← CNBC's "Fast Money"
CNBC's "Fast Money"
Markets Rattled By Tariff Latest… And If There’s More Downside Ahead 4/7/25
00:43:48
The market sell-off rolls as the major indices whipsaw to start the week. How the latest tariff headlines are swinging stocks, and what an additional 50% tariff on China will mean in the trade war. We break down the threats, reactions, and strategy for navigating the volatility. Plus, Big Short investor Steve Eisman on why now’s not the time to be a hero in the market. Fast Money Disclaimer
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- [00:00]
Melissa Lee
Say you've always wanted to take a.
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Tim Seymour
Spontaneous trip to the Caribbean. Here's the thing, if you get smart.
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Tim Seymour
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Melissa Lee
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Courtney Garcia
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- [00:51]
Melissa Lee
Live from the Nasdaq marketsite in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight, a hair trigger market. The Dow taking investors on a nearly 2,600 point ride, the S&P swinging more than 400 points and the NASDAQ moving 1500 points from low to high today. Are these wild mood swings a good or bad sign for the formation of a market? Bottom plus to the penny. The Charmainer set to join us with what the technicals have to say about where the S and P could be headed from here. And later, Apple taking it on the chin hard in this market. Sell off stock already down 18% this month. Is this an overreaction or a true sign of how bad things are in US China relations? I'm Melissa Lee, come to you live from Studio B at the nasdaq. I'm the best tonight. Tim Seymour, Courtney Garcia, Dan Nathan Adami and we start off with that roller coaster day on Wall street markets opening the day with another big loss as the Trump administration doubled down over the weekend on their tariff plans. Reports the White House was considering a pause though, sending stocks rallying into late morning with the S and P climbing as much as 3.4%. But it gave up those gains when officials called those rumors fake news. Seesawing the rest of the session to end the day basically flat. The other major indices saw similar swings with the tech heavy Nasdaq whipsawing nearly 10% from low to high. The Dow's 2600 point range today was its biggest unre record. Meanwhile, yields on the 10 year treasury spiking sharply higher, climbing back over the 4% mark, seeing their biggest basis point jump in almost three years. And the Vix, the volatility index briefly topping 60 for the first time since last August. Does the bounce off today's low suggest we've made a bottom or is there more pain to come? Are we closer to a bottom, maybe forming a bottom guy, what do you think?
- [02:27]
Dan Nathan
Well, Carter, we'll talk about the trend line. I'll talk about that prior high back in December of 2021, January of 2022, 4800 and change. Where we traded down to was a test of that prior all time high. So that is a good sign. Obviously the VIX cascading higher is maybe a good sign. Maybe we'll get some sort of capitulation. And I think yes, short term bottom is absolutely feasible. I don't think all the damage is done yet, but you got something to trade against. The valuation concerns that we had have been abated a little bit. But if you look at like a Cape ratio, so probably twice the norm, the Buffett indicator, although off its highs, is still high. So valuation wise there's still some room.
- [03:06]
Guy Adami
To the downside and to the downside, I mean it is that level this morning, 4835 or something like that, that was the all time high going back in 2021 before the market topped out. You know this takes me back a little bit to Q4, 2018. You know the stock market sold off 20% from really in Q4 from the start to the end. And you know, to change that tide there, the Fed really did have to pivot. They were raising interest rates. The Fed funds got to about two and a half percent or so and then they went really easy and the stock market ra rally pretty hard. I think we closed up more than 20 some percent or so in 2019. It's just not that easy of a fix right here. Right. And so if you think about there were growth scares back there, there's a couple other things going on. But if you're telling me that the White House is going to keep doubling down on this sort of stuff, this sort of damage done to this economy and the global economy is really going to be hard to turn around and the market's going to sniff that out a little bit. So again, not a good press here, especially when you consider how negative everybody is and the lack of good news right here, because I keep hearing this and I can't imagine this happen returns the scenario in which we are back towards those prior highs at 6100, the S&P5. But I can't envision it Right now, I can't envision it for 20, 25.
- [04:13]
Tim Seymour
Well, that's why I don't think you have to rush into anything here. I mean, I think, you know, as we're all talking about, there's some important levels the market is absolutely respecting. I mean, if you think about the level Dan's talking about, in the middle of night, those of us that were awake, I mean, it was really, it was, it was, it was almost within 2% of the 200 week moving average, which is again, a really important level to have respected and held. And then you have an intraday rally all the way up nine and almost nine and a half percent. It tells you what was going on to at least to those intraday highs, what's constructive for the market. And this is what we're all saying after this kind of a move in the, the oversold nature of the market, it's really tough to press lower in the short term. And in fact, I, I actually think I'm kind of happy that markets didn't really finish in the green. I think in terms of establishing even a legitimate trading bottom, I think the dynamic around where you want to see certain things and as we say all the time, markets stop panicking when policymakers start panicking. And the White House isn't panicking. You know, the Trump administration is saying, this is what we're doing. They're not moving off of what they said. And in fact, they've had to reaffirm throughout the day when wherever the news flow starts that there's a 90 day reprieve coming which was very clearly refuted. It's interesting for price action that, that actually the markets didn't lose it on that. In other words, you've got China retaliation. You got, no, we're not thinking about 90 days. So, you know, all in all, today was a better day than I thought we could have had at, you know, 4800 in the middle of the night. But I think it's very hard to believe that based upon the policy. The reason why people are so freaked out is it appears as if there's a structural shift in the approach to the economy. I don't think this is very different than what the Trump administration said they were going to do. But I do think restructuring the US Economy to me is something that market participants are having trouble with. And that's where you've gotten a lot of this volume.
