← CNBC's "Fast Money"
CNBC's "Fast Money"
Netflix Bucks The Trend… And Trump Takes Aim At Health Care Prices 4/15/25
00:43:42
Shares of Netflix bucking today’s market malaise, but will the stock’s pop continue after it reports earnings on Thursday? Plus President Trump signing executive orders to rein in health care costs. What it means for the pharma industry and drug prices. Fast Money Disclaimer
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- [00:00]
Ryan Reynolds
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- [00:54]
Phil LaBeau
Of $45 for 3 month plan equivalent to $15 per month required intro rate first 3 months only, then full price plan options available, taxes and fees, extra terms@mint mobile.com.
- [01:05]
Melissa Lee
Live in the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Teflon to tariffs. Shares of Netflix surging ahead of results this week with analysts touting the subscription and ad model while also calling the streamer a defensive name in this volatile market. Can you still chill in this one? We'll debate that. Plus, big bank bounce back Citi and Bank of America higher in the back of results today showing the consumer has still been spending ahead of the tariff turmoil. How long will it last? We'll go inside the numbers. And later the latest on met his battle with the FTC checking in on UAL after its latest results. And will TIM's Mega Trade MAGA Mega Trade continue to outperform? We will ask. I'm Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Feinerman, Dan Nathan and Guy Adami. We start off with two counter trades on an otherwise lackluster day for the markets. Well, major US Indices finished the day mostly flat. International stocks saw outsized strength today. We'll get more on the meager trade in a moment. But first, Netflix surging nearly 5% today, posting its highest close since late last month. Its stock has so far outperformed the broader market and its streaming peers so far this year. The latest move coming after The Wall Street Journal reported the company aims to double revenue by 2030 and targets a market cap of $1 trillion. That would mean an almost 140% rise in shares. All this, of course, as investors looked at NetFL Q1 earnings report after the bell on Thursday. This will be the first quarter. The company does not break out paid subscriber numbers. It reported just over 300 million at the end of last year. But will those results help boost the stock further? Is it in fact Teflon to tariffs? Guy, what do you.
- [02:42]
Guy Adami
I hate a 5% move in earnings, decent volume day, but I think you got to stay the course. Valuation will be a concern for a lot of people, but it's been a concern for a long time and outside of maybe two or maybe three times over the last decade, they really haven't taken any missteps. So when they tell you going to be a trillion dollar company in the next five years, to a certain extent you got to believe them because they've done everything, almost everything right over that period of time.
- [03:05]
Karen Feinerman
Yeah, I agree with Guy. I mean, it's a lofty goal, right?
- [03:08]
Melissa Lee
Yeah.
- [03:09]
Karen Feinerman
But when you consider, you know, the history of this company, the transformation from the red envelope to then doing their due to streaming, to then doing their own content, to having that really work, to then switching gears and going to the ads, the ad tiers, I mean they have done everything right. And I think that, you know, today I thought, all right, stocks can be up a lot. That was obviously a very bullish article and so I'm going to look to sell some upside calls. And then I thought, well, I would, I'm guessing that this big one trillion dollar goal didn't start with well, this quarter is going to be really bad, but going forward. So I feel like they probably feel like they have some momentum. Whether that's priced in, I don't know. I am long. It is expensive. It is hard for me as a value person to keep this. But they've just continued to dominate and I don't, I don't, I'm trying to think, is there an industry, maybe Tesla, early on in the, in the evolution that was, that was it, there was no one else. I feel like they are so far ahead of everyone else here.
- [04:09]
Dan Nathan
You know, a lot of folks say oops, sorry. A lot of people say it's like recession proof. But if you go back to 2022, you know, there was an earnings recession, there was an economic recession. I think consumers pulled back a little bit. Stocks still up 70% from its all time highs, you know. And so I just think that's interesting. The less clarity. I know you don't like guidance but you know, the idea that this company is not breaking out a very important metric that really did guide the stock and I don't think it was one of those things that if they for the last five years had not been breaking out subs that the stock would have acted too differently when it was down in 22 or when it's been up, you know, seven bag or whatever since then. I will tell you this though. I've never really, other than Elon heard a company guiding to a market cap level. I just. Have you guys heard. I've never heard that. It just seems very odd to me, you know, like suggesting that how do you get there? You know what I mean? Like, like.
- [04:58]
Karen Feinerman
But I would think it's guiding to a revenue level and a profitability level.
- [05:03]
Dan Nathan
Did they give it. But they didn't give us that.
- [05:04]
Karen Feinerman
They did really.
- [05:05]
Dan Nathan
I mean the revenue.
- [05:06]
Melissa Lee
They did but like double revenue.
- [05:08]
Dan Nathan
Yeah, but like what are the margins? Is advertising, you know the ad tier is that. What does the advertising situation look like? X that. I just think it's just a very odd thing because there's a lot of like things that go in to make the sausage and we just don't know what that stuff.
- [05:22]
Melissa Lee
Let's be clear. This is a, this is an annual business. It wasn't for analysts, it wasn't for investors. It was sort of an internal.
- [05:28]
Dan Nathan
Yeah, they knew it was that they.
- [05:29]
Melissa Lee
Were, that they were setting. But Tim, in terms of, you know, this notion of being recession proof, I mean the analysts in the street who've all come out pretty bullish in the past couple, just couple of days even into earnings will say that if you look at past recessions, people spend less money on going out to eat and things like that trips but they will spend on Netflix still. So it is in that respect it could be more recession proof.
