't know if you guys saw it today in the A section. It was about Harley Davidson. They're in Milwaukee. Okay. So in 2018, the EU put a 25% tariff on their bikes.

[Tim Seymour]

Okay.

[Kavita Patel]

They ate $166 million to keep the pricing down of their bikes. What did they do though? They moved some production to Thailand. So if you're talking about these tariffs as a dead bang winner to bring manufacturing back here, it just doesn't work that way. This is a great American company that actually doesn't buy into what the President's selling.

[Tim Seymour]

Do you know, I can tell you that there are CEOs right now who thought they were doing the right and patriotic thing and move their production from China to Vietnam to Thailand to other places that are about to get slapped with tariffs. It's not a good thing.

[Melissa Lee]

Steve, thank you.

[Tim Seymour]

Pleasure.

[Melissa Lee]

Nice to see you in person. Steve Liesman. Meantime, Evercore ISI sees market uncertainty peaking around the Wednesday tariff deadline. Julian Emanuel is the firm senior managing director. You heard the conversation, Julian. But we're going to still be in a bull market. The trend is still going to be a bull market trend where pullback we.

[Unknown]

See that's our view. So a couple of things to think about. We've all seen that chart of trade policy uncertainty literally to highs that were unimaginable, certainly even when you think about the 2018, 2019 trade war. But I would suggest that, and Tim hit this earlier, the mood this morning and over the weekend talking with clients and talking with colleagues was as negative as I can remember going back to when Silicon Valley bank blew up and we didn't know the Fed was going to, quote, unquote, take care of business. And so from that perspective, we don't think you need a material clarity. We just think that you need, and we're likely to see just at the edges, the very, very extreme scenarios becoming less possible. That is, we get some sort of view that there's going to be negotiation. And that to us, combined with, you know, we don't see a recession here. Our view is for 1.7% growth this year and the market can deal with inflation in the high twos, 3% to break point, 3% to us. If it's going to be over that, you know, the S word stagflation is certainly becomes a possibility, but we would argue that the market's already pricing it.

[Steve Liesman]

So how important is this jobs number on Friday? Because that's the final piece, potentially the stagflation equation.

[Unknown]

It's really important, not just from what the number is. And you know, in the parlance of Wall street, what's interesting is the Whisper number is 100 and the official number is 140. So there's wiggle room there. A five digit number is likely going to be problematic. It's also how the administration between now and Friday spins all of this. You know, if it is something where we are committed to, you know, reconstructing the US Economy, we understand there's pain. We know there's going to be more pain. That's not going to be the message that the market's going to want to hear, almost regardless of what the number is. But as I said, I think there's likely to be nuance in the message.

[Julian Emanuel]

So where do you think the Fed comes out on, you know, the dual mandate? If we start to see unemployment really pick up and we start to see inflation, do they do nothing? What do they do?

[Unknown]

So it's our view that Jay Powell is likely to be replaced next year. I think that's kind of obvious to most observers and that when he thinks about his historical legacy, he rescued us from the pandemic by doing a lot and then he raised rates and didn't destroy the economy in the doing that. And you put it all together, his legacy is tied up in keeping the soft landing going and passing it on to whoever is the next person. So from that perspective, we really don't see a world where the Fed is going to hike. And if you think about how the market has responded the last couple years, if they don't cut, it'll be a function of the fact that the economy is judged as being okay enough to.

[Melissa Lee]

Do so just quickly. You do recommend to clients to accumulate stocks right now. So which sectors have priced in peak uncertainty and which have not? I mean, we were talking about defensive sectors like a Wal Mart. That's not pricing in. Well, I guess it is pricing in uncertainty in terms of multiple expansion. But how about the others?

[Unknown]

So, so what's interesting about today is that everyone basically moved their sectors in the direction of how the entire quarter. So you saw, you know, consumer staples outperform, you saw health care very strong. In our view, those are probably the places where defense has been hiding where again, all you need is a little less uncertainty. We think you go back to the prior bull market winners in general technology, communication services, discretionary.