- [06:02]
Melissa Lee
I would add though, that there's an element of trying to restructure other people's economies here because no because, you know, it's not enough for Vietnam, for instance, to say we're going to go to zero percent. It's like, no, we want the VAT to be pulled back, too. So the Trump administration is asking other countries to change their tax policy domestically in order to meet their demands. And that seems like something that you really cannot control.
- [06:26]
Courtney Garcia
Yeah. And that's where investors are really trying to wrap their minds around what is changing in the global trade order here. And that's really why they're pricing this in. But I, I do think a lot of this is pricing in the worst case scenario right now. And you said this brings you back to 2018. I would actually say a lot of this intraday trading activity is a lot like what we saw in March of 2020, where you saw these huge intraday swings. So I don't know if we're at the end of this here, but seeing the Vix above 50, seeing the investor sentiment above bearishness above 60, or it's been like that the last couple of weeks is probably a better sign that we're getting closer to a bottom here. When you look at this, historically speaking, you typically get your best days in the stock market within a month of your worst days. And seeing some of these really big swings here, kind of bearishness levels probably are going to be more of an opportunity. So are we at the end of it? I don't know. But I think you want to make sure you stay invested here, you don't panic out. And if you have cash, you probably want to start to get some of that to work.
- [07:14]
Melissa Lee
What's with the climate yields today?
- [07:15]
Dan Nathan
Makes perfect sense to me. You know, I mean, maybe I'm in the minority here. Tim probably agrees somewhat, but, you know, if there's a concern about what we're doing here in the United States and the credit quality and all those different things, I mean, the bond market is not where people are going to go. They're actually going to sort of flee the bond market. I'm surprised it didn't happen faster, but it's happening now. And, you know, I'll say again, I think rates are going to go, continue to go higher for the wrong reasons. That's sort of the next chapter in this book.
- [07:41]
Melissa Lee
Well, there's, there's the element also of the rating agencies looking at what is going on in D.C. because they have cited turmoil and chaos and the process as a reason for a downgrade. But we also touched on this last week, and that is what if at the next auction, China Or Japan or whoever else just says, you know what, we're going to, we're not going to sell, we're just not going to participate right now that can cause real concern.
- [08:02]
Tim Seymour
Look, I don't think this administration is, is not aware that we have financed our deficit to the rest of the world for a long time. Part of the trade off for that is the dollar as a reserve currency. If the agenda is also to push the dollar substantially lower, you've got structural problems. I would just speak to in terms I agree with what guy saying about the bond market for sure. I'm more concerned about credit and what we're starting to see. You saw CDX, high yield CDX, it's had a nasty three days in a row. We're at 17 month wides in terms of where spreads have gone. And that's something that hasn't really even begun to fight. So yeah, the environment where actually you're starting to see maybe yields go lower, spreads widen, stocks sell off. That's kind of the story that I think you should be most concerned about. Again though, I thought the risk markets were a little more constructive today. I thought the fact that commodities traded a little bit better, I just think you had massive positioning changes by some of the biggest houses in the street. Some of the best well known hedge funds that run very tight books, they went from net long to net short very quickly. And I think that's part of where we sit today.
- [09:07]
Guy Adami
Your point about credit is really important. And you know Boaz Weinstein at Saba Capital, really smart credit investor, he was talking about this morning on another network that that Wall street aspect getting to Main street means bankruptcies like when you start seeing credit. And so we haven't even brought up the term about unemployment right now. And then you think about what you were talking about with yields. If yields are going higher and the market is priced for five cuts, you know what I mean, the fed funds rate, that's a disaster for stocks. Like it's an outright disaster. It's probably really bad for the economy too because if that's what the administration has been targeting, the 10 year yield because they have this odd notion that if you can loosen up the housing market in the midst of a recession, that that's going to do something. I just don't see it. Now obviously if you're locked into a low mortgage, you know what I mean, there's not a whole heck of a lot you're going to do. You're not going to do a HELOC or anything like that so I just think they kind of got themselves turned around. I think they have themselves backed into a corner. And to your point about COVID that's a really bad analogy because what did the Fed do? They went to zero interest rates and then they put trillions of dollars of fiscal stimulus in and they can't do that right now. I think you have to go back to the last two recessions prior to Covid. That is the financial crisis and it's the post.com and in each instance the S and P got cut in half. And I'm not saying that's going to happen, but we could easily get down 35% or something like that because again, if the S and P earnings have not meaningfully come down so far from Q1, I think we're expecting 13% year over year growth. We go into recession, you'll be lucky to get like mid single digits.
- [10:38]
Tim Seymour
You're matching recession. And this is the conversation that we're all mentioning. And so people that are tuning in to our show who aren't necessarily watching financial news all day, you know the idea that over the weekend you were reading the press and you were seeing Besson on, on Fox, you were seeing him on, on, on Channel 4 and you're seeing the dynamics, I guess it's NBC, it's me, sorry, local New York Channel 4. Yeah, but, but the idea of recession as a policy maneuver is something that, look, I think is something that people are addressing and trying to understand if this is truly in the cards, is this truly a policy pathway. And that's something that if you think about where stocks are priced for. I just want to get back to the S and P. I mean we can, we can test, we can hold 4800, we could go down to 4500. We've got earnings season starting this week and we're not going to hear anything good. Do you really think that the earnings profile right now for the S and P anywhere, even with the downgrades were probably somewhere low to 70s high two 60s on the street in terms of the stock market's not cheap and if you're pricing for recession and that's really where the administration is also trying to point out, not a lot of people own stocks, not a lot of people really care that much about the market and Main Street? Well, it's not, but that's the messaging and that's part of where Wall Street.