- [05:54]
Tim Seymour
Well, I mean it's certainly, it's certainly market volatility proof. I mean it's outperformed the S and P by 10% since April Fool's day when a lot of bad stuff started happening. Disney's underperformed the S and P by 10%. So in terms of performance and how the stock behaves, no question the analyst community is extremely excited about avenue revenue as a percentage of overall revenue. And there's a view on anywhere from 10 to 20% somewhere out in the next few years. If you think that that's part of how they get to a trillion dollar market cap, then this is something that certainly has an enormous amount of cyclicality to it. I just think that their ability to grow on multiple fronts and you know the numbers for the first quarter, they really just need to show that there's not a whole lot of churn after last quarter where the net adds were AM and they also had a price raise. So I think the content slate remains great. I know Guy's a big fan of Adolescence, which is one of its top shows and one of the top five shows of all times. So I mean I don't see why you're getting too far away from this one. And I think you pay more for it.
- [06:56]
Guy Adami
I enjoyed season one a great deal of Adolescence.
- [07:01]
Karen Feinerman
Mel likes Adolescence.
- [07:02]
Melissa Lee
I thought it was an amazing limited series. So there is only one season of that show. Silly me.
- [07:09]
Guy Adami
Real quick though, Tim's point and Karen, I mean it's been, look at what it's done in this period of time. A market uncertainty. I mean this is a stock that's with that market cap. I mean it's one of the mega cap stocks that is basically flirting with its prior all time high made, you know, a couple of months ago. It's hanging in there, I guess like a champ in the wake of a lot of stocks not performing well at all.
- [07:28]
Melissa Lee
Bank of America, it's a defensive choice for investors. Evercore added it to the tactical outperform listing. The 799amonth is the best value for your entertainment dollar out there. Oppenheimer says no tariff exposure, limited consumer risk. There's a lot of, a lot of, a lot of bullishness going into their.
- [07:46]
Karen Feinerman
Right and right, we saw them, they were, they were advertising capacity restricted. Right. And so as they address that, there's a lot to like here.
- [07:56]
Melissa Lee
Let's bring in media trailblazer and CNBC contributor Tom Rogers. Tom served as NBC Cable president, now executive chairman of Orbit Media and Entertainment. Tom, it is always great to see you. Welcome.
- [08:07]
Tom Rogers
Always great to be here, especially to talk about Netflix.
- [08:11]
Melissa Lee
I know you've loved it for a very long time. You've always said that it's Netflix's world and everybody else lives in it. Are we getting too bold up though ahead of the print? I mean, is at least short term a concern?
- [08:22]
Tom Rogers
Well, I don't think this quarter is a concern. Guy likes to throw around the word stud for some reason. Studies to Netflix stay in tough under a downturn and I think it can stay tougher under a downturn than just about any other media stock for good reason, which is that it's only got about 4% of its revenues that relate to advertising and advertising, of course, it's what will get most hit in a recession. And when you look around, even if you're talking about guys with great growth rates like Facebook, who probably had 98% of their revenue from advertising, they're all going to get hit with Netflix near term. That doesn't mean much to their top line, obviously over the next five and a half years. And getting to $1 trillion market cap advertising has to perform very well, but because they are more defensive, they're not going to be digging out of a hole. If the downturn comes relative to what kind of hole I think most other media stocks will probably find themselves in.
- [09:30]
Guy Adami
Tom came up with his own acronym. I like that you've had 24 hours to think about this trillion dollar market cap. I mean, if you were in the seat, how do you get there? Because I'm sure you have some thoughts about that.
- [09:40]
Tom Rogers
Well, I don't really think it's that hard to get there. You probably have to get to about 400 million subs, which is 100 million more than they currently announce, which is 20 million a year. Remember last quarter in the quarter they did just about 20 million you this year though, they're on a trajectory as if they'll get pretty close to 30% margins, EBITDA margins, and getting to 40% EBITDA margins in four and a half years is probably eminently doable. I would say their advertising business is going to have to take off. It's going to have to scale. But Netflix is a scale player and scale begets scale. And they're already getting upwards of 45 to 50% of their new subs coming in on advertising, getting to 25% of their subs by 2030 or 100 million subs, which will give them plenty of advertising scale, gives them the ability to really drive high margin revenue coming off of what is a new revenue stream for them. So you put those variables together and they're probably tripling their bottom line and doubling their top line. And at the kind of multiples that don't have to look quite as extended as their current multiples. You get to a trillion dollars, it's basically doubling what their February high was in terms of their market valuation. The market as a whole over that period of time, if historical trends hold probably up 70%. For Netflix to be up 100% from its high is probably not a huge reach.
- [11:26]
Melissa Lee
Oppenheimer had a note out Tom, saying that in a past, in the past recession, 2008, 2009, people actually increased TV time at home. And that bodes well for Netflix, assuming that is correct, that people will increase TV time, should there be a recession this time around, does that enable other players to gain any share? If the pie is just bigger?
