← CNBC's "Fast Money"
CNBC's "Fast Money"
Mini Correction or Fundamental Rethinking?… And Bitcoin Bounces Back After Plunge 2/6/26
00:43:23
Stocks staging a massive rebound after yesterday’s sell-off, with tech, software, and crypto all bouncing back. But is the rally just a mini correction, or a broader shift in the market fundamentals? Plus The next move in Bitcoin after it’s snapback, the latest prediction market plays ahead of Sunday’s big game, and why retail investors are staying upbeat despite the recent weakness. Fast Money Disclaimer
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I look, I think there's something we've sort of been in the process of, for the last three months or so kind of rotating out of growth into cyclicals and value, you know, maybe fading some of the Mag 7 leadership. I think what changed frankly is instead of that being a nice steady trend, it accelerated. The volatility hit people and I think it, it definitely caught folks by, by surprise. You know, the reaction to Meta, Google and Microsoft earnings, I think also, you know, was, was attention grabbing, you know, just because of the absolute size of the CapEx spend. I think what maybe happened a little bit later in the week was people said, wait a second, I don't like them spending 200 billion. I sure like the stocks that they're spending 200 billion on though. And I think we kind of saw that play out as the week went on a bit. Yeah, yeah. I mean we went. When you look at the patterns, you always try to, as a trader, you like to see where the pattern is and where it's going. So we went from AI to memory to questioning valuation to replacement in software. And then when you look at the replacement in software, it was indiscriminate selling. They're going to replace everything now. Every software company is going to be replaced and now you're going to see them sift through the carcasses. When you look at a service now that was dramatically hit a sales force.
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Off a good quarter, by the way.
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Off a good quarter. So we always say when stocks don't, when they don't go up off a good quarter, that tells you something. When they don't go down off terrible news, it tells you something. So I think it's a rehashing, it's sifting right now with the overall market. I think it was maybe conflated with crypto. So you have crypto acting like a risk asset and crypto, when you, when you look at crypto and the beaten beating that it's taken. But then you compare it to some of the software stocks, some of the software stocks are more than, more down than crypto. So is it a risk off Is it geopolitical? Is it really about replacement? Is it about overspend? But Stuart just talked about it, right? You have operating cash flow up around 20%, you have free cash flow negative and you have capex up 60%. These are things that bull markets long in the tooth, bull markets start to question and that's what we saw this week.
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First off, we're specifically Bonnewin. Did you think that the bounce today was convincing? Was very heavy volume on the igv, but it was still, you know, two plus percent bounce. Do you think we're clear or do you think that there's more sort of downside pressure here?
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I think there's more downside pressure. I think this is impulse buying, kind of the buy the dip nature that we've been rewarded for time and time again over the last couple of years. And frankly, I think, you know, some of the volatility that we saw both on the way up and way down encouraged people. This was not, to Stu's point earlier when we saw the rotation, it was a bit more of an orderly redistribution of allocation. The sell offs were intact, but you could see like an orderly step down and to the right. This felt like the beginning of capitulation. And then when you saw the Vix, you mentioned this earlier, we saw that Vix collapse 5, 6 points. It seemed like people had just forgotten and put it so quickly in their rear rearview mirror. It seemed like this acceleration to the downside was a confirmation that people needed to start to step in. But I don't think that's likely the short term bottom for one, as Steve pointed out, there's still a lot of sorting out to do in terms of what the implications are for software. Where I think people got things wrong and why they stepped in is that you cannot have this reacceleration of AI capex spend and not have the AI story and simultaneously have AI disrupting all of software. So part of that story has got to give. So either AI is not going to be as disruptive and the capex spin is not justified, or AI is going to be disruptive and so transformative that these capex numbers are going to be justified over the long run.
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I agree with. I mean software should have been a hedge in theory to the AI trade, right? AI successful kill software or is not successful and software lives. I mean to Bono and point, having both be true is sort of hard to justify. Yet that's what we saw today, today and this week and the selling immediately, like when Claude was released its tools for the legal profession. We saw those stocks just get slammed immediately. You know, Thomson Reuters facts that they got slammed. I mean, it was quite a reaction, a quick reaction.