[Melissa Lee]

Julian, thank you. Good to see you. Julian Emanuel, Evercore ISI that's your fateful eight, Dan.

[Kavita Patel]

Yeah, I mean, listen, it was my view, I don't know if you guys remember this, I kept on saying Qs and twos. This is back in 2022 when people would ask, what do you buy? People didn't think that the prior leadership was going to do the latest leadership. My view was like, you got to take them on the way out. They're the only ones who can actually really drive it. And then the twos was like two years, right? So if the Fed was going to lower interest rates eventually after raising, that's probably still the case. And that's the only way, in my opinion, you get back to prior highs if you do have the fateful eight participating. Because none of those other sectors, it's not financials, it's not energy, it's not a whole host of other things that even comb can do that, you know. And I just want to make one point listening to Julian and Steve, and they all make a lot of great points. Go back to 2018, the Fed was raising interest rates, right? And then all of a sudden we had this trade war kick in. And then all of a sudden we did have a global growth scare. The S&P 500 sold off 20% in Q4 of that year. And what did the Fed do they had to lower interest rates and we got all that back in 2019. But I guess the question you have to ask yourself is if the Fed were starting to raise rates or lower rates, excuse me, under the same exact circumstances that exist, I don't think it does the thing that a lot of folks think it's going to do for the economy and thus the markets, like it did in 2019.

[Guy Adami]

If you look at everything from Staples to even XLV or health care, those charts, those relative underperformance charts to the S and P look a lot even like those international mega stocks. I mean, in other words, you had multiple years. What are those that would be make international grading. And of course everybody knows that. But I just, I think be careful about rushing into Staples here because I think the valuations here aren't terribly interesting either.

[Julian Emanuel]

Yeah.

[Melissa Lee]

Coming up, a core we've crushed the stock tumbling well below its IPO price in its second day of trading by shares are off to a rocky start. And what it says about the trade next. And later, going for gold, the precious metal just notching its best month since August 2011. But can bullion's bull run continue? We'll debate that straight ahead. More fast Money into.

[Karen Finerman]

This is Fast Money with Melissa Lee right here on cnbc.

[Tim Seymour]

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[Karen Finerman]

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[Melissa Lee]

Welcome back to fast money. AI cloud provider Core Weave dropping more than 7% on its second day of trading. The stock going public on Friday at 40 bucks a share. DA Davidson, the first firm to start coverage of the Nvidia backed stock issuing a hold rating and a price target of 36, which is lowered from 47. CNBC's Christina Parts Nelson got more on this. It was a pretty damning note, I thought.

[J]

Yes, it was a damning note and I'll start with the most damning part of it. Calling Nvidia Are Saying that Corby is being used as a special purpose vehicle for Nvidia. So what that means is literally just off the books. Nvidia doesn't have to do take any of the risk with building out the data center infrastructure. They said also that OpenAI has a similar structure and the reason they're saying that is because both OpenAI and Nvidia invested in Corey for a percentage. So they're now Nvidia is about 5%, OpenAI is about 1.6% stakeholder and then they also become customers. So it's really a circular relationship. And so that's probably the most damning part of that report. And then just other ones is the depreciation of data centers really removed from COGS. So that inflated the gross margins up to 74% when really it should be much lower, you know, 25%. That's what they're representing. And then the debt level, $12 billion of debt with high interest at 10 to 12% free cash flow, negative burn through. So those are a lot of negatives. There are some other reports, some that were a little bit more positive saying it's really hard to put out this infrastructure and maintain it. And Core is a first mover in that sense and they have contracts, multi year contracts with some big names who have done due diligence. But those other five factors I mentioned are a major concern.

[Melissa Lee]

Yeah, I mean the, what they're talking about is the accounting part is really an issue. I mean taking depreciation out of cost of goods sold to inflate the margins, I mean that's.