- [11:51]
Guy Adami
I got to get in here for one second. So if the administration is doing recession as a policy, that's the Dumbest, you know what thing I've ever heard in my life. Because wouldn't it be a lot easier to reorient global trade and to deal with your debt and your deficits in a strong economy and strong financial supply side is so dumb. I keep hearing this.
- [12:08]
Tim Seymour
So dumb.
- [12:08]
Melissa Lee
Well, you know, the last time there were major reversals in the trade balance was great financial crisis in the 1991 recession.
- [12:14]
Guy Adami
Yeah. Have a ball.
- [12:15]
Melissa Lee
I mean, I'm not saying, I'm not advocating. I'm just saying there is a result that lines up with some of the goals that they have.
- [12:20]
Tim Seymour
Well, supply side doesn't. I mean, you can't blow out the revenue side of your balance sheet of your income statement. Excuse me, it's not your balance sheet and it doesn't really work. Having said that, I'm not, I'm actually not here to assess it. I'm trying to talk about what the market is digesting, and that's what the market digested over the weekend.
- [12:37]
Melissa Lee
All right. Well, President Trump clearly not backing down from his stance on tariffs, indicating there are once in a generation opportunity to reset global trade. Eamon Javors has the latest from the White House. Amen.
- [12:47]
Eamon Javers
Hey, Melissa. Well, in that session with reporters in the Oval Office earlier today, the president doubled down on his tariffs, doubled down on his threat to China. That was made earlier today to increase tariffs by 50% if China doesn't remove its retaliatory tariffs of 34%. But then the president also said this. Take a listen.
- [13:09]
Tim Seymour
I have a great relationship with President Xi. I hope it's going to stay that way. I have great respect for China, but they can't do this. We're just, we're going to have one shot at this and no other president is going to do this. What I'm doing. And I'll tell you what, it's an honor to do it.
- [13:27]
Eamon Javers
So asked whether or not this was about a negotiation or whether this was about permanent tariffs, the president said it's about both, really. He does want the tariffs to be in place to restructure the global economy, but he also wants to hear from other countries. We saw the Treasury Secretary, Scott Bessant, say earlier today that he is in negotiations with the Japanese. And we saw Benjamin Netanyahu there in the Oval Office with the president saying that Israel is committed to lowering its trade deficit with the United States to zero. Didn't put exactly a timeline on that, but said he's serious about that and said Israel is going to do it. That might be just A couple of billion dollars of purchases of American products. But it gives you a sense of what this White House is looking for from foreign countries around the world in terms of negotiation. Melissa, back over to you.
- [14:13]
Melissa Lee
Amen. Though it seems like I don't want to get into that formula from last week because there was a lot of debate about that. But right now it seems that the target seems to be moving constantly because the administration is demanding also VAT taxes or vat, I should say, to be removed, which is something different.
- [14:32]
Eamon Javers
Yeah, look, I mean, right. And you saw Peter Navarro say that on CNBC earlier this morning, which is like that. Even if Vietnam, for example, were to approach the United States and say we'll lower our tariffs to zero, Navarro says that's not good enough because you have to also take away all these additional, what they call non tariff barriers. They see a vat, that tax as a non tariff barrier. They see currency manipulation, they see product dumping. They see all sorts of things as non tariff barriers. They want all of that removed as well to the betterment of the US Position and trade. So countries are going to have to go much farther than just going to zero in order to achieve what the White House says they're asking for here. Whether that's realistic politically or economically for those countries, you know, we'll find out. But the White House is setting a very high bar for what it wants in any negotiations. They feel like they've got the cards here in this negotiation and they're pressing their advantage. And you saw the President just there saying he feels this is a once in a generation opportunity to reset this. And he's a unique figure in American politics to be able to do it.
- [15:37]
Melissa Lee
Sometimes you got to take your medicine, as the President has said. Eamon, thank you. Eamon Javers, an investor known for the big short, says it's all about politics right now. Steve Eisman is former senior portfolio manager at Neuberger Berman. He just launched the Eisman Playbook podcast, which has dropped. It's a good listen, Steve. I listened to your first episode. What do you make of this market here? You're saying, don't be a hero.