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Yeah. I think, you know, if you were assuming that there was a, an existential risk to software from AI, for instance, I think those models earlier in the week said, well, this actually might not be a ten year, it might be a three year process. I need to get out of all of this stuff collectively. And then to Bono was this point, you know, as the dust settled, they say, well actually I don't need to get rid of all of it. Maybe I need to get out of half a dozen of these or 12 of these. And I think we did see some kind of recovery buying there. IGV is an interesting one. You know, you get a bid for that. But if you go down the membership list of igv, you have Microsoft, Palantir and then a group of stocks that you debate, you know, the survivability of AI. And so, you know, to Bono's point, I think this is like a knee jerk by software. But if you go stock by stock after two or three, you get a little bit uneasy within that igv. And when you look at the tape to your point, when things get hit immediately, AI drives algorithms now in selling the market. So as soon as something prints, it ripples through the market with anything associated to that. So it's kind of a fulfilling cycle that we go through in trading. Having said that, compare this to the April sell off. How many days did it take to recapture? And you can't really do it because the market as a whole didn't cave the way we did in April. The tariff tantrum.
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Right.
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But if you look at the stocks that were sold off dramatically, you can make it analogous to April. And it was only nine days. Now I'm not saying they're all going to recoup all of their losses, but it was nine days and we were back above where it was. So be careful. These things are whippy both ways.
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Right. So we saw a huge decline in Microsoft off the bat and then we had capex. That whole idea of Capex going to an Nvidia or Broadcom. Would you put fresh money today into a Microsoft or a Broadcom.
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She just gave you? Would you rather? Well, I would rather both, but I'm going to play the game correctly. I'm going to play the game correctly at this point in time. I'm going to say a Broadcom because I do think that at some point, listen, Microsoft is in a downtrend I love the company, but let's play the game. I'm going to choose Broadcom because I do think inference is closer than people think. I also think that while this acceleration is bullish for Nvidia, there is going to come a point where these custom chips are the prevailing, prevailing hardware that's being used. There is no way that these companies are going to continue to spend $200 billion, $185 billion per annum when eventually the switching costs will be lower and they will be able to do this in house. It's why you're seeing the tpu. It's why you're seeing Amazon. Look, they're behind the, behind the curve, but it's why you're seeing them try to, you know, engineer their own custom chips. And I think the beneficiary of that, that custom process is Broadcom.
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I guess the notion is would you buy the software sell off or do you buy the picks and shovels trade? Which seemed to be affirmed by the raised CAPEX numbers.
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I mean I would definitely be, you know, to be honest, when a buyer of the recipients of that spending as opposed to the spending right now, both because that's what the market reaction function is and secondarily the AI gen theme is just something we've been very bullish on for the last 12 months. Not wanting to walk away from that. I would say about 12 months ago, months ago was deep seek and we had a similar kind of shake out there. So that might also be another way to kind of think about how this might play out. And that was the sell off in different wrapping. Right. Deep seat was supposed to be cheaper, more efficient and that day is coming, coming for AI, right? It should be done cheaper and more efficient.
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Meanwhile, Nvidia shares jumping more than 8% today. The biggest percentage gainer on the Dow CEO Jensen Huang told Halftime that the tech industry is 660 billion capex spend is sustainable. Huang also expects AI is not going to crush software like so many fear. Right now.
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We are addressing the largest software opportunity in history for the very first time. Software is not just a tool. A tool is like Excel. Now software uses tools. So these AIs use Excel. And so I think the opportunity for this new era of software is incredible.
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Let's bring in fast money French Munster for reaction. He's managing partner Deepwater Asset Management. Gene, always great to get your take on things. Do you agree with that, that that AI agents are using software? We're not thinking about this in the right way.
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I've got A ton of respect for Jensen and I think that I have a little different view. Let's just play it forward that in fact we are in a new era of software where these agents are using software. Agents using things like Excel, if that is in fact the case, those agents are not going to have full software suites. A typical Salesforce suite, there's different layers of it, but call it 150, $200 a month, that's just simply not going to happen. And so Melissa, from my perspective, I think that the key here is less about these software companies being left behind. Ultimately they're going to push hard to take their domain expertise and integrate with APIs with these bots. That's going to happen. They'll get ahead of it. They understand, of course Sundar talked about this very robust comment about token usage from software companies the December quarter. So they're moving quickly but ultimately it comes down to how disruptive is this going to be at Bowman? I appreciate your comments earlier. Just about, I mean that's one of the roots of it here. So Melissa, my sense is that we're going to have seat loss. I think that these software companies will trade dollars for dimes, a lot of them, the ones that are seat based usage base will do fine. But seat based software companies are going to be challenged not to say we're going to get a bounce in the next three to six months in the software names but if you think three years out, this, this headwind is not going to go away for these companies.