[Julian Emanuel]

Well depreciation isn't in the cost of goods sold. It would, it shouldn't be in the cost of goods sold. Right. So, so you can sort of, you can do that. And then what happens is let's say three years down the road you've got to, you've got to sell all those or you just need to mark them to market. You're going to have a big non cash charge but in the prior three years the gross margin will have been whatever it will have been. So depreciation.

[Kavita Patel]

The bigger issue though is the depreciation at six years is way too long because these are all hopper chips and they're still waiting for Blackwell and then Rubin's coming. But all the hyperscalers are going to have to just that down. Amazon has already done that. Chris has been like reporting on that. It's just, it's just math and it's just.

[Guy Adami]

Would we be asking these questions? I mean I'm just going to assume that there's nothing wrong with the accounting because the companies we're talking about. But would we be asking these questions in the hypotheticals if there wasn't concern about AI compute capacity being built out to nowhere? In other words, this is, this is about building it before they get here. And so yeah, it seems like it's a good idea. But when there's debt component to it and you're just building capacity when we don't know what demand actually is, isn't that really the problem?

[J]

Yeah, that is. And they would be one of the first ones to fail. But to your point, Dan, you brought up just coreweave, the infrastructure buildout that is concerning. The CEO over here talked about depreciation. He stopped me and he almost got angry that we keep bringing it up. And he said, no, there's other purposes for these GPU clusters and it may not be as popular two years from now, but they're not going to be completely useless down the line. So he tried to, I guess, correct me in my reporting for that. The other thing is, why aren't we questioning then every single other hyperscaler that is building out infrastructure and spending millions and billions of dollars at the same clip as coreweave for their products to become obsolete in just a few years to know? So isn't it the same argument that could be applied to all of them?

[Kavita Patel]

Yeah, but it's going to. I just think it's going to be more important workloads, inference that's going to be done by the major hyperscalers and I think they're offloading some of their other workloads. And then when you hear the major Amazon, Microsoft and Google talk about it, they're going to be upgrading to Blackwell and Rubin because, you know, and Jensen just told us this at GTC two weeks ago, it's going to be 100x compute. You can't do that on Hopper. You need the next generation to get the speed, performance upgrades and the like here. So to me it's just they're telling a story that just doesn't match up particularly well. And you look at a company like this with a $17 billion market cap and they have $12 billion in debt and their service on that debt is $1 billion. And they just raised a billion and a half dollars in cash and they did $2 billion in revenue last year and it's expected to be 4 billion to 8 billion. That's the debt.

[Guy Adami]

I think the debt's the issue and the reliability on really Your parent or your, I'm not going to say insider, it's a naughty word, I guess, but the person, that's really the reason for your being. And that to me, if you didn't have the debt issue, I think people.

[Kavita Patel]

Could live with it. Here's some other math. Okay, so Nvidia has now invested what, $350 million in this company. They have bought 250,000 Hopper GPUs, probably at an average price of $35,000 or something. This is a great trade for Nvidia, right. If you think about it, they're one of Nvidia's biggest customers at like 7 or 8% or something. So it's, you know, what did the analysts say? A special purpose vehicle, something like that. There's some goofy stuff going on here. It's that simple.

[Melissa Lee]

Wow.

[Julian Emanuel]

Wow.

[Kavita Patel]

Everyone's like, what?

[Melissa Lee]

No, I mean this whole issue, I mean to your point about the hyperscalers building out, they're not. Their whole business doesn't revolve around leasing those data centers. Right. Their business model is something else that use a data center in order to create a product that they can then use either for, I mean. Right, right, right. And sell the product.

[Julian Emanuel]

Right, right. But then, so the balance sheet of the hyperscalers is, you know, vast. Extraordinary.

[J]

Yes. Right.