- [16:00]
Steve Eisman
What I make of it is that I think part of the problem. I've been watching your show, everybody else's show, and people are getting on the show that are almost in hysterics. And I think the issue is that everybody of our social class took econ 101 and we were all taught the same thing, trade good, tariffs bad, trade war terrible. And that was drummed into everybody's head. So with such force that it's a paradigm that now you have a president of the United States who doesn't seem to accept that paradigm, and people find that extremely jarring. You know, so what I try and do in situations like this is try and step in the shoes of the other person, see the world through their eyes, and try not just to understand what they think, but why they think it. And I think what's going on here is you have to go back to the 90s when Clinton was pushing NAFTA and China entering the WTO, and he basically made two that free trade would improve GDP growth and would create a lot of jobs. And he was right on the former, and he was dead wrong on the latter. And, you know, if you travel this country, there are parts of this country that would have been devastated over the last 25 years because of free trade, because they didn't just lose their jobs, they lost their towns. So I think President Trump has taken the attitude, you know, free trade is great, but GDP isn't just a number, it's people. And there are whole parts of this country that have suffered terribly, and we have the freest markets in the world, and he wants to reorder it. And I have a lot of sympathy with that. And I think one thing that isn't said enough is that the United States, if that's your goal, the United States is in the best possible position to negotiate towards that goal, because the percentage of US GDP that is composed of exports is only 11%. It's the lowest percentage pretty much of any country on planet Earth. Europe, every country is in excess of 30, except for Germany, which is over 40. Mexico and Canada are over 35%. China, if you factor in all the stuff that they do through Vietnam and Cambodia, is probably 30%. So what's going to happen over the next several months are negotiations and what's going to become veryso if people are rational. This is where I don't know what's going to happen. If countries are rational, they would. Canada and Mexico would come to the United States and basically beg, we will do what you want. Because of the 35% that Mexico and Canada have of their GDP from exports, 25 points of that 35% is just exports to the United States. Those two countries hold no cards. Now. Europe is not much better. And so I think if everybody's rational, they'll lower their barriers. Now, that doesn't mean everybody's rational. You know, there's politics, people might be, you know, some of the politicians might be afraid if we give in, we're going to lose our jobs. That's the wild card. If reasonable heads prevail, Trump will get pretty much what he wants.
- [19:00]
Melissa Lee
Let's say the truth is somewhere in between.
- [19:03]
Steve Eisman
Which truth?
- [19:04]
Melissa Lee
In terms of countries caving on one end, or politicians being afraid of losing their jobs so they don't cave? Let's say they agree to some and not others. Is it worth the pain, in your view, is it worth the pain that we're going through in the markets?
- [19:17]
Steve Eisman
To whom?
- [19:18]
Melissa Lee
To our country. To the markets.
- [19:20]
Steve Eisman
Well, there's the people in the markets who are upset that they've lost money. And I'm not going to kid you, I'm one of those people. I'm long only I've lost plenty. But then there are the rest. Everybody else in the country who lost their jobs in their towns, they're cheering. So who voted for the President? They did. So, I mean, look, you can agree with President Trump, you can disagree with President Trump. One thing I actually find extremely admirable about him, he's one of the few politicians in my lifetime who actually does what he says he's going to do. He has told you that he has been going to do this for years, and now he's gone and done it. And everybody's shocked that he fulfilled his promise. They didn't take him seriously, but he's doing what he said he was going to do.
- [20:04]
Dan Nathan
All right, so here's my take on this, though. I don't think trade deficits, by definition, are a bad thing. I think they can be, but I don't think it's just a binary thing, wins and losses. And I'll say this, he talks about us getting ripped off. I'm sure the United States is being taken advantage of by different countries, but we are 5% of the global population, we're 30% of the global economy. It's hard to say we're getting ripped off when you look at numbers like that.
- [20:30]
Steve Eisman
Just thoughts again. Who's getting ripped off? GDP's not just a number, it's people.
- [20:37]
Dan Nathan
I agree.
- [20:38]
Steve Eisman
If you've traveled parts of this country like I have, and you go through the Midwest and parts of the south, it doesn't look so good. You know, if you're on the coast and Texas and New York and Florida, it looks great. You know, Clinton ushered in with NAFTA and the wto, a massive bull market that everybody around this table, including me, has benefited enormously from. But not everybody in the country benefited. And what is being proposed here is to benefit those people. And you know what's going to happen? Like I said, are politicians going to be rational or not? I mean, I find it amusing that the new Prime Minister of Canada has been so belligerent. When you have 25% of your GDP in the form of exports to the United States, you should act a little more kindly because you're not holding too many cards.
- [21:33]
Tim Seymour
But is this about kissing the ring and doing deals? Because the other side of that would then imply there isn't really structural change that's intended. That there are, there are tariffs to clean up. There are strategic industry, strategic industries we want to support. And I guess I would just get back to while there are towns that have been ravaged around this country, I would support that the standard of living in the United States that comes from a reserve currency and that the rest of the world finances our deficit is a privilege and something that won't continue indefinitely. It's not going to change overnight.
- [22:04]
Steve Eisman
I don't agree with that. I don't agree with that at all.
- [22:05]
Tim Seymour
So you don't think I think the.
- [22:07]
Steve Eisman
Idea that the US Is going to lose its reserve.
- [22:09]
Tim Seymour
No, I'm not suggesting that.
- [22:11]
Steve Eisman
I don't.
- [22:12]
Tim Seymour
But, but, but there's no question that we have been given the ability to really finance whatever we want to do. And you think that's going to hold on.
- [22:19]
Steve Eisman
And I don't think that.
- [22:20]
Tim Seymour
I mean, trade terms are being cut by country to country bilaterally all over the world right now. So you don't think that that changes over time?
- [22:30]
Steve Eisman
I think ending the US As a reserve currency, the world would take so much. It's unimaginable to me. I mean, one thing that I think people don't realize is the entire global financial system operates on Treasuries overnight. Repos operate on Treasuries. For the reserve currency of the United States to end, you need an alternative. And there is no alternative. It's not crypto, it's not China bonds, it's not European bonds, it's not Italian bonds. At this point, there's no alternative. Until. If there was an alternative, I'd worry. Until there's an alternative, I'm not so worried.