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I want to focus on Microsoft for just a second because Microsoft is one of these companies increasing capex but also feels the threat of AI to the software story. And so when you think about micro365 and how many seats it's, it has 400 million or so. I don't know. 450 is a number. So how do you think about that in the future? I mean it's spending AI, but it's also fueling sort of this existential risk narrative to its own business.
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Yeah, they're kind of hedging at the, at the same point. I think of course Azure in a great place and I think the software side of the business will be somewhat challenged. And so I think, you know, the market's kind of reflecting that and I would just kind of maybe take the conversation again. There's the kind of the near term part which is more exciting to talk about. The long term part. The center of the bullseye right now is talking about agents. That's what Jensen talked about. Today that's what all the buzz is, that's what's pressuring the market. Three years from now what we're going to be talking about is agentic tools and what that means is that essentially that this structure around the Internet effectively is going to be re engineered. It'll work with both humans and with bots. And when you think about that something a company like Microsoft that has relied on humans to do the work for so long. If you fast forward to this kind of re engineering in our venture business we see companies that are pushing this forward. When you think about that impact then you start to get a sense that Microsoft's in a great place. When it comes to Azure, usage is going to go up exponentially but in a tough place probably when it comes to software those seats are going to go down. I mean the cold reality of this is we talk a lot about AI. Most people don't use these tools. The people that use these tools have a strong conviction. Look at the mega caps, how transformative this is going to be. It's going to impact unfortunately knowledge work and Microsoft has exposure to that. So Gene, when you look down I like how you did the current and then three years out. So are you looking down the food chain so to speak, are you looking for smaller tech companies or are we still going to be talking about three of the seven MAG7 names three years from now? So I think some of the two companies that are, to answer your question I think there'll be a fraction of that, I'll say two companies that are in a great place. What we've learned about Claude and Claude bot specifically it's had like three different name changes in the past week here. This idea of personalized AI, this is the stuff warning, don't try it unless you're okay with some security breaches. But ultimately is that concept of what they're doing on personalized AI having these bots, bots work on your behalf like Google and Apple in an incredible place to they're probably in the best place. And so Steve, I think that we're going to see outperformance of those companies that capitalize on this personally. And I think we're going to see a lot of these, some of these smaller companies that people haven't heard of become more top of mind as we think about kind of re engineering the Internet essentially to be bot friendly.
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Gene, great to get your take. Thank you so much.
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Thank you.
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Gene Munster, Deepwater Asset Management. This goes to your point Stu, in terms of taking a look at The IGV and the components, you got the big ones and then you got the other ones that you don't know where they stand in this whole landscape.
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Yeah, look, I think one of the questions I'd have for Jean as well is how much of an advantage do let's say a Microsoft and a Google who are already embedded in large corporate enterprises have over kind of the smaller startups that are trying to break in there? Because if you have access to a Citibank for instance, where we have hundreds and hundreds of AI products and your, your machines are learning and your, and your support staff is learning from that, you know, how much of a head start does that give you? Yeah, yeah, I think Gene makes a great point in terms of seat base versus usage base. I mean that that is a transition to its point. I do think and the reason why I like Microsoft as well is I do think they have taken steps to insulate the themselves to an extent and can afford to take the hit on the software side. What really is concerning and we're talking about like these other names as if they're, they're a monolith but essentially like these horizontal platforms that don't really have an AI offering right. Where they're not deeply embedded within your workflow. I mean we're talking about a Microsoft but. And I know you mentioned Salesforce earlier but and I think that of the, of the people that fit into that particular group they are the largest and probably the most well insulated. But I do question their offering. I mean I think that's a, that's a tough situation. Like they are really going to have to show how one AI is creating internal cost constraint, cost reductions within their own operating leverage and then what is the real offering there? Because aside from a CRM, I don't know how deeply embedded that really is into a workflow flow and I'm not sure how real heavy the switching costs are are there.
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Meanwhile, HIMS and her shares sharply lower after hours. The FDA saying it intends to take action against non FDA approved compounded GLP1 drugs specifically mentioning hims. The FDA will also take steps to combat deceptive direct to consumer advertising for the drugs. Novo probably doesn't have much by the way of after hours trading, especially on a Friday evening. But we did see, see those shares earlier this week really get hurt on this notion that there's going to be a copycat oral on the market out there because they saw last year the impact on revenues. They had to take their revenue guidance down a couple of times. At least last year on the back of compounded injections.