[Julian Emanuel]

So I'm wondering, I don't know the answer to this. Do, do some of these, this debt comes from obligations that they've agreed to build out data centers.

[J]

Correct. So OpenAI, for example, that $12 billion deal they still have to build out now.

[Julian Emanuel]

Right. So as they go along and meet these milestones, they pay off the debt.

[J]

Correct.

[Julian Emanuel]

So are they doing any spec building? Because if they have these, Microsoft and OpenAI, whoever else contracts IBM. Right. Then okay, so those should be money, good contracts if they fulfill their obligations. But are they going out and building spec ones? I didn't get that sent. I don't know.

[Melissa Lee]

Without a committed customer.

[Julian Emanuel]

Yes, that's what I mean. Oh.

[J]

Because you saw the question mark on my face. I was like, what do you mean by that? No, I don't think so. I think it really has to be contingent on. They only build out once they receive a contract. So then if the contracts stop coming, then where does the build out go from there? And one last point though. You bring up hyperscalers and all that and their focus on infrastructure is different. Well, Nvidia, then, it's not a hyperscaler. But what's stopping them from entering that space and becoming a competitor? So right now they're an investor, a supplier and a customer. And eventually they could be a competitor as well.

[Kavita Patel]

Right.

[J]

Because they have the DGX cloud. They have all the infrastructure.

[Melissa Lee]

Well, then it makes you wonder why they have Core Weave. Why do they want to offload it?

[J]

Let them test it out first. Right. Let them figure it out and then maybe go from there.

[Melissa Lee]

All right, Christina, thanks. Christine of arts and novelist.

[Steve Liesman]

I just know Sandy just said we got to go.

[Melissa Lee]

Oh, yeah, we do.

[Steve Liesman]

But real quick, the optics around, listen, just in terms of the broader market, market, the optics were not good. Dan mentioned it insider selling ahead of the IPO was not a good look. Taking it down from what I think 39 million shares or 40 million shares to 27 and a half million shares or something, that was not a good look. Reducing the price, closing at the IPO price, not a good look. And at 11am when the CEO said on one of the networks that if but for, you know, but for Nvidia, we weren't going to get this thing priced, that's not a good. None of this optics around it were good, which I think is not good for the broader market.

[Melissa Lee]

Yeah, a lot more fast ready to come. Here's what's coming up next.

[Karen Finerman]

A worrying prospect for pharma stocks, why the FDA's top vaccine doc is leaving the agency and the ripple effects it could have throughout the health care sector. Plus, all that glitters is gold, the precious metal at all time highs and taking miners along for the ride. How to play the surge next. You're watching Fast MONEY live from the NASDAQ market site in Times Square. We're back right after this. Check out the all new CNBC sport podcast where sports, business and investing collide from media deals to team valuations, private equity moves and more. Catch the biggest business stories on the CNBC Sport podcast. Listen on your favorite platform.

[Melissa Lee]

Welcome back to FAST money. Stocks rebounding from their worst levels to finish mix with markets still jittery ahead of tariff announcements expected this week. The dow gaining over 400 points, the S and P rising half a percent while the NASDAQ fell about a tenth of a percent for its fourth straight down day, it had been down more than 2.7% at its lows. Gold meantime, continuing its climb, settling at a fresh all time high. The precious metal closing out its best quarter since 1986. Meanwhile, Newsmax making a splash on its first trading day. Shares the conservative news outlet soaring more than 700%, triggering a number of trading halter volatility during the session and PVH on the move after hours shares surging on a top and bottom line. Beat that. Conference call set for tomorrow before the market open. Guy, got to go to you on gold here.

[Steve Liesman]

Well, go to Tim, too, because the story continues to work seemingly in every environment that we can come up with. Gold is going moving to the upside and the sell offs, which you a few of it becomes shorter and shorter in duration and there's a need for gold. By the way, I saw a headline earlier today that the Bundesbank Germany is actually concerned about some of the gold they still have left here in the United States. So the repatriation of gold is going to be the next story, I think the next catalyst to the upside.