- [11:49]
Tom Rogers
Yes, it does. I'd say the one caveat to the analysis I just laid out is that Netflix engagement has to stay strong. Engagement is what drives pricing power. Engagement is what will drive their advertising revenue. And relative to January when Netflix was about 8 and a half percent of all viewing time, they dropped below 8% in the, in the March numbers. And the real beneficiary of that was YouTube and the free streaming services, the so called fast channels. So, you know, free is going to do very well in any kind of downturn. Netflix has to hold its engagement. That was a little troubling. And if there's one area of trouble that I expect them to address on the earnings call on Thursday, it would.
- [12:35]
Melissa Lee
Be that in a recession scenario. Tom, do any of the streamers get mortally wounded?
- [12:44]
Tom Rogers
Well, I don't think these streaming services per se get mortally wounded, but if you're a Disney, between your advertising revenue and your park revenue, you know you're approaching high 40% of your total revenue. Both of those revenue streams are going to get hit very hard. And you know, Disney is above other streamers below Netflix. It's, it's shown some real growth prospects there. It gets harder to manage streaming growth if the rest of your company is under that kind of duress. And I would expect a player like that. They really have to think about how it cuts back in this, in an environment where almost 50% of its revenue streams get hit.
- [13:30]
Melissa Lee
Tom, it's always great to see you, always great to get your analysis. Thank you.
- [13:34]
Tom Rogers
Thanks for having me.
- [13:36]
Melissa Lee
Tom Rogers. Interestingly enough, UBS just late Monday cut the price record on Disney for those very reasons. The high exposure in terms of parks as well as advertisement and how they are vulnerable to recession here.
- [13:49]
Karen Feinerman
Oh, for Disney.
- [13:50]
Melissa Lee
I thought for Disney. Yeah, yeah, yeah, right.
- [13:53]
Karen Feinerman
I wonder. So in the content race, you know, do any of the ones you talk about being sort of behind and potentially wounded? I don't know if that opens up the idea of content being cheaper for the, for the king of the hill.
- [14:06]
Melissa Lee
Ah, interesting. Tim, what do you think about Disney?
- [14:11]
Tim Seymour
I think it's, it's at $85, it's a pretty interesting area to buy the stock. I think it's, it's not terribly Cheap and, and I acknowledge the, the exposure it has to Disney recession dynamics. But I think the profitability in the streaming business is something that's really extraordinary, at least relative to where it's coming from. So it's been a big underperformer. It's not Netflix, but that stock here, you know, this is 85 is a level, it's a three year low, it's a five year low and it's held at this level more or less.
- [14:40]
Guy Adami
Tim brings up exactly right. I mean the technical levels is 83, at 85 levels been support a couple of times. I thought incorrectly as usual that this can be one of the outperformers of 2025. And it's been in a word, abysmal since, for the last couple of months for a very few different reasons. But you know, you just got to take a flyer here. I think at these levels, just on a technical level, looking for a bounce back to the recent levels, we saw 105 or so.
- [15:05]
Melissa Lee
Meanwhile, another strong day for the international trade. European indices closing well in the green with the Stoxx 600 Footsie and Dax each popping more than a percent. Asian equities also moving modestly higher. Japan's Nikkei gaining nearly a percentage while the Hang Seng and Shanghai composite indices saw fractional gains. This is of course known as the mega trade, which Tim coined. Tim, what do you think of this outperformance today?
- [15:29]
Tim Seymour
Well, first of all, I appreciate the footnote because there's a lot of stuff that doesn't always get footnoted around this desk and I'll take it. But I think if we're making international great again, we're making great companies that were already great recognized, that's what this is. It's, it's not only was there this crowding out and oxygen burned in the room from the Mag 7, but, but if you look at, it was a great day for banks. We're going to talk about banks at some point here but, but European banks were up, you know, four, four and a half percent and they have earnings out right now too that are very impressive for their money center banks with I think valuations that are significantly cheaper and higher dividend yields and maybe a better deregulation tailwind. So if you look at Germany, Germany's making new relative highs to the S and P and I, you know, the EWG is what you buy here in ETF land if you want and obviously the currency is imputed into that, that's pretty impressive. And again, in a world where if you think what the last two weeks have been about, it's been one of the largest export, the second largest export economy in the world, which is Germany, should be maybe underperforming in this environment, but it's not. And I think both the currency dynamics, but more importantly, I think fundamentals with great companies that you're not searching far and wide for even if you're going overseas. In other words, you know, Siemens, you know SAP, you know Daimler, I mean these aren't, you know, these are world class companies that people just kind of forgot about over here. And by the way, foreign investors are going to be a bigger dynamic in moving back more into their markets and that's also part of the currency move.
- [17:01]
Karen Feinerman
So, Tim, congrats on the meage, you know, assignments. It's no fateful eight, which Dan keeps saying I made up, which I didn't. But anyway, question is this, you're a baseball guy. What inning are we in? I know you've been talking about this for a while. Where do you think we are?
- [17:17]
Tim Seymour
Well, you know, much like a Met fan who sees this team in first place, it's, there's no one's won anything right now and I think it's a long season. So I think if you look at 15 years of relative underperformance of the DAX to the S and P, I think you're in the early innings. And I love the sports analogy, Karen and I, you know, it's a shame that you really can't use that same one with the Yankees right now. But I, I think it's a case where the deregulation, tailwinds, the fiscal changes that were historic in Germany six weeks ago, the dynamics in terms of where we really are seeing the rest of the world figure out where they're going to bilaterally have a lot of different deals. I think this is a trade that's early and people are underway.