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Yeah. And Novo seems to be getting it from every angle, whether it's falling behind or just chosen as the second best to Lilly. But hims, her stock has been just getting butchered in the marketplace. And when you take that out of the framework and you look towards the patent cliff that's coming up, the one with the least amount of exposure, negative exposure to the patent cliff is actually Nova. It's less than 20% of revenues except semaglutide, which is. But it's. Exactly. But as a whole, lilly has above 30% and Merck has closer to 40%.
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50%, by the way, that's an after hours chart for Nova. So we are seeing a pop here, 5.6%. We'll continue to monitor the story so you get some more. Coming up, Sneaky staples, the group hitting a fresh record high amid this week's wild trading. Should the pantry be in your portfolio? Plus, fans betting on way more than who will win the trophy at Sunday super bowl game. How the rapid rise in prediction markets is changing the game for the gambling industry. Don't go anywhere. Fast Money's back into.
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This is Fast Money with Melissa Lee right here on cnbc.
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Oh, could this vintage store be any cuter? Right. And the best part, they accept Discover. Except Discover in a little place like this? I don't think so, Jennifer.
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Oh yeah, huh?
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Discover's accepted where I like to shop.
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Come on, baby, get with the times.
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Right.
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So we shouldn't get the parachute pants.
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These are making a comeback, I think.
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I'll be honest, the flows that we've seen through the desk the last couple of days have been hedging and fading. The move in Staples doesn't mean it's going to work, but that's the flows we've seen. I think the story here, frankly is if you're selling winners to buy losers or you're selling growth to buy value, you are buying a lot of Staples. So I do think a lot of this rotation we're seeing is actually benefited Staples in a way. And then secondly, the tax refund story is also potentially incrementally beneficial for Staples as well. So you do have sort of a growth story that you can tell alongside the positioning. But a lot of the macro folks we talked to were kind of frustrated because Staples is not typically a cyclical, but it's getting kind of rallied with them.
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Right.
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So it's, it's a convenient thing to fade. I mean, I think the rotation probably has its days numbered only because particularly in Staples, you're not going to get the same type of market margin expansion that you will. I mean, we're not even talking about high flying growth, but just tech or information. I mean, like you're talking about probably the most benign or one of the most benign pockets of the market. I think that really speaks to the story of investor frustration and anxiety around the volatility that we're experiencing right now. Let's not forget that. You know, we haven't talked about it, but the metals trade, both precious and industrial metals, have. There's been no place to hide. Right. And even if you Want to talk about health care? You look at the moves that are in like your lilies and your novosis, where do you go to kind of try to batten down the hatch and preserve capital? And I think that's the engine that staples are. But in terms of that rotation continuing to have legs and new money continuing to flow in, I just don't think, I think there's a limit to that when you look at it on chart. And if you pull back for the last couple of years and maybe we could put that up again, pull back to 2023. That was the real move in Staples. You had mid year 2023, Ratchet up aggressively to 2024 and then for two years it played around with $5 increments up and down. So it's really done nothing for the last two years. So I think it can go higher. And when you look at a yield versus having a 40% drawdown, you don't buy it for yield because the yield could be wiped out in one day. But if you want to sleep at night, maybe you put whatever percentage you had in your crypto, whatever percentage you had in your gold, and you're still up big in both of those, by the way. Maybe not crypto anymore, but you're still up in the metals trade. Take that, put some into staples and you sleep a little bit better at night.
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There's a lot more fast money to come. Here's what's coming up next.
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Gearing up for the big game and what could be a major moment for the prediction markets. Just how much is on the line? How high are the stakes for all the players? Plus bitcoin bouncing back the crypto, testing the 60k mark, but seeming to find its footing. Is the token ready to rally from here or is there more damage to be done next? You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this. This is the exclusive table with the view. This is your name on the list. This is three times points on dining with Chase Sapphire reserve and a $300 dining credit chase Sapphire Reserve. Now even more rewarding. Learn more@chase.com Sapphire Reserve cards issued by JP Morgan Chase bank and a member FDIC subject to credit approval.