- [23:05]
Guy Adami
So, Steve, going back to the early 90s, you know, NAFTA and WTO for China, if you think about this, and again, we all are sympathetic to the fact that US manufacturing has been hollowed out by a lot of those policies. But think about the flip side of that. In that time period, we have some of the most successful Companies that the world has ever seen, and they've all been built here and they've had this ability to innovate and they've had this ability to export this technology around the world, which has put us in this situation. Kind of talk about all the. It's reinforced the idea of American exceptionalism and the access to being the reserve currency of the world and everyone else holds our debt. And I guess my point is, is like there are gives and takes here. You know what I mean? And so at this point, it just seems if Apple, one of the largest market, it is the largest market cap company in the world, if they build 95% of their products overseas and therefore the world benefits from that to some degree, how can you force them to come back and make iPhones here that are going to cost $2,000 versus $1,000 dollars? It just can't be done.
- [24:08]
Steve Eisman
I mean, you're talking about, I, you know, could Apple build stuff here? Maybe, maybe not. But that doesn't mean we have to build everything here. There are a lot of things that, that could come back that, that are not necessarily Apple cars.
- [24:20]
Guy Adami
You know, the average price of a car here is, you know, 43,000.
- [24:22]
Steve Eisman
I mean, again, the question is, whose ox is being gored? If you're sitting in the Midwest and you don't have a job and your town's devastated, but you could buy cheap T shirts, would you prefer that to having a much better job and paying more for T shirts?
- [24:38]
Guy Adami
Well, they're going to be the first people that are fired. I just saw stellantis just fired 900 people in Michigan and Indiana. They're gonna be the first people fired in a protracted trade war. And if we have a recession. No, I hate this.
- [24:48]
Steve Eisman
Look, a trade war is bad. The reason why, again, cooler heads will prevail is that again, in a trade war, everybody will suffer. The US will suffer the least. So, you know, again, if you're Canada and you've had these tariffs imposed on you, you don't have many cards to play. And the same is really true for Europe and the same is really true for Mexico. So hopefully it'll get negotiated away. But like I said, we'll see.
- [25:17]
Melissa Lee
I mean, the riddle here is that, you know, you can bring all these manufacturing jobs back, but there's still a half a million manufacturing jobs open in the United States. The worker dynamic is, is a question.
- [25:27]
Tim Seymour
And yet at record unemployment and a lot of people don't want to work those jobs anyway.
- [25:31]
Melissa Lee
We have to. We hope you'll come back. Steve I would appreciate the Eisenhower Playbook is his podcast coming up Much more in today's market volatility as recession fears ramp up. Wire next guest sees even more downside ahead. Key technical levels from chartmaster, Carter Worth and the tariff impact on China stocks. But first, Max7 stocks striving to bounce back from the recent tumble. But a long time bull is throwing in the towel in one of these names. The reasons behind the move when Fast money returns.
- [26:05]
Courtney Garcia
For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together we're building a healthier future. Learn more@mycare.org tomorrow.
- [26:22]
Guy Adami
Legendary investor Ray Dalio. Global market meltdown, risk of recession, what it means for your investments and protecting your Money. Squawk Box tomorrow 6am Eastern CNBC.
- [26:38]
Melissa Lee
Welcome back to Fast Money. Apple continuing to drop today down more than 18% over the past week, hitting their lowest level since last May. The company also reportedly planning to source more of their iPhones from India as a potential tariff workaround. Apple's decline coming even as some of the other Mag 7 names managed to bounce today. Would you make of this, Dan?
- [26:55]
Guy Adami
A lot of headwinds here, right? And so I mean the biggest one is fundamental when you think about it. We're talking about generally and they don't have it and you say oh well maybe that would be a good thing for them in a market like this. But you think of squarely in the, in the sights of this trade war, it's a pretty disappointing thing. It also had a really difficult valuation. So a lot of things going on there. You probably have room to buy it to the downside at some point and not so distant future.
- [27:18]
Courtney Garcia
Yeah, I think the big story here is obviously what's going on with China, right. I mean we now have potentially over 100% tariffs that are going on in China if they don't take that back this week. And they have a lot of business in China. But there's been a lot of conversation that okay, we need to step back from these tariffs because if something happens, if there's any sort of negotiation, AI is still a story that people have forgotten about. They don't have that to fall back on either. So I think there's just a lot of things here with Apple that they just really need to get their, their game together here. And if you see a sold out of the consumer, let's say the tariffs do stay on. People aren't going to buy their iPhone. So I think there's just a lot of concerns here. There's plenty of areas in the market. Apple's not one that I would step into at this point in time.
- [27:53]
Melissa Lee
What happened? WWDC.
- [27:55]
Dan Nathan
Yes.
- [27:56]
Melissa Lee
Yeah.
- [27:57]
Dan Nathan
June 10th of last year, stock closed, I think at 193ish.
- [28:01]
Melissa Lee
Where are we now below?
- [28:03]
Dan Nathan
Yeah, well, you know, for a while we talked about potential round trip that obviously didn't work out. It traded up to 260. But what we've also said, I think it's, it's proven to be correct. Apple wins to passive investing more than any other company on the planet. It loses in active investing because when passive goes active, it's on the way down. So what works for them on the way?
- [28:23]
Tim Seymour
That again, that was nice. It's like that again for the folks at home.
- [28:27]
Dan Nathan
I don't know if I can do.
- [28:28]
Tim Seymour
It again when passive, when markets are going down.
- [28:33]
Dan Nathan
Yeah, and that's what, that's what we've seen over the last week or so. So. So you know, for all you Apple lovers out there, this is the other side of that mountain.
- [28:40]
Melissa Lee
I feel like we should embroider that on a sampler.