- [17:57]
Guy Adami
I just like to footnote on April 15, 2025. I've seen Tim's hair look much better than today. He must be using different pomade or something. Tim, maybe you can sort of speak to that because I'm just, it's not working for me today.
- [18:11]
Tim Seymour
Sure, sure, guy. I think there's more important things to be focused on right now than what kind of product I'm using in my hair. But I appreciate the focus and I'm going to check into it.
- [18:21]
Dan Nathan
Hey, Tim, as our chief mega correspondent here, I'm curious. You just mentioned something about.
- [18:27]
Karen Feinerman
I thought you were ray of sunshine.
- [18:28]
Dan Nathan
Well, no, but there's a silver lining thing coming out here. You know, the dollar weakness, how much of the bank index in Europe has to do with that? You know, at one point they were the 70 was up like 35% on the year. So I'm just curious, like is that does it kind of outshine some of the fundamentals there or does it make you less concerned if we continue to have this dollar weakness?
- [18:51]
Tim Seymour
So are you saying that the dollar's weakness is benefiting European banks?
- [18:56]
Dan Nathan
Yeah, to some degree.
- [18:59]
Tim Seymour
Well, at least I think. Right. Look, I think there's something to be said also about investments repatriating, but I think the European bank's performance is really a function of some things that are, that are have changed also more on a relative basis for European banks than they have in the US in terms of deregulation and forget. You may not love what's going on in the sovereign balance sheets across Europe, but these money center banks, their balance sheets are as pristine as those in.
- [19:26]
Melissa Lee
The U.S. all right, coming up, earnings season in full swing and we were watching United Airlines on the move after their latest report. The details and the numbers in the quarter next +Metta antitrust trial begins How Mark Zuckerberg found himself a target of regulators and what it all means for Instagram, WhatsApp and future tech M and A. Don't go anywhere. Fast Money is back into this is.
- [19:48]
Dan Nathan
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Melissa Lee
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Dan Nathan
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Melissa Lee
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- [21:11]
Phil LaBeau
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- [21:29]
Melissa Lee
Welcome back to Fast Money. United Airlines on the move after reporting mixed quarterly results and giving some very interesting guidance. Our Phil LaBeau is live now with the very latest.
- [21:37]
Ryan Reynolds
Phil and Melissa, the reason the stock is moving higher is because United is saying that it will be cutting back its capacity starting in the third quarter. That is welcome news for Wall Street. They definitely wanted to see that. Let's start first off by talking about Q1 results. Better than expected. Earning 91 cents a share, the street was expecting 76 cents with revenue coming in at 13.21 billion, just a smidge below where the street was expecting revenue to be for the quarter. You can call it a miss, but it's really very, very close. And then there's the revenue that they got in the first quarter. Negative 3.9% for domestic, but the international up 5.2%. Premium up 9.2, 7.6% growth for basic economy. As you take a look at shares of United, keep in mind that their Q2 EPS guidance is 325 to 425. I think the street's at 397 heading into the print today. They're going to be cutting capacity by 4% from their original plan. I followed up with United and I said, what was the original plan? And they said, we're not releasing that at this point. So hard to know if they're going back to where they were last year, exactly how much lower that 4% brings them. And again, that starts in the third quarter. And then there's the guidance. Little bit of something in here for everybody. If you believe that the economy, even with the troubles that it's had in the last three or four weeks, is basically going to stay stable. What we see now is what we'll see for the rest of the year. United is sticking with its original guidance of 1150-1350 a share. But the company does say if the US enters into a recession, and by the way, those are United's words, if they enter into a recession, it's $7 to $9 a share. Wide range, Melissa. But no doubt the reason that it's moving higher is because of the capacity cut. Lots to discuss with Scott Kirby, United CEO, tomorrow morning, first on CNBC. We'll be talking with him during SquawkBox, not only about the Q2 guidance, but more importantly, what he sees further out and what he hears back from other CEOs. I think that was the most interesting thing, when we talked with Ed Bastian about the uncertainty he hears from other CEOs. Love to get Scott's take as well because these guys, this is a big part of their business, the corporate bookings and what they're seeing.
- [23:48]
Melissa Lee
I'd love to hear also, Phil, and I don't know if there's any mention in the release so far in terms of if there's less demand for flights to the United States from various parts of the world, if there's any sort of, you know, quote unquote buyer strike when it comes to travel to the.
- [24:03]
Ryan Reynolds
U.S. well, if, if there is, Melissa, if there is, that's not reflected in the capacity plans. The capacity cut of 4%. All domestic. All domestic starting in the third quarter. There's no cutbacks coming on international routes.
- [24:17]
Melissa Lee
Right. Unless the original plan was a cut. We don't know the original plan. Well, there you, Phil. I'm sure you get the answers tomorrow. Philippe, thank you. All right, Tim Seymour, I got to go to you on the airlines.
- [24:32]
Tim Seymour
Well, it's, it's an enormous opportunity to be a long term investor in airlines here after having these stocks. I mean, United was 110, I went down to 53, something like that. Delta was more or less cut in half. Question is, are you a trader or an investor here? I think it's too early to really think it's safe to get back in with airlines for the long term. I think there's probably still a trade here in a world where volume continues to fall slightly, you own airlines. But I thought that that guidance was fascinating in that we've got stable environment guidance, which means that if things change at all, you know, that that guidance is out the window. And I think the cyclicality of that business is something to be concerned about. I think they also though said that they expect to have resilient as a, you know, resilient eps, resilient performance in a difficult market environment. So I like the capacity cutback. I like the efficiency dynamics. I think Delta and United, as has been noted, is, are the best place and I think you can probably trade them both here, but I think you're going to have another chance to buy them lower.