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The Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen and keep striving. Visit Strayer Edu Jack Welchmba to learn more Strayer University is certified to operate in Virginia by Chev and its many campuses, including at 212115 straight north in Arlington, Virginia. What do the steam engine, electricity and AI have in common? These technologies not only change how we work, they can transform entire economies. I'm Stephanie Wong, host of where the Internet Lives, a podcast from Google and Latitude Studios about the unseen world of data centers. Explore how data centers are unlocking growth in every sector of the economy. From agriculture to medicine to manufacturing, data centers are powering a new era of AI innovation. Listen to where the Internet lives wherever you get your podcasts. Welcome back to Fast Money, A big rally to finish off a wild week. The dow closing above 50,000 for the first time 631 days after it first hit the 40k mark. The S and P climbing back into the green for the year. IT and the NASDAQ both gaining more than 2% but both down for the week. Carlyle Group seeing a nice bounce after beating earnings expectations this morning. The rally coming amid a rough start to the year for private equity stocks, especially those exposed to software. Shares of Jennifer Garner backed organic nutrition company Once Upon a Farm soaring nearly 17% from its IPO price in its NYSE debut. Meanwhile, for the few that don't know, the country's largest sporting event is taking place this weekend. Millions of viewers are expected to watch the Seattle Seahawks take on the New England Patriots in San Francisco for Super Bowl 60. Many are turning to the prediction markets to place bets on way more than just who they think will win it all. For more, let's bring in CNBC's Contessa Brewer. Contessa, yeah, Melissa, the party here on Radio Row at the super bowl is starting to wrap up at the party for prediction markets is really heating up. Big news from DraftKings this afternoon, which announced a deal with Crypto.com to broaden the markets it offers in predictions, including the first players specific sports event contracts for the NFL and the NBA. I went on they're live right now. So now you've got DraftKings and FanDuel Fanatics joining the likes of Robinhood and and Kalshee and polymarket getting ready for the big game. Kalsi, for instance, has seen a lot of dramatic growth here. Super bowl trading volumes are up almost 1400% year over year in the weeks leading up to the Super Bowl. That's according to data from Piper Sandler. Look, investors are a bit skeptical here. Shares of DraftKings and FanDuel parent Flutter are off like 40, 50% over the last six months. But the fanatics head of gaming and betting told me predictions aren't cannibalizing the sportsbook.
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A vast majority of the demand for prediction markets in aggregate is coming from states that don't have state regulated sports betting. For us we only operate in states that don't have legalized sports betting. And so for us that's our entire business.
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Industry analysts also say other groups with limited access to legal sports books like players who are 18 to 20 years old or for instance those who are professional gamblers known as Sharps because they're limited in how much they can bet on sportsbooks. Look, we're watching Kalshee odds of the big game right now. Now the money's coming in favoring Seattle by 2 to 1 right now. But the sportsbooks have said in terms of the number of bets they're getting, it looks like more bets are coming in on the Patriots. MELISSA Contessa, I didn't know what Sharps was until this morning and I read the Journal article. I think it was on professional gamblers. The fact that they're moving into the predictions markets because they don't, they're not sort of blacklisted, exhausted or or constrained in any way it does that portend them actually migrating and bringing their business elsewhere So a lost part of revenue for some of these gambling sites? Well I think what it means is maybe they're moving off of those offshore platforms like Bovada or My Bookie where they have gone to play if they're not limited by the predictions platforms. And let's face it here, you're not betting against the sportsbook, you're betting against another party. And there are market makers just like there are when you're trading stocks. What does that mean for the other people? There are industry critics who say look on the other side of that bet. You've got a bunch of rubes, the non Sharps who are taking that action against people who know far better what they're doing. Yeah, Contessa, thanks. Enjoy the Super Bowl. Contessa Brewer and as a reminder, CNBC and Kalshee have a commercial relationship that includes customer acquisition and a minority investment. You can watch the super bowl by the way on NBC on Sunday kickoff slated for 6:30pm Eastern Time. I know Tim Seymour will be watching. We found him. He took a choo choo train. He made it to his destination. And you are in some of the gambling sites. What do you make of the declines when they're Saying, you know what, we're not feeling the impact of predictions markets.
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Well, there's no question that I think there's, there's absolutely an impact to the DraftKings story. Hold on one second. I think your buddy guy, Adam, he was trying to call me in the middle of my zoom here.
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Guy, stop calling tim. He's on TV. All right, now.
- [30:47]
A
So the DraftKings, there's, there's absolute correlation to the stock price. And when we've started to see the betting markets begin to pick up some steam, what's fascinating is that you're seeing the traditional casinos begin to bounce off of in some cases even some uptrends but, but some volatility and actually start to show that they are cheap relative to long term ebitda. And I still think the sports books in Vegas are the place most people want to be betting and where they want to go. I've been long draftings at different times over the years. I have not been long for the last six months the valuation is still very different and I still think you're betting on the whole concept of, of where you are betting on this addressable market growth. Meanwhile, as I talk about a lot, Las Vegas Sands, Marina, Bay Sands, some of the properties in Southeast Asia are booming. But I think that the digital business and the online gambling businesses that, that essentially Las Vegas has built are undervalued. And again, these stocks when Las Vegas have had nice bounces over the last couple of weeks and I think are in uptrends.