- [28:42]
Guy Adami
Well, usually you say escalator up, elevator down. Don't usually say rarely really, but we.
- [28:49]
Melissa Lee
Markets are going out that as we go to break. Coming up, China stock sinking today. The Hang Seng seeing its biggest drop since 1997 overnight. What is behind this move? Plus what the chartmaster sees in the US Market technicals and why one strategist is positioning for more downside. You're watching Fast Money live from the NASDAQ markets at Times Square. Back right after this.
- [29:15]
Courtney Garcia
For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn more@mycare.org tomorrow.
- [29:32]
Guy Adami
Legendary investor Ray Dalio. Global market meltdown, risk of recession, what it means for your investments and protecting your money. Squawk box tomorrow, 6:00am Eastern, CNBC.
- [29:50]
Melissa Lee
Welcome back to Fast Money. Last week, before Trump's tariffs were announced, the chartmaster declared that we are officially in a bear market. At today's lows, the S and P was more than 20% off its record high, but it managed to bounce back from those levels. So where do we go from here? Let's bring in Carter. Worth of worth. Charting for more Carter.
- [30:07]
Tim Seymour
Yeah, messy, sloppy. I guess the words that come to mind. But what we know is that this has been long in the making. If you look at the Russell 3000 or here chart of the S&P 500.
- [30:20]
Steve Eisman
We've now sold off 20 plus percent.
- [30:22]
Tim Seymour
And we've gone not randomly to the penny, to a well defined uptrend line that's in effect since the COVID low. That trend line is the COVID low. Then the 2022 bear market low. We dropped 27% at that point. And here we are again also and you might have this on a second chart. It's a key reference point because we're back to the penny, the 2021 bull market peak, meaning we had the COVID plunge and then the surge off the COVID low which peaked in 2021 before.
- [30:52]
Guy Adami
The 2022 bear market.
- [30:54]
Tim Seymour
That also is exactly the same level as the uptrend. So we put the two preceding charts together. This is a major reference point. Now we have found support literally at that level, 4850 and bounced decently.
- [31:08]
Steve Eisman
I think the bounce has room to run.
- [31:10]
Tim Seymour
So for those who are on the trading side of things, those who have the dexterity to move in and out and be nimble, I would anticipate higher prices from here.
- [31:19]
Melissa Lee
Kyler, thank you. Carter Braxton worth of worth charting. Our next guest remains very cautious and says seeing The S&P 500 fall to the mid 4000 is not unreasonable. Cities head of equity trading strategy Stuart Kaiser joins us now. Stuart, great to have you with us. Hi, how are you doing? So how, how are you? How are clients positioning at this point for that downside or for the bounce?
- [31:41]
Stuart Kaiser
You know, I think most people are positioned for the downside. Today was a little bit of a wake up call. You know, you got those sort of phantom headlines early in the day and you know, very, very aggressive squeeze higher. So I think that you know, tells you to cut his point. There's a lot of washed out positioning and a lot of negative sentiment and that does open you up to kind of squeezy type risks. But the bottom line is the questions we're getting are about knock on effects from the tariff. I mean we could sit around and agree, hey, around 4900 is priced in the tariffs that have been announced. But what the market is now worried about is what does that mean for growth on a go forward basis? Because certainly recession risks aren't, aren't fully discounted by the market market yet.
- [32:14]
Dan Nathan
You heard Tim bring up credit correctly. I mean one day, two day move in credit has been astonishing. And the move in the bond market today was probably one of the biggest move we've seen in three or four years. Speak to that?
- [32:24]
Stuart Kaiser
Yeah, you know, credit for instance. You know, we've seen a lot of hedging in credit probably for the last four to six weeks. Hygie puts at various strikes, kind of somewhere in the mid to high 70s. So not too surprising to see some weakness there. I think institutional investors were kind of concerned about that space going in yields today. You know, very good question about what's going on on that side. You know, we have a couple auctions coming up which I think is going to be very important. You know, there's some concern about dollar based trade maybe reducing demand for. For dollar based bonds. So it definitely raises your awareness when you get that when the bond equity correlations seem to be breaking down because you know one side of that trade is going to have to be confirmed. A lot of folks kind of look at the rates market as usually being right. So I do think that move in yields has you kind of on your on your toes a little bit going into the rest of the week.
- [33:06]
Tim Seymour
Stuart, talk about the semiconductors sector because you know, not only was this where we were getting all our growth, but obviously where some of the heaviest positioning was and where we pulled back almost 30% where we really made no relative money since last summer. I mean, at what point? Because again semi's kind of lead, right? At what point have they washed themselves out first and what would you be looking for in price action and or what you want to hear from the companies around earnings?
- [33:29]
Stuart Kaiser
Yeah, I mean it's a great point. I think semi was up about 3% today at least. S&P 500 semis were. I would put them kind of in what I would call the core positioning bucket, which was the stocks were both high momentum and high growth growth. In February when we hit this top, you would have had a number of semiconductor stocks in that basket. And you know what, we need to see some stability there, frankly. I mean those stocks are down almost 8% last week. We did get a bounce today. So I think I would put them kind of at the right at the vortex of kind of this position dynamic earnings. You know, earnings are going to be the biggest wildcard we've seen in a while. You know, if you're a company here, you kind of have three choices, right? You defend your numbers and you better have a lot of evidence for why you kitchen sink stuff. In that case, you better hope your stock is really washed out and there's money to buy or you have this middle ground where you kind of like punt it a little bit and talk about uncertainty I'm not sure what the semi stocks are going to do just because they're so exposed to tariff risk. So it's going to be unlikely that they're going to be able to successfully defend numbers. So they're going to kind of be in one of those other two categories. And I think that does open up some risk around earnings. But look, if the response to payrolls last week was any indication, you know, fundamental data might not matter right now anyway. We may just be back to tariff headlines.