- [25:38]
Karen Feinerman
So I just think the guidance, the bifurcated guidance is fascinating. I think we'll probably see more of it. It's really interesting. I think we're also going to see no guidance and companies will get away with it, which I think is fair.
- [25:52]
Melissa Lee
Right?
- [25:53]
Karen Feinerman
Yeah.
- [25:53]
Melissa Lee
I mean, if you're a company, if I were a company, I'd do that.
- [25:56]
Guy Adami
Well, you see that you can drive it. I mean, stable environment, as Tim said, recessionary environment, that's a huge disparity. But real quick, I mean, we had this conversation last week in terms of the entire round trip United did from last fall when everybody got geeked up and we traded right back down to that 53 level. As Tim just stated. I do think there's some room on the upside here. I think the better play is Delta, but I think United still has some upside from these levels.
- [26:19]
Melissa Lee
Coming up. Bank starting earnings season with a bang. How the group is making money even as dealmaking slows and if it can continue past the first quarter, that is next. You're watching Fast Money LIVE from the NASDAQ markets at in Times Square. Back right after this.
- [26:37]
Ryan Reynolds
Ryan Reynolds here from Mint Mobile with a message for everyone paying big wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a try@mintmobile.com Switch upfront payment.
- [26:59]
Phil LaBeau
Of $45 for 3 month plan equivalent to $15 per month required intro rate first 3 months only, then full price plan options available, taxes and fees extra.
- [27:05]
Melissa Lee
See full terms@mintmobile.com introducing CNBC, the new.
- [27:11]
Dan Nathan
Streaming platform from the number one source in business news. Watch live or on demand. Access it anytime, anywhere.
- [27:19]
Tim Seymour
Start streaming.
- [27:19]
Dan Nathan
Go to cnbc.com stream now.
- [27:25]
Ryan Reynolds
I watch Fast Money every day.
- [27:27]
Tim Seymour
Every person that watches our show can get something out of what markets have done that day and some investment ideas. And you don't have to be a professional.
- [27:35]
Melissa Lee
I learned so much from them and.
- [27:36]
Karen Feinerman
I often act on their suggestions. You have to be nimble, but you don't want to sort of be distracted by whatever to think of.
- [27:43]
Melissa Lee
The moment is being here on the set with a bright light shining and.
- [27:46]
Ryan Reynolds
It'S a different experience.
- [27:47]
Guy Adami
This event was so important, gave us access to our fan base, gave them access to us and let us meet in an environment that's a lot of fun and something a lot of people will never get an opportunity to do.
- [28:01]
Melissa Lee
Join us for the next Fast Money Live event here at the NASDAQ June 5th. Tickets are going fast. Folks are coming from all across the country and around the world. We've even got a Fast Money fan from Australia who's going to come right here to Times Square to join us. So check out the map. 24 states already represented big groups from Florida, Texas, California. We also have fans joining us from Arkansas, Minnesota, Mississippi and Louisiana too. So put your state on the map. You can join us all. Guy, Karen, Tim and Dan for this special event. Ask them your burning questions about the markets or anything else. Tim and Sarah, share a cocktail, take a selfie, meet up with other Fast Money fans. So get your tickets. Click on that QR code right on your screen. Head on over to CNBC events.com fastmoney we loved meeting everybody here. We really did. We had a chance to talk to every single person here at the event. We signed autographs, answered questions.
- [28:52]
Guy Adami
It was a lot of fun, tremendous amount of fun. Australia is. That's insane. I mean, congratulations. We look forward to meeting him or her. 20 something different states. I'm sure it'll be over 30 by the time this is done. It's a, a treat for all of us here.
- [29:04]
Dan Nathan
Fast Money trader cards. I mean, that's not enough to come and do that.
- [29:08]
Melissa Lee
I know. And you can do anything you want with them. Yeah, well, mustaches, all sorts of fun can be had. All right, one more time. Get your tickets. Click on the QR code on your screen. Head on over to CNBC events.com backslash fast money. Okay. Meantime, another check on where stocks ended the day. The Dow falling more than 150 points, the S&P 500 and NASDAQ with small losses. Now we should know today. Elaine Wynne, the former gaming exec and co founder of Wynn Resorts passed away at the age of 82. She owned about 9% of Wynn Resorts. That stock today finishing about 2% higher. This is an interesting one. She was a major shareholder and of course you wonder what happens to those shares? What happens to the makeup of, in terms of, you know.
- [29:50]
Karen Feinerman
Right. Well, the popped in my head. First of all, she was a great lady and an incredible business businesswoman. So pay tribute to that. But it's sort of interesting. Tillman Fertitta is the largest shareholder. I have no idea what's going to happen with the shares, whether they're, you know, gifted to her children or. I have no idea. But it is interesting that it's a block of shares could theoretically become available.
- [30:14]
Melissa Lee
Right, right. We've got breaking news on Nvidia here. Shares are heading sharply lower after hours. Steve Kovacs got the details behind the move. Steve?