- [31:46]
B
By the way, Guy texted me that he's sorry that he called you by accident. That was what happened there. All right, coming up, bitcoin rebounding today, but still down more than 15% this week. As today's move, the beginnings of a real turnaround. We'll get some answers next.
- [32:05]
A
Missed a moment of fast. Catch us anytime on the go follow the Fast Money podcast. We're back right after this.
- [32:18]
B
Welcome back to Fast money. Bitcoin, Etherium, Solana all regaining ground, jumping double digits to end the week. Crypto proxy strategy surging more than 26% but still losing almost 10% on the week. The CEO was on CNBC earlier today talking about bitcoin's volatility.
- [32:36]
A
First of all, I don't think bitcoin will go down to $10,000. I think it's extremely unlikely. What's happening with bitcoin right now is the government's fully behind it. We have a bitcoin president, we have a bitcoin head of the sec, head of the Treasury Bitcoin head of the cftc. So the regulatory issues that I think five years ago, people worried about bitcoin are gone.
- [32:58]
B
For more on where the crypto trade is going, CoinDesk's David Laval joins us now. He's the president of Indices and Data. David, great to have you with us.
- [33:07]
A
Hey, Melissa, great to be here. How are you doing?
- [33:09]
B
So Fong Li outlined all the positive regulatory aspects, the tailwind to bitcoin. And at the same time it also has a lot of stronger holders, in theory, institutions. It's got lots of et cetera, ETFs now. So the, the holders have brought in and at the same time we're seeing, you know, a garden variety pullback. I mean, the same sort of volatility that we've seen in years past without these positive factors. Why is that?
- [33:33]
A
Right. Well, look, I think there is some of a possibility of, you know, buy the rumor and, you know, sell the news a little bit. We've had a tremendous windfall in everything that we've seen in the regulatory front, but we haven't gotten everything that we had anticipated with the Trump administration. Come in. Yes, we have a positive leader of the sec, positive cftc, a number of different, you know, aspects of regulatory clarity, but we don't have the legislative clarity that we would have hoped for at this point in time. And so look, there's uncertainty in the market. The market doesn't like uncertainty. And so we've seen a little bit of a downdraft. No one's going to argue that bitcoin isn't and crypto is not, you know, of all the last set class. But we saw a downdraft in the early part of the week, but we saw a pretty significant rebound here. In fact, in the last five minutes, you know, I looked Bitcoin was up 10 and a half percent and now it was about 11.6% right before I came on. So things are moving around quite a bit. David, when you look at it, I always think be careful what you wish for. So we've expanded the holder base. We have a bunch of institutions that are capable of buying the ETFs now, but also having a portfolio manager take a look at his, at his pad and see something's down 3, 4, 5, 30%. He sells it. So you have people that you, the original holder base were the hodlers. You don't have a hodler in an institutional holder base. So that's my question. Do you think we have a different class of holder that's affected Maybe the diamond hands that we used to see. Well, what I would say is that obviously the ETF coming online was a massive opportunity to open up and democratize kind of a, you know, broad new user base in the form of advised marketing institutions who weren't interested in, you know, ensuring they were handling their own wallets or dealing with their own, you know, custody. But the reality is that we're so early in the adoption of the advised market in the institutions and kind of moving into the ETFs and in this downdraft, we actually haven't seen those that are holding the ETFs actually unwind positions because we've seen that the shares outstanding are maintaining, you know, a strong, strong hold. So I think those kind of hodlers are, you know, those that are holding Bitcoin are actually hanging out in the ETF now and we're seeing others that are unwinding their positions. But I think that we haven't even really seen the adoption that we anticipate to see in the advised market and with institutions. The ETF hasn't even really been made available broadly in all the wealth management platforms. And so I think we're going to see a next leg of adoption as model portfolios incorporate Bitcoin into them. And we see firms like Morgan Stanley and other very large global institutions really taking significant leg forward in adopting ETFs.
- [36:18]
B
And there's another, another dynamic that's sort of different this time around. David, I hate that expression. Is the digital asset treasury companies that. Is there a level of price level at which you're worried that some of these digital asset treasury companies, whether they hold Ethereum or Bitcoin, that they will be forced to sell, that there will be that pressure and that will then in turn put pressure on the entire crypto space.