[Melissa Lee]

Coming up, a shot across the bow at the FDA as the agency's top vaccine doctor resigns. We'll take a look at the potential impact on biopharma stocks, what it can mean for public health and the future of drug development straight ahead. Welcome Back to Fast Money. The biotech ETF XBI dropping as much as 6% today after the abrupt resignation of the FDA's top vaccine official. Peter Marks stepped down on Friday in protest of HHS Secretary RFK Jr. S skepticism of vaccines. Among the biggest losers today, Biontech Novavax Moderna, which hit their lowest levels in over five years. For more NBC News and MSNBC medical contributor Dr. Kavita Patel joins us now. She was also the former White House policy director under the Obama administration. Dr. Patel, always great to have you with us. The obvious candidates of vaccine makers have had a rollercoaster ride since RFK's name was thrown into the ring. But Dr. Marks also oversaw gene therapies and rare diseases. How do you see this impacting sort of the pipeline that's already at the FDA and also the drug discovery process in these areas?

[Dan Nathan]

Yeah, Melissa, it's concerning. Look, Peter Marks himself had really kind of overruled other FDA advisors with Serapis Duchenne muscular dystrophy drug. So this is an example where I think the leader, Peter Marks, set an example of where we needed to kind of evolve with some of these more novel therapies, namely cell and gene therapies. This is also a small staff. This is a center that has 1300 staff inside of a Food and Drug Administration. And these are highly specialized. So you can imagine it's not just Peter. There are other kind of resignations and other people who, because of Peter's departure, also do not see a good future for themselves at the agency. And they're trying to get out as well, you can imagine that that brain drain in the immediacy is not going to result in anything. There are already kind of drugs in the pipeline for accelerated approvals for follow ons. However, if you're coming in and you're Cavalletto or somebody with some novel therapies, then this is very concerning. And I'm more concerned, Melissa, that even beyond a Trump administration, we know it's a one term admin so far beyond this, it's going to be hard for the agency to repair this.

[Melissa Lee]

There are also other ripple effects out there in terms of the impact of RFK Jr. When it comes to funding withdrawal. For instance, we're reading in publications like the Hill about, you know, universities elsewhere in the, you know, in the world courting scientists in the US who are seeking scientific asylum. Basically the freedom to research scientific issues, medical issues, without concern for retribution or pulling of funding. This can mean generations of scientists lost here in the United States.

[Dan Nathan]

Yeah, I've got a postdoc, I teach a class at Stanford. I've got a postdoc. You just had a robust conversation about AI, the future of AI and kind of where that technology is going. There's no better use case for where I could have promise than in drug discovery and some of the things that are happening. I have several postdocs who have had exactly these offers from some countries, China, India, other countries have actively been reached out to and said, do you want a more stable environment? Do you want to have security after you finish your doctoral training? And it's really hard to kind of argue with that. And so this isn't just something in theory. We're seeing this playing out every day. And you probably just saw the recent headline in the Wall Street Journal about Harvard University potentially being a target. So this is going to have, I think, I think even I worry even more, Melissa, about that situation with the kind of uncertainty of funding as well as kind of uncertain immigration status and the ability to kind of hold jobs in the United States for what I think we've been doing very well for decades now, which is biotechnology and kind of innovation writ large.

[Steve Liesman]

How potentially problematic is this for people that want to get into the field? I guess my question is how many years can this set back the industry? If you were to guess.

