CNBC's "Fast Money" Podcast Summary Episode: Markets Rip Higher On Tariff Pause… And Why China Isn’t Getting Any Relief
Release Date: April 9, 2025

Introduction

Hosted by Melissa Lee, CNBC's "Fast Money" delves into the significant market movements following President Trump's announcement to pause reciprocal tariffs with over 75 nations. The episode, recorded live from the Nasdaq in Times Square, examines the dramatic surge in major stock indices and scrutinizes the underlying factors driving this rebound.

Market Reaction to Tariff Pause

Melissa Lee opens the discussion by highlighting the unprecedented market rally:

• Dow Jones Industrial Average: Climbed over 2,900 points, marking its biggest point gain on record.
• Nasdaq Composite: Surged 12%, its best day since January 2001.
• S&P 500: Increased by 9.5%, its largest jump since October 2008.
• Russell 2000 (Small-Cap Index): Rose nearly 9%.
• Mega Cap Tech Stocks:
  • Tesla: Up 22%
  • Apple: Increased by 15%, the largest gain since 1998.

Melissa notes that despite these gains, major markets remain down over 10% from their previous records since the initial tariff announcements.

President Trump's Tariff Policy and Commerce Secretary Howard Lutnick's Interview [06:34 - 20:09]

Howard Lutnick, CNBC's Commerce Secretary, joins Melissa to discuss the administration's stance on tariffs:

• Objective: Addressing the $1.2 trillion trade deficit by enforcing fair trade practices.
• President Trump's View: Lutnick emphasizes that the tariff pause is a strategic move to engage with over 75 countries seeking better trade agreements with the U.S., while maintaining strict tariffs on China.
• Quote:

  "Donald Trump is leading the charge to fix the fundamental trade imbalances that have been going on for this country for 35 years."
  — Howard Lutnick [07:25]

Lutnick asserts that the administration remains committed to fair trade, highlighting the importance of bringing jobs and manufacturing back to America. He downplays concerns from Wall Street, emphasizing long-term benefits over short-term market reactions.

China's Response and Expert Opinions [30:53 - 38:37]

The focus shifts to China's retaliatory actions and potential future moves:

• Tariff Escalation:

  • U.S. imposed an 84% tariff on Chinese goods.
  • China retaliated by matching with an 84% tariff, which the U.S. further increased to 125%.

• Expert Insights:

  • Stephen Roach (Former Morgan Stanley Asia Chair): Warns against the prolonged tariff war, predicting that continued pressures could lead to economic strain without resolution.
  • Michael Schumacher (Wells Fargo Securities): Suggests that China is more likely to weaken its currency rather than sell Treasuries en masse, indicating a preference for currency manipulation over drastic financial measures.

• Quote:

  "Globalism coming to an end... This is just a battle between Trump and Xi that won't end well."
  — Stephen Roach [35:40]

The experts caution that isolating China through tariffs could escalate tensions, potentially impacting global trade dynamics and economic stability.

Impact on Specific Sectors

Retail: Walmart's Resilience [28:02 - 30:53]

Melissa discusses Walmart's impressive performance amid tariff uncertainties:

• Stock Surge: Shares up nearly 10%.

• Investor Meeting Highlights:

  • Guidance: Reiterated sales growth forecast of 3-4%.
  • Operating Income: Range widened, but Walmart remains optimistic.
  • CEO Doug McMillian:

    "We just don't know enough to say that we're not going to make this year."
    [28:29]

• E-Commerce Expansion: Walmart's U.S. e-commerce business turned profitable for the first time this quarter, currently constituting 18% of total U.S. sales with projections to reach 60% within five years.

Courtney Reagan, reporting from Dallas, adds that Walmart plans to absorb some price increases to maintain low prices, ensuring flexibility amidst fluctuating tariffs.

Biopharma Sector [39:37 - 44:59]

BMO's Evan Siegerman addresses uncertainties in the pharmaceutical industry:

• Tariff Impact:

  • Supply Chains: Companies like Merck and Lilly have significant U.S.-based manufacturing, allowing them to withstand tariff pressures.
  • Investment in U.S. Manufacturing: Lilly's commitment to investing $50 billion in U.S. production aims to mitigate reliance on foreign manufacturing hubs like Ireland.

• Generic Drugs Risk: Generic manufacturers, primarily based in India and China, face thin margins. Tariffs could render many generic drugs unprofitable, though major companies have divested from generics to minimize exposure.

• Quote:

  "We're very against any pharmaceutical tariffs. We think they're bad for the sector."
  — Evan Siegerman [41:10]

Banks' Performance and Earnings Outlook [44:58 - 47:52]

The discussion moves to the financial sector, focusing on bank stocks and upcoming earnings:

• Stock Gains:

  • Goldman Sachs & Morgan Stanley: Each surged over 11%.
  • Citigroup, JP Morgan, Wells Fargo: Gains between 7-9%.

• Earnings Expectations:

  • First Batch: JP Morgan, Wells Fargo, and Morgan Stanley to report on Friday.
  • Investment Strategy:
    • Tim (Panelist): Advises favoring well-rounded banks like JP Morgan for cautious approaches.
    • Michael Schumacher: Predicts a flattening yield curve due to weak growth and Fed policies, which could affect bank profitability.

Final Trades and Recommendations [47:52 - 48:26]

Panelists conclude with trading strategies:

• Long U.S. Dollar:

  • Against Mexican Peso: Target 22, anticipating Mexico's economy will suffer.
  • Against Chinese Yuan (CNY): Target 7.70 in a few months, expecting further currency weakening amid trade tensions.

• Wells Fargo Strategy:

  "Citibank, I think rallies more than the rest... The Vietnam ETF presents an interesting trading opportunity here."
  — Michael Schumacher [48:10]

Conclusion

Melissa Lee wraps up the episode by summarizing the day's highlights:

• Market Surge: Driven by Trump's tariff pause, with significant gains across all major indices.
• Sector Performance: Tech, retail, biopharma, and banking sectors all showing resilience and growth.
• Ongoing Trade War: Despite the pause, escalated tariffs on China indicate a persistent trade conflict with potential long-term implications.

Notable Quotes

1. Howard Lutnick on Tariffs:

   "Donald Trump is leading the charge to fix the fundamental trade imbalances that have been going on for this country for 35 years."
   [07:25]

2. Stephen Roach on Globalism:

   "Globalism coming to an end... This is just a battle between Trump and Xi that won't end well."
   [35:40]

3. Evan Siegerman on Pharmaceuticals:

   "We're very against any pharmaceutical tariffs. We think they're bad for the sector."
   [41:10]

4. Michael Schumacher on Currency Trades:

   "Citibank, I think rallies more than the rest... The Vietnam ETF presents an interesting trading opportunity here."
   [48:10]

This episode of "Fast Money" provides a comprehensive analysis of the immediate market rebound following the tariff pause, the complexities of the ongoing trade war with China, and the sector-specific impacts on retail, pharmaceuticals, and banking. The panel offers actionable insights and forecasts, emphasizing the volatility and uncertainty that continue to shape the financial landscape.