- [30:22]
Ryan Reynolds
Hey there, Melissa. Yes, here's down about 3 1/2% right now. This is after a 8K filing Nvidia just filed saying they heard from the US government last week saying they need a license to sell H20 chips to China. H20 chips are the ones that were supposed to kind of skirt around some of the most advanced features and be able to be sold into China. That is not happening now or at least they need a licensing process for it. And now Nvidia says they expect to take, take a five and a half billion dollar charge because of the inventory they have stacked up there. You see shares moving down three and a half percent now. Melissa.
- [30:56]
Melissa Lee
All right, Steve, thank you. Steve Kovacs. There are some giddiness about an exemption, some sort of a carve out, but of course there's still the headwind of this license issue.
- [31:03]
Dan Nathan
Well, it goes back and forth. I mean like yesterday there was news or you know, Monday or anything. You know, by the way, Chinese supposedly have bought $16 billion of these H20s just in Q1. That's equal to what they, they bought all of last year. So again, I think these sides were stockpiling in front of these sorts of things. But I would suspect that this is something that is going to carry on over the course of this year. $5 billion, you know, charge, that's not insignificant.
- [31:28]
Karen Feinerman
Yeah, it's. Sorry to interrupt. There's $10.8 billion of lost market cap on this $5 billion of charge. So I don't know if that's an overreaction or if this is just what they think for the, for the, the shorter term, how big of a charge would be?
- [31:43]
Melissa Lee
Oh, I see. Like whether or not it's just ongoing. Ongoing?
- [31:47]
Guy Adami
Yeah, you know, we bounced from the August low, from that 90 low. That was the good news. The bad news is though, it really hasn't been a game out of its, get out of its own way now since January or so. So it's been trading very poorly in an environment until the last couple of weeks. It's been somewhat favorable by the way. That's all the semis which all traded back down to that prior double top we talked about. So insignificant. Not insignificant. Just one more reason to be somewhat concerned I think about the name.
- [32:14]
Melissa Lee
We should note this move in Nvidia in the after hour session bringing cues down here too. We see a slight down of 0.4% here on it. Tim, what are we looking for tomorrow in terms of the, the impact, the fallout from this, if there is any.
- [32:30]
Tim Seymour
Well again this is us requiring a license. This isn't China pushing back. And you know, the question is if these are not the chips that were being restricted for export, you know, this administration says they're going to try to remove the red tape for corporates. You know, I don't know. I don't know at that headline how long they were waiting before they really felt they needed to make this announcement and do this markdown. I will say for cues and for the markets overall, it's been a nice snapback, but they didn't really break out above that downtrend. That that's from three weeks ago. And if you look at both the S and P and the triple cues or the Nasdaq, you do have a bear cross that's really hit today or yesterday. So for people that think that that's a powerful signal, by the way, for semis, it was massively powerful three weeks ago. So just watch out for that.
- [33:21]
Melissa Lee
Nvidia shares pretty much at after our session lows right now down by about 4% on this news. We'll keep an eye on that for you. Coming up, a big bank, bank bump. Bank of America and Citigroup surging after earnings and taking other money centers along for the ride where the group is going after a batch of solid Q1 reports. That's straight ahead. More Fast MONEY right after this. Welcome back to FAST money. President Trump signing an executive order on drug pricing. Our Angelica Peebles got the details. Angelica?
- [33:53]
Phil LaBeau
Hey, Melissa. White House officials say that this executive order has multiple components. There's a lot in here, but here are some of the highlights. So they're aiming to align the price that Medicare pays for drugs with what hospitals pay to acquire those drugs. So basically trying to prevent hospitals from marking those prices up. It also takes steps to ensure that drugs cost the same no matter where they're administered, whether that's an outpatient clinic or a doctor's office. It goes after broker fee disclosures so that employee benefit brokers must disclose to employer clients if they're getting paid by the PBMs that they're recommending. It also instructs HHS Secretary Kennedy to work with Congress to equalize when pills and biologics like Shots IVs become eligible for Medicare negotiation. Now, this has been one of the industry's main goals since that inflation Reduction act was passed in 2022. Remember, that gives Medicare the ability to negotiate drug prices of small molecules after nine years and large molecules after 13 years. They've been calling it the pill penalty, and that's been their big aim. So this is a win. Of course, only Congress can enact laws, so it's not a guarantee. But having the backing of President Trump is a big win for the industry.
- [34:58]
Melissa Lee
Melissa, does this protect pricing of a drug for a longer period of time than what has been the case for a lot of the negotiations that have taken place.
- [35:09]
Phil LaBeau
So interestingly, the White House officials that we talked to say that they're agnostic to what that final timeline ends up being. So there's a chance that they make both of them nine years instead of 13 years, which is obviously what the industry wants. They want longer timeline. So it's hard to say exactly where this lands. Whether that's an improvement, a longer timeline or a shorter timeline we have to see. But they do want to make sure that any policy change there does not increase Medicare spending. So there will have to be some negotiation in terms of what the industry is willing to give up.
- [35:41]
Melissa Lee
All right, Angelica, thank you. Angelica Peebles, thank you. A lot of puts and takes there, but the industry also faces potential tariffs. So there are a lot of unknowns still ahead for the space, which has been really under pressure.
- [35:54]
Guy Adami
So the first thing I did was look at tenant health care, which is obviously like many things, is not traded well. And I'm like, I wonder if you can get a relief rally in this. And right now you are. So this could be one of those things where the uncertainty to the extent that it can be out, is out now. And maybe there's some certainty around some of these names. Maybe THC at these levels makes sense, especially in earnings at the end of the month.