[Dan Nathan]

Yeah, well, I don't have to guess too much, unfortunately. I worked in the early part of the century, in the 2000s, I worked on a lot of these FDA reforms because we saw so many setbacks from problematic FDA staffing problems with NIH grant dollars in the 80s and 90s, a lot of that was really budgetary, so it wasn't what we're seeing today. But it took us the early part of the 2000s up to the kind of Cures act, even through the first Trump administration. Took us a good 20 years to really right the ship to give the FDA, the NIH, a lot of these agencies the resources they need because it comes down to dollars and it's a zero sum game. If you're going to put dollars somewhere, you got to get it from somewhere else. So it did take us several decades to put in user fees, to put in device fees, to do in a lot of this innovation. I worry it's going to take us just as much time and I don't think legislators understand that. I think we've all seen the power of a good fda, when we can get accelerated approvals, cancer therapies that are coming at what seems like a clip. But we haven't, we don't remember what probably several of us on this panel remember several decades ago about how long it took to get some of these novel therapies in the United States. But I worry that's what we're going to get to and we'll probably see that disruption over the next three to five years.

[Guy Adami]

Dr. P. It's Tim. So that's what I wanted to get to. How quickly can, you know, talk about the process for funding and cutting of funding and at least help take the other side of the argument. Why this is happening is, is this ideological, is this, is this fiscal? Help us understand how and why this is at least a movement that's happening.

[Dan Nathan]

Yeah, I'll start there. I think that there is truth, like all things in Tim, like the movement to, you know, why should 80, 80 cents on an NIH dollar pay for buildings and overhead? Why shouldn't it be applied directly to the kind of research that we intended for that grant to fund? I think that's where some of that kernel starts and that is certainly true through indirect costs, by the way, there's actually a complex formula for this. So it's not as if universities are trying to cheat the nih. But that's basis number one. I think the second basis to your point around the ideology is this abrupt cancellation. The NIH has, has really kind of put out there in a spreadsheet, publicly available, a very clear kind of listing of cancellations that are kind of, quote, not in line with the priority of this administration. Not just vaccines, but a lot of other issues related to research around sexual activity, other diseases, communicable diseases, those kinds of changes and wholehearted wholesale eliminations that is really gonna set back the research community because that's what we've been doing for decades, is putting forward advances in these areas, an advance in hiv, advances cancer, an advance in Covid vaccines, advances cancer. So these are not just kind of in isolation. So I don't think we'll see an immediate effect. You've got an FDA that's working and they've got things in the pipeline and the private sector is kind of pairing with that. But three to five years from now that will, that will be hard to match.

[Melissa Lee]

Dr. Patel, always great to see you. Thank you.

[Dan Nathan]

Thanks.

[Melissa Lee]

Kavita Patel. Coming up, a search slip up for Google. One analyst sounding the alarm on the company's competitive edge. And AI Search will bring you the details on that call next. More Fast Money right after this. Welcome back to Fast money. Melius Research downgrading Alphabet to a hole. Today the analyst Ben Wright says airing out concerns over the tech giant search business, saying Google's flagship search engine is at risk of going the way of Kodak. Google has lagged the broader market this year, down almost 18% in 2025. Basically said, is Google losing the word? There's probably a whole generation out there not googling their chat GPT. And, and so ChatGPT may be winning.

[Kavita Patel]

Yeah, just not yet. I mean, like we've been talking about this. We had the perplexity CEO on, I want to say beginning of the year. And I remember at the point in time this is like people are one of these things. You know, they've been hearing about this sort of stuff. So they're still Googling for the most part. The problem that I think with Google has right now is that their models, their ability to integrate Gemini across their suite of services is just not done well. And their products are not kind of matching up particularly well against OpenAI and some of these other models out there. So this is not a thing right here and now. But it will be if they don't catch up to it. You know, is a company that's seven properties that have over a billion, like four or five have over a couple billion. If they get this right, they're going to cannibalize that search business. But they're going to be well positioned going forward. It's just the jury's still out where they're going to get it right now, right?

[Julian Emanuel]

Yeah, well, the jury's still out and, and we also have the settlement, whatever that may be. I think he addresses it in that piece saying he doesn't think that'll be a major change. Still has a hold on it, I believe. Right. I mean, it's an extraordinary property. It's not expensive by any measure, but I do feel like the rollout was bad going back a year and change ago. And I do feel like I would like a more of a sense of urgency than they seem to have.