- [36:41]
A
I don't think I would put a price target on that that would result in for selling. What I would say is that we're, you know, amidst the very beginning of what I would consider to be a 25 year, you know, change in everything kind of, you know, going on chain. And so there's a little bit of uncertainty in the market right now. We don't have perfect regulatory clarity, we don't have perfect legislative clarity. But everybody that's crypto institutions and that's traditional finance institutions figuring out exactly how this kind of tokenization trend is going to happen and how we're going to find a path forward to getting everything on chain. I think we're in the very early stages of it and I think it's going to be an incredible opportunity to watch this, this change happen.
- [37:21]
B
David, thanks for your time. Appreciate it. David Laval of Coindesk, thanks for having me. Bonwin, what did you make of the pullback here?
- [37:29]
A
I mean this isn't the first time we've seen it. I mean, I think if you're going to be in this space, you've just got to understand that this is not the first 40 or 50% drawdown that we've had. This is kind of a run of the mill situation. I think when you see high beta tech, when you see meme stocks, when you see crypto, when you see silver and gold, clearly these are like beta trades that people are chasing. And bitcoin just, you just have to understand that it is no longer a store of value hedge. It is not, it is a beta related asset. And, and that is not going to change now with the, with more legislative regulatory framework. Clearly you can kind of dull some of that. But to Steve's point earlier, when you now can trade in an ETF and you no longer have to access a crypto wallet, it is going to lead to more volatility because people that perhaps are trading it for a recent trend and don't have the same level of conviction are able to get in and out. That is not going to change. And so, so I don't think that for those that are like bitcoin believers, this recent price action should change anything for you. Look, I think at least from the institutional side, I think the question you asked was the right one, which is if there is a trigger level here, I do think for an institutional trader you can price that as a non zero probability. And for that reason I do think it's kind of made that institutional bid for crypto just a little bit weaker as you get down towards these levels. It doesn't mean it can't work, but I do think that that was the right question to ask. You know, when you look at October peak, the market cap of total crypto was about 5 trillion. And when you look at Bitcoin, it's about 60% of that. Everything is being cut in half now. So when you look both sides of it, people don't want to jump back into it that readily, but I think we've hit a near term bottom in crypto right now.
- [39:19]
B
All right, coming up, stopped in its track. Shares of Stellantis having one of their worst days ever after an eye popping $28 billion charge. What it means for it and other automakers and who is Best positioned in the space. More fast money right after this. Welcome back to Fast Money. Stellantis shares tanking after the Automaker announced a $26 billion charge related to restructuring and reining in of its electric vehicle plans. The company saying it overestimated the speed of EV adoption. Solantis also saying it will continue as one company, not sell brands or split up the business and will cancel its dividend this year. It was the stock's worst day since 2008. There was a lot of bad stuff that I just listed in terms of pressures on the stock.
- [40:07]
A
Right. That you ripped through there. You know, this is the last of the, of the three car companies that we've heard taking these huge write downs and charges and the market was pushed to go to an EV direction that the, that the customers and consumers were not buying yet. So if you look at very micro, the Jeep Grand Wagoneer, they're reducing the price of that car $25,000. So all of the stuff that they padded in that car because of inflation and EV and electronics is coming off the table. People want what they want. They want Jeeps, they want ICE cars. Give them what they want and then prepare on a smaller level where we're going to be 10 years out. But don't force it down consumers throats and more importantly down the automakers throats. Let them make money.
- [40:56]
B
Yeah. The staggering thing about this charge is that it's bigger than the charge that Ford or GM took. So it's larger. And they are also at the same time suspending the dividend. There's a lot of other things that they're doing that the other ones are not. We've seen the performance. We've seen the disparity in the performance for sure.
- [41:12]
A
Well, I think, you know, Steve made the point earlier. You know, when a company announces bad news and the stock still goes down, you know, that's kind of troubling it sounds like for what you've described and I haven't, haven't read it specifically but they tried to kitchen sink some of this stuff.
- [41:22]
B
Yeah.
- [41:23]
A
Yet the stock still traded off. So that definitely makes you cautious on the outlook for that, that kind of group at this point.
- [41:28]
B
We got an update on the story that we brought you earlier this hour. Hims in hers responding to the FDA action. In a statement to cnbc, the company saying Hims and hers has always operated with a deep commitment to the safety and best interests of consumers and in compliance with applicable law. We have a long history of successfully working with regulators and look forward to continuing to engage with the FDA to ensure safe access to affordable health care. We still see the stock down by about 13%. Novo shares were up at last check. Coming up survey says more than half of respondents to Investopedia's latest survey say precious metals are in a bubble. A deep dive into their biggest market worries. Next, more fast money into. Welcome back to Fast Money. Even with the recent tech sell off and broad market volatility, individual investors are still feeling cautiously optimistic, according to Investor PD's latest sentiment survey. Here with the findings as Investopedia editor in chief and People Inc. So chief Business editor Caleb Silver. Caleb, good to see you as always. We always like getting these readings. When was this in the field?