- [36:14]
Melissa Lee
All right, let's move on to bank stocks higher today. Citigroup and bank of America beating Kuwan estimates on the top of the bottom lines. Both saw double digit increases in profit, higher trading revenue due to the market volatility. Citi CEO Jane Fraser and Bank of America CEO Brian Moynihan both noting their diverse sets of businesses will continue to be strengths despite the future uncertainty, said consumers in the first quarter were spending maybe to get ahead of the tariff uncertainty. Who knows what's going to happen next?
- [36:40]
Karen Feinerman
Yeah, so if I can choose one of them, Citigroup I thought was, I mean, they're both very good. Citigroup I think was a little bit more interesting to me. One of the things that I really liked was Jane Fraser's had this multi year effort to remake, make lines of business clear, get expenses down. And we're starting to really see progress on that. So that was really important and good to see. And they also, they're talking about this continuing, right? They have this 53 efficiency ratio. They're above that now, but they've been whittling away. So that's good, good for future Profitability and buybacks at this level, buybacks are so accretive and so we're going to continue to see that. And they also talked about their role as sort of the banker of the world right around the world. And so volatility was good for them also. They're actually there investors was up. So it was, it was a very good quarter.
- [37:33]
Melissa Lee
Yeah. Tim, you've been talking up Citi for a while.
- [37:37]
Tim Seymour
I'm long Citi, I'm long Bank of America. Citi's my preferred name. And I love what Jane Fraser is doing. And where they beat today was on expenses and then net net interest income. So I think it's interesting, look, banks in terms of whatever snapback we've had in markets have underperformed the market. And I think the market is very concerned. And I think if you have more recession coming, I think people, people haven't really begun to be concerned about credit dynamics. I think Citi's got more exposure on their credit, on their credit cards and in terms of the quality of that versus bank of America. But I look at Citi and I look at again being an investor long term and I, I think, you know, it's frustrating because this stock which has struggled to get through 80 like four times in the last decade, I think is destined to break out and break out significantly. We're going to have to get through a lot of uncertainty economy, but I think the leadership there is the best it's been in a long time and now it's in place for a while.
- [38:31]
Melissa Lee
The economy has not slowed yet all through the first quarter, no slowdown at all, says Brian Moynihan.
- [38:39]
Guy Adami
Well, yeah, okay, that's fine. And you know, the Yankees are playing great baseball in my opinion, but I don't, I don't think that's the case. I will say just real quick on City at 62% of book value, you know, when it gets down to these levels, that becomes interesting. I'm with Tim and Karen on this one.
- [38:56]
Melissa Lee
Coming up, matter on the stand as the tech giants antitrust trial begins. How Mark Zuckerberg found himself a target of regulators and what it all means for Instagram, WhatsApp and future tech M and A. We'll dig in when fast Money returns. Welcome back to Fast Money. Medicare is ending the day lower as CEO Mark Zuckerberg took the standard in the second day of the FTC's antitrust trial against the company. CNBC's Eamon Jabbers has got the details from the day. Eamon.
- [39:29]
Eamon Jabbers
Hey there, Melissa One of the ironies of this trial is that we learned today that Meta actually considered spinning off Instagram due to antitrust pressures way back in 2018. But what's really striking about all of this is the degree to which it's taking place, really on two levels at the same time. Inside the courtroom, this took place on the Merritt as attorneys made their arguments and the judge took all the evidence in. But outside the courtroom, this is very much a political power play by President Trump who is letting Zuckerberg twist in the wind here, even though he has the power to stop this trial at any moment. Really, that power play comes despite Mark Zuckerberg's attempts to make himself and his company more MAGA friendly in recent months. But take a look at this social media post yesterday by Mike Davis, a MAGA attorney who SEMAFOR reports was part of a White House meeting with President Trump last week. It really gives you the flavor of the MAGA objections here. Davis wrote, mark Zuckerberg spent $400 million to chase Trump out of office back in 2020. Zuckerberg thought he could spend $1 million after the 2024 election to buy antitrust amnesty. Looking forward to Zuckerberg's public testimony. Now that message, Melissa, shows that although this case is formally titled FTC vs. Meta, it could just as well be called MAGA vs. Meta. And just a couple of minutes ago, Melissa, I should point out the Wall Street Journal just popped a story suggesting that Zuckerberg and the folks over at Meta offered to settle this case to the ftc. No comment from the FTC on this. The Meta folks did give us a statement. They say we haven't been shy about explaining why it doesn't make sense for the FTC to bring a case to trial that requires it to prove something every 17 year old in America knows is absurd, that Instagram doesn't compete with TikTok. We are prepared to win at trial. So some settlement discussions before trial today. Everyone says they're here to win it.
- [41:18]
Melissa Lee
Melissa Eamonn thank you, Eamon Jabers. And of course this all comes after Dina Powell was just appointed to the board, who is a Republican, you know, administration person back in the Bush days.
- [41:29]
Karen Feinerman
And the Trump days, the first year of the Trump administration and her husband is a senator from Pennsylvania. So that is sort of an interesting other play. And then there's what's happening in the court and you know, it's if they end up getting to a space where an ultimate decision that Instagram should be spun, I think that's going to be a pretty big negative, I think. I know some people think it's a positive.