[Steve Liesman]

You know, Ben's been on the show. He obviously thought that he just throw out Eastman Kodak. I mean, he thought about that covered.

[Melissa Lee]

Eastman Kodak back in the day and.

[Steve Liesman]

The obsolescence and how quickly it became obsolete. I mean, that was a thing back in the day. Now again, I think there's a long way to go. But for him to put that out there at this point in time, I think if nothing else, it's worth putting that little bookmark on. On.

[Guy Adami]

Well, and of all the stocks that have sold off, really in the Mag 7 outside of semiconductors, 28% in 51 days. I mean, it's been shocking.

[Melissa Lee]

Coming up, the lowdown on Live Nation where the Trump administration is taking aim at ticket pricing. What it all means ahead of a rival company's ipo. You're watching Fast Money live in the NASDAQ marketsite back right after this. Welcome back to Fast Money. Shares of ticket master parent Live Nation dropping after hours after President Trump announced plans to sign an executive order targeting ticket scalping. The stock had been up during the regular session as rival StubHub revived plans to go public. We don't have a lot of details on this EO yet.

[Julian Emanuel]

No, we don't. I mean, this has been, you know, Live Nation has faced this many times. It's such a popular thing to go after.

[Guy Adami]

Right.

[Julian Emanuel]

Who won wants higher ticket prices? Nobody. But I think of all of them, Ticketmaster is the most transparent. This is unfortunate timing for StubHub, but we've seen them fight this before. And the business.

[Kavita Patel]

Yeah, but for Ticketmaster is very different than StubHub. 80% of their sales are primary. All right, so this is really here. It's a secondary Vivid StubHub. There's a few other SeatGeek. The other thing I'll just add to this. I mean, when you think about Ticketmaster, you think of their positioning. There also is this dynamic pricing on the primary that people got really pissed off, the Taylor Swift stuff, you know, so like if there's greater demand, the tickets could go up from $200 to like $900 or something like that. So I wonder if they are going to take a crack at that as it relates to Ticketmaster.

[Guy Adami]

I mean Mike Damone did want not.

[Steve Liesman]

Want to be known as when he.

[Guy Adami]

Was getting Jefferson, Earth, Wind and Fire tickets.

[Steve Liesman]

Cheap Trick as well. Trick, yeah, the genius of cheap.

[Guy Adami]

He didn't want to be known as a scalper but he was final choice.

[Melissa Lee]

Trades final trade time.

[Guy Adami]

Tim 5 year highs in Altria MO. I think it goes higher.

[Julian Emanuel]

Karen yes, well I'm always long but I do have some hedges on like short hyg then.

[Kavita Patel]

Nathan yeah, the Big Pharma XLV looks okay guys.

[Steve Liesman]

One night we had a big crowd at the beginning of the show. Dr. Patel came in. A lot of movement dynamic. You know, ExxonMobil's had a nice little run. Melissa Lee I think our viewers should take a close look at xom.

[Melissa Lee]

All right, thanks for watching Fast Money. See you back here tomorrow at 5 for more fast. Mad Money with Jim Cramer starts right now.

[Dan Nathan]

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[Melissa Lee]

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[Dan Nathan]

Have been previously disseminated by them on.

[Melissa Lee]

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[Dan Nathan]

On this podcast as a specific inducement to make a particular investment or follow.

[Melissa Lee]

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[Dan Nathan]

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[Melissa Lee]

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[Dan Nathan]

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[Melissa Lee]

Should not be relied upon as such.

[Dan Nathan]

To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer Check out the.

[Karen Finerman]

All new CNBC Sport Podcast where sports business and investing collide from media deals to team valuations, private equity moves and more. Catch the biggest business stories on the CNBC Sport Podcast. Listen on your favorite platform.