- [34:35]
Courtney Garcia
Now. When you looked at that intraday change day, right, we got out that headline that said Trump was going to delay the tariffs by 90 days. That turned out to be false. But the markets moved positive on that news, then move negative. Is that some sort of indication that if we do get some sort of reprieve with these tariffs that markets are going to go kind of off to the races or what has this done to consumer and CEO confidence that even if this gets resolved, is that still going to be an issue for investors? Mr. Moving forward, yeah.
- [34:57]
Stuart Kaiser
I think what it tells you is there's a lot of squeeze risk here, incentive. It's really negative. And I think the knock on effect of that move was I think you really hurt the shorts on the way up and I think that was a reminder to them that the risk reward around being short to the market here is much more balanced. And I think that's why they didn't press those shorts when you got the Tariff Fed lines on China potential after that. So I think when you kind of, I think positioning definitely got zapped there and that and that kind of took a little bit of the confidence away from them to kind of lead leaned into the market in the back half of the trading day. But yeah, I think it really speaks to how washed out sentiment and positioning has gotten, especially in futures from kind of that macro cohort of investors.
- [35:32]
Melissa Lee
Stuart, thanks for coming back. Good to see you.
- [35:33]
Guy Adami
Stuart Kaiser to mention semiconductors and we've talked about the leadership. We also talked about how it stalled out probably about six months ago. And you look at the SMH, you know, what is it, 30 some percent is Taiwan Sami and it's in video. And you know, think about Nvidia. It went from just this story that people couldn't get enough of just, just, you know, a handful of months ago. Last year they got 13% of their sales from China. Supposedly the Chinese are like just running around trying to get orders for the H20. This is a very like, I don't know, dumbed down hopper chip Right. They're trying to get them in before the export bans. So all of a sudden you have a headwind potentially of China, a big chunk of Nvidia sales and then you go to, and you think about okay, are these hyperscale is going to cut that Capex. So all of a sudden you have one of the major pillars of this trade over the last, you know, call it two years or so and it doesn't look so safe right here despite it trading really cheap. And that's kind of the point. I think there's a handful of names out there like that that might not be the leadership for a very long time. They might participate again when the generative AI trade gets kicked up again in a better environment. But it doesn't seem like that's going to save the market right now.
- [36:39]
Melissa Lee
Coming up, much more of the China trade. Fast money's back into. Welcome back to fast money. Chinese ETF sinking more than 6% today as markets overseas dropped sharply overnight after their holiday on Friday. Back at home, President Trump threatening to raise tariffs on Chinese exports by an additional 50% unless Beijing lifts its retaliatory tariffs tomorrow. Meantime, there are some talks that China might accelerate or increase stimulus domestically to help offset these tariffs. What do you make of this trade right now?
- [37:19]
Tim Seymour
You know, look, it was, it's been a very difficult three days for that China trade. That China trade which was showing a lot of resilience in the face of the US trade and it makes sense. And if you're investing in Alibaba just reminded the bottom up fundamentals that are not really top down. It's TMALL or so Taobao, you know you've got 5, 6, 7% GMV growth, growth. You've had an Ali cloud story which is really one where they are investing Capex for the first time. And we've certainly talked about the governance factor where they are truly the national champion companies. They are being supported by the Chinese government. So and valuations look at 12 times 26 EBITDA on Alibaba. This is, this is extremely cheap. The story for international so mega and that's making international great again. And that, that's Europe, that's Asia, that's parts of, of I think finding blue chip companies around the world that actually are really growing their payout levels. But I, I think the dollar has peaked. I think the US stocks, I mean now everyone's using the US exceptionalism term. Is it, I mean, you know, no one even used that term before but let's, is it over no is is are we ever going to see seven stocks be 34% or 36% of the S and P? I think there's a real challenge to that. I think this administration wants the dollar go substantially lower. I think you're seeing a dynamic where other companies in other parts of the world are going to really benefit. And therefore I do think this is still a time to be picking your spots and making your list internationally for sure.
- [38:38]
Melissa Lee
If there is a US Recession, if there is a global recession though, do you want to be in these? Do you want to be in meager.
- [38:46]
Tim Seymour
Look, emerging markets in my history during a recession are going to be hit even harder than developed market companies. No question. The question is after all this time and all this relative underperformance and actually a dollar that's going weaker, you've got currency support, you've got lower rate support. I actually think that part of that relative outperformance that we saw was a function of all of these things reading through even a slower growth economy. These are companies that can do okay in this new order.
- [39:13]
Dan Nathan
There's a me real quick. There's only a round of to your point stimulus in China. I thought Alibaba would stop at 118. It overshot but it traded two times normal volume. I think you buy baba here be.
- [39:22]
Melissa Lee
In tube it is the B.
- [39:24]
Dan Nathan
And thanks for paying attention, Mel.