- [42:37]
A
This was in the field from Saturday until Tuesday. So it went through some of this volatility. I held it there because I knew there was a lot of unease and the market's moving so quickly, so many headlines. But I think if I did this two weeks ago or if I did this a week from now, we'd probably get the same result. Individual investors, bold, unbowed. They are not afraid and they want to keep investing.
- [42:55]
B
But they do see bubbles. Bubbles? Where do they see bubbles?
- [42:57]
A
Everywhere. Bubbles in AI stocks, bubbles in the big tech stocks, bubbles in gold for the first time. Where do they been waiting for? Gold has been one of the best performing assets of the last five years, but that crept into the top five, which we found interesting. Yet they're willing to continue invest, especially in stocks, especially in stock ETFs.
- [43:13]
B
So also stocks or they want to keep going even though they say more than, well, more than half.
- [43:18]
A
Absolutely. And if you look inside their portfolios and we ask them what are your top 10 now and what would you buy and hold for the next 10 years? Same group of stocks, big stocks, big mega cap tech stocks. And now we also asked them very specifically in the next 11 months this year, what's going to perform better? Nasdaq 100 semis gold crypto, Nasdaq 100 semiconductor stocks. They're sticking with the home cooking.
- [43:40]
B
Yeah. We showed the word bubble. So Nvidia was the biggest, which is not a surprise there. So there's that notion of picks and shovels over software. Did you capture any trepidation about the software software trade that we saw in the markets?
- [43:52]
A
Yeah. We asked them very specifically, which sectors do you think are the most vulnerable? They still stuck with their favorite stock. Software stocks are among their favorites. Semi stocks are among their favorites. So not veering from the plan. And the plan has done very well by them even though we've had this big sell off really since October. So I always feel as if they're always a little bit shaded to the cautiously optimistic. What for you stuck out in this versus others that we could take as you do this day in and day out. Quite frankly this is one of my favorite spots that we do. So what. What can we glean from this? That what's your knee jerk reaction to it? Two things. Geopolitical uncertainty. Top of their concerns. It's been tariffs, it's been inflation, it's been fed independence. Geopolitical uncertainty far and above their biggest concern right now just because we don't know what's going on. And also the fact that they do feel bubble bubbles in gold and other areas that were safe haven assets because of the rise in those prices yet at the same time unwilling to change their investing patterns. Individual investors hard to break the habits.
- [44:48]
B
Where would you put an extra 10k? That is my favorite question. What I notice here, pay down debt was that always in the.
- [44:54]
A
It was always in the choices but the fact that it's crept up is also interesting. You mentioned what else is interesting. The fact that you have this balance of people who are aggressive let's buy individual stocks and those that say if you gave me ten grand I'd cover myself right now, I'd pay down my debt.
- [45:06]
B
What do you think that says that.
- [45:08]
A
The economy is not as good as the headline numbers tell us and not everyone's feeling it equally. Those that have been invested a long time in own assets doing great. Other people are thinking this might not last very long. I'm going to make sure I am covered.
- [45:19]
B
Caleb, it is always great to see you. Thank you. Caleb Silver Investopedia Editor in Chief People Inc. What is your title?
- [45:25]
A
Chief Business Editor.
- [45:26]
B
Chief Business editor. Very fancy title there. Up next, final trades. By the way, Fast Money will be on hiatus the next two weeks as CNBC airs the Winter Olympic Games during that hour. But don't worry if you need your fast fix the traders will join Mike and me. Mike Santoli that is on closing bell overtime for all your post market analysis. Time now for the final trade. Is this right? We're going to. Tim. Tim.
- [46:01]
A
Yeah, I'm here. I promise you I'm here. You GM is here too and I think unlike Stellantis this is a story where there is free cash flow even after these markdowns still trade at six and a half times rerating from a cancellation of the EV business. All right Stu, we came into the year liking domestically facing cyclicals. So I'll just stay with the bank straight work this week and hopefully continue on. Well, I'm going with waste management. I mean in a week where all the exciting high flyers experience all types of volatility, I want to something that's steady compounder. Go Team usa.
- [46:32]
B
Palantir thanks for watching. Fast Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer this is the.
- [47:11]
A
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