- [41:55]
Dan Nathan
I don't think it's not. The merits of the case are so bad if you think about it, if you just look at it. And again, this comes down to to political maga versus Facebook and they got a lot of beef going back 10 years. But I think this is something that Trump's going to do to every single one of these major tech CEOs that lined up in front of them.
- [42:11]
Melissa Lee
So it wasn't enough. Coming off the retail investor read through Betterment CEO Sarah Levy joins us next with more on how individual investors are navigating the volatile market and why customers are still sticking to their investment goals. More fast into welcome back to FAST Money. Another check on shares of Nvidia. This after the company said it expects a 5 and a half billion dollar charge in Q1 due to exporting its H20 graphics chips to China. The company was told last week it would need a license to export to China and a handful of other countries there. The concern is that some of these 20 chips will get shipped to China and get put into a supercomputer. So there's a national security element to this. The company was notified April 9th disclosing it tonight in its 8K. Dan, what do you make of this.
- [42:59]
Dan Nathan
Tumble five and half export bands or export bans. And I don't think there should be any, you know, sort of ends around here. This is a very important sort of situation here. We do not want to find our best technology in their supercomputers are going to power a lot of their military might.
- [43:12]
Melissa Lee
We should note that chairs of other chip makers. So take a look at amd, Broadcom, Taiwan Semi. They're also sharply lower in the after hours on the back of this news. Meantime, recent volatility might be causing market whiplash, but individual investors appear to be weathering the storm, sticking to their long term goals. For more betterment, CEO Sara Levy joins us here on set. The company offers robo investing solutions for individual and retirement accounts. Sarah, welcome.
- [43:35]
Sarah Levy
Thanks for having me.
- [43:36]
Melissa Lee
Are you surprised at all that investors are sticking staying the course?
- [43:39]
Sarah Levy
So I'm not surprised from our investors because we represent a specific subset, I think of the retail market. So we're an automated money manager and people come to us specifically for globally diversified portfolios, for tax saving, tools for advice and guidance and sort of calm in the storm. So when you think about those principles that we stand for, we attract a long term investor.
- [44:03]
Melissa Lee
Are you seeing any changes within an allocation to equities, for instance, different kinds of equities. Now with the volatility here, here, we're.
- [44:09]
Sarah Levy
Definitely seeing, I think a mixed shift between cash and taxable investing.
- [44:14]
Dan Nathan
Right.
- [44:15]
Sarah Levy
There are folks sort of seeking a port in the storm and putting more money in cash but less, less so fidgeting with their portfolios.
- [44:23]
Karen Feinerman
So you haven't seen any buying the dips or panics really?
- [44:27]
Sarah Levy
We haven't really seen panics, I think in large part because when you think about our investors, we have sort of three subsets. We've got the retirement investor investors, long term, set it and forget it, stay the course. We've got taxable investors who are benefiting from tax loss harvesting, which is a big part of the proposition. And then we've got cash investors and you know, those folks are staying the course.
- [44:46]
Guy Adami
You also have a retirement readiness report that I think helps people feel a little more at ease with all the craziness that's going on. Can you speak to that?
- [44:55]
Sarah Levy
I mean our retirement readiness is sort of a good news, bad news story. I think this generation feels a little bit it see that they're not ready for what's to come. And so our advice there is about set it and forget it, right? Be invested, benefit from the power of compounding and really take advantage of what the government has to offer in terms of 401k plans, IRA plans, you know, places to, to be tax advantaged. And so we would just say to you, max out on all of that as much as possible and that's how you plan for the long term.
- [45:25]
Melissa Lee
Good advice, Sara, thank you. Hope you come back again. Sarah Levy of Betterment. Up next, final trades. There is still a limited number of tickets left for our Fast Money live event here at the NASDAQ June 5th. So get in on the action. Click on that QR code on your screen. Head on over to CNBC events.com/back fast money. So do it. Final trade time. Tim.
- [45:50]
Tim Seymour
Yeah, and fly Delta to Fast Money. I think Delta is a great, there's a great level to get into the stock.
- [45:56]
Melissa Lee
Karen?
- [45:57]
Tim Seymour
Yes.
- [45:57]
Karen Feinerman
Jane Fraser. I like what she's doing at Citibank. Even though it's up a lot today. Still be long.
- [46:03]
Melissa Lee
Dan.
- [46:03]
Dan Nathan
Yeah. Nvidia. Before this news, I'd be a seller on rallies. I wouldn't press it here, but sell rallies.
- [46:08]
Tim Seymour
Wow.
- [46:08]
Melissa Lee
Down 6%.
- [46:09]
Guy Adami
Guy tenant health care. I think Melissa can bounce on that. Wait for it. EO that we heard about earlier.
- [46:15]
Melissa Lee
Mad Money starts now.
- [46:18]
Ryan Reynolds
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- [46:20]
Melissa Lee
Participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal.
- [46:26]
Ryan Reynolds
Their parent company or affiliates, and may.
- [46:28]
Melissa Lee
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.
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Ryan Reynolds
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Melissa Lee
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.
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Ryan Reynolds
Please visit cnbc.com fastmoneydisclaimer Introducing CNBC, the.
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Dan Nathan
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Melissa Lee
Start Streaming.
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Dan Nathan
Go to cnbc.com streamnow.