- [39:26]
Melissa Lee
Coming up, a potential hiding spot in the market. Sell off. One top analyst has a couple of pharma stocks that could be a port in the storm. The details when fast money returns. Welcome back to Fast Money. Let's get to our call of the day on pharma stocks. Leering partners highlighting names that could serve as hideouts for investors. Investors looking to steer clear of tariff uncertainty among large cap stocks. Analysts naming Sanofi and Vertex as two companies that have potentially less exposure within mid caps. Halozyme Therapeutics and Revant Sciences, the leader founded by former Dogeco CEO Vivek Ramaswamy. Those companies get most of the revenue from royalties and milestones which aren't subject to levies. The point here though is that pharma has a reprieve. For now it's under investigation, but there could be tariffs to come. And for PhRMA, most of the R and D is done here in the United States, but it is manufactured overseas. Eli Lilly for instance, is building an $800 million plant in Ireland, which is where a lot of manufacturing happens.
- [40:31]
Dan Nathan
Your lead was poured in a storm and I'll go sort of biotech IBB traded down to levels we lost on the spring of 2022. I think in terms of just risk reward that sets up really well, that's where you want to be. I mean big cap pharma has its issues, markets not traded well at all. Eli Lilly sort of struggling a little bit here. But but biotech, if you're looking for a place, I think IBB will get you done.
- [40:51]
Courtney Garcia
And part of the story too with Lilly is we did see some news out that Medicare and Medicaid were not going to expand to include their anti obesity drugs. And I think the question is down the line, do they have other, you know, other applications they can use that would still get it under Medicare. So you're seeing this kind of twofold. There's some very company specific stuff. And overall with the markets, I do think when you're seeing this kind of sell off, it's probably not a bad place to start to take a look at here. But again, this is going to be exposed to the tariff news. I don't know what for the end of that. So, so jump, not jumping out of two feet, but I do think starting a nibble here is not a bad idea.
- [41:20]
Melissa Lee
All right, coming up, Trump's tariff plan sending shockwaves through global markets. But that didn't stop retail traders last last week. Will they continue to file into the markets? That is next. And here's a sneak peek at the Kramer cam. Jim is chatting exclusively with the CEO of Levi Strauss. Catch the full interview. Top of the hour on Mad Money. More fast. And welcome back to FAST money. Even with stocks down sharply since President Trump's tariff announcement last Wednesday, retail investors were buying up equities late last week. But the shopping spree appears to be fading fast. Kate Rooney's got the details. Hey, Kate. Hi, Mel. Yeah, so that bullish dip buying did not last too long. JP Morgan now calling out massive selling by retail investors today after what was a historic level of buying that we saw last week. As of 2:00 today, individual investors had sold a net $1.7 billion in outflows from some of those single stocks. More than offset the inflows into ETFs. They also turned bearish on in video that is a widely held retail investor favorite. There was about $244 million of an imbalance there. Also turned bearish on Tesla and the rest of the Mag 7 except for Google. The this is all according to JP Morgan. And Ford. Ford was net sold following last week's strongest buy streak for that stock in its history when you look at the retail flows, it does come after I mentioned record action from this group last week that happened Thursday, if you see that chart there. But Vander research noting that even on Friday activity was pretty close to those records. Some defensive trades popped up though. An inverse ETF for the tech heavy QS climbed to the top of Vanda's most traded list. First time that has happened in more than two years, suggesting a bit more hedging by that group. Also some pretty steady buying of Vanguard's S and P index. So analysts say that tends to hint a dollar cost averaging by some of the more conservative investors. And Robinhood noted that aggressive dip buying did start wearing off. Steve Quirk, the chief brokerage officer over there telling me he has been seeing this migration to ETFs over some of the riskier single stocks now. All right, Kate, thank you. Kate Rooney. Meantime, Bitcoin is back to pre election level. So that's the other favorite retail trade that's really come, come back here.
- [43:33]
Dan Nathan
I think that's really problematic the fact that bitcoin has not been performing in an environment where theoretically it's set up to perform. And you know, I think if you look at strategies, their average price is probably getting up towards 70,000 if they meet somewhere between 72 and 74 which I think is almost inevitable. I think we have a problem in.
- [43:51]
Melissa Lee
The broader market market the sell off retail trades dry up bad, bad, bad for Robinhood or there are other ways since they diversified.
- [43:59]
Guy Adami
Yeah, I mean they'll come back. That's, I mean they've been trained to come back and you know, I mean, yeah, I think some of those guys are just fine. I think right now it's really hard. I think there's been some margin calls. I think they're going to step back a little bit as things get ugly. But the retail come back.
- [44:13]
Melissa Lee
Up next, final trades, final trade time.
- [44:25]
Tim Seymour
Tim, I think gold is where you want to stay. I think gold miners are going to show earnings season that they really have earnings momentum.
- [44:32]
Courtney Garcia
Courtney Banks a bit hard here but I think JP Morgan is one that you want to take care of that dividend that valuation. I think you want to hold it here.
- [44:40]
Melissa Lee
Dan.
- [44:41]
Guy Adami
Like I said, the retail trader is going to come back. Hood kiss 30 below that I think.
- [44:44]
Dan Nathan
Average Qualcomm interesting day. Traded lower, closed higher big volume day Qualcomm.
- [44:50]
Melissa Lee
Melissa Lee, thank you for watching Fast Money. See you back here tomorrow at 5. Mad Money Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do.
- [45:02]
Courtney Garcia
Not reflect the opinions of cnbc, NBC Universal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet, or another medium.
- [45:12]
Melissa Lee
You should not treat any opinion expressed on this podcast as a specific inducement.
- [45:16]
Courtney Garcia
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.
- [45:24]
Melissa Lee
Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it.
- [45:31]
Courtney Garcia
Should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn more@mycare.org.