← CNBC's "Fast Money"
CNBC's "Fast Money"
Netflix Swings After Reporting… And Trump Takes Aim At Powell 4/17/25
00:42:57
Netflix on the move after beating expectations in its quarterly results. What we’re hearing on the company conference call, and how Netflix is faring in the streaming wars. Plus, Trump turning up the heat on the Fed. We break down what the Powell pressure means for markets, and get fresh insights from Morgan Stanley’s Katerina Simonetti. All that, and the big moves in pharma and healthcare as Eli Lilly and UnitedHealth head in very different directions. Fast Money Disclaimer
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- [00:00]
Melissa Lee
Say you've always wanted to take a spontaneous trip to the Caribbean. Here's the thing, if you get smart with your money, you can do things like that. With Empower, you can start making the most out of your money so you can get out and live a little. Isn't that why we work so hard to have some fun with our money, like treating yourself to something special or spontaneously doing something extra for a loved one? So use Empower and get good at money so you can be a little bad. Join their 19 million customers today@empower.com not an empowered client, paid or sponsored.
- [00:32]
Steve Grasso
Don't just ride the index. Seek to outperform it with Felc, the Fidelity Enhanced Large CAP Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other ETF. Discover FELC, the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus and offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail in index as compared with passive ETFs. Fidelity Brokerage Services LLC Member NYSE SIPC.
- [01:33]
Tim Seymour
Live from the NASDAQ markets in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. A big beat for Netflix. The streaming giant surging after hours and continuing to massively outperform all its traditional media peers will go inside the numbers and the conference call coming up and Trump versus Powell the president reportedly has been discussing ousting the Fed chief as the central banker holding holds ready states rates steady. Excuse me. We'll dig in on the implications for the Fed and the rest of the market. And Eli Lilly soars on new oral weight loss drug results. UnitedHealth post its worst day since 1998 after its latest earnings report and dollar tree closes at its highs of the year. What's got the discount store in the premium section today. Oh, I'm Melissa Lee coming to you live the studio Be at the Nasdaq on the desk tonight. Tim Seymour, Steve Grasso, Dan Nathan and Guy Adami. We kick things off with the blockbuster numbers coming out of Netflix's latest earnings report. The streaming giant reporting a top and bot line beat, but for the first time not reporting subscriber numbers. The conference call is underway. Julia Borson is live with the very latest. Julia that's right, Melissa. A top and bottom line beat driven by a far stronger than expected operating margin. The company also guiding to a very strong Q2. Now on the earnings call just now co CEO Ted Sarandos was asked about those ambitious five year goals that leaked in the Wall Street Journal reported which sent the stock higher earlier this week here. He said those are aspirations, not forecasts and they do not have five year guidance. There were a number of questions about economic uncertainty and the potential impact on Netflix. Peter Co CEOs Sarandos as well as Greg Peters saying that they have not seen any significant changes in the plan mix and the way subscribers are behaving and that entertainment has been historically resilient in economic downturns, but that they are paying very close attention. Notably, the company is not changing its 2025 full year guidance, saying there has been no material change to our overall business outlook since our last earnings report and saying they are currently tracking above the midpoint of their 2025 revenue guidance range. On the call saying that content and marketing expenses will ramp in the second half of the year. And they did acknowledge macro uncertainty as one reason why they hadn't made any changes there. Now the company did say that price hikes in major markets including the U.S. uK and Argentina, that they rol recently have performed in line with expectations. They also announced their price, their hiking prices in France today as to how those price hikes are working. They just said on the call that they have healthy retention trends. And then one interesting nugget on the company's live event strategy. They said they're going to expand from their current US Focus to other countries over time. So Melissa, we'll see what that means in terms of bidding on sports rights. Back over to you. All right, Julia, thank you. Julia Borson, Just off the after recession highs right now, higher by about 3%. A couple of days ago we were talking about Netflix as being tariff resistance, recession, resistance, recession proof, whatever you want to call it. It looks like according to the results in the guidance, like it is, no doubt.
- [04:38]
Dan Nathan
And they're operating better too. I mean operating margins 31.7%. Then they guide to 33% next quarter and guide for up 15% year over year revenue growth which sort of justifies the valuation which is Something I think collectively we've been saying for a while. So the all time high I think was 1064, something like that back in February I think, I think this quarter is good enough to get it through those levels.
- [05:00]
Guy Adami
And there's still secular trends around streaming. I mean people forget I know the death of linear TV we've talked about forever but streaming still only, still only 44% of TV time. And Netflix is taking a marginal share of that over the competition. So I would say recession resilient. I would say there are three different or four different areas people are having easy time pointing to the growing ad revenue is part of this the story that the operational efficiency guys referring to better margins, economies of scale and content. I mean really the content's been extraordinary. And then when you put that into hey this is a decent value prop whether, whether they raise prices on you by two bucks a month or not. Think about where the consumer is spending money and where they will hold on to at least that allocation of their wallet.
- [05:42]
Julia Borson
They spend 18 billion on content which outspends everybody by a large margin. But do you know Amazon prime is actually has a bigger market share than Netflix quietly on their, on their prime video. That's excluding their music on, on one side. But when I look at this it looks toppy. So I look at a chart and the guy pointed out 1065, you look at a thousand was the last high, a lower high. I think it can get to where guys talking about but the fact that they don't provide the subs. I think they know their growth is slowing. I think at this point they're the name to beat. But I probably wouldn't be buying into it right here.
- [06:26]
Katerina Simonetti
You know it's hard to find mega cap companies and they think they're going to be a mega cap company by 2030. Right. They kind of guided to a trillion dollars in market cap that you know have this sort of growth from an EPS standpoint, you know north of 20% mid teens sales growth. And you know the one thing I'd just say about the recession proof is like we're not in a recession yet, you know what I mean? Like so let's see how this goes. Let's see what sort of tariffs are put on services, you know in the EU and some other places where you know important growth areas. So you know the silver lining though is that ad sale, that ad sales growing off such a low base, you know and they really keep talking about doubling them. That's really helping that operating margin. I think that's probably helps justify the sort of valuation it has right here, nearing what, 40 times.
- [07:10]
Tim Seymour
The context, though, of this market is that people are willing to pay up in terms of premium valuations for companies that can deliver in this environment. And that do seem to be relatively recession proof or relatively spending pullback proof. This is one of them. So I get what you're saying about high valuation, or maybe it looks toppy, etc. But we've seen this happen again and again. I mean, look, look at Walmart. So many other names that we see say that one is executing most of it.
- [07:38]
Julia Borson
Most of their business is ready outside. Most of their revenues are 56% outside of the United States. So that's been a growth, a tailwind for them when they said they're going to grow internationally, but they're already bigger internationally than they are here.
- [07:52]
Guy Adami
I think be careful, because we thought Meta could do no wrong. Right? This was a story. And I'm watching an analyst community that's saying this is their top Internet play. And you can call Netflix a lot of different things. It could be media, it could be Internet play. So when things seem like there's nothing that can knock it from the sky, be careful. But I do think even at I'm seeing, you know, roughly 32 times 12 bucks of EBITDA, you know, you've got a story that's actually very defendable. And I think it's something that, I think right now, in a world where there are other places that have a lot of issues to them, this is actually relative value for a tech space that's not cheap yet.
- [08:27]
Tim Seymour
I think the caveat that you brought up is the biggest sort of overhang and question mark over the stock, and that is we're talking about reciprocal tariffs on stuff that we sell, stuff that comes into this country. How about services? And what if there is a reciprocal.
- [08:41]
Guy Adami
Are we counting services? Apparently we're counting that now. Some people don't count services.
- [08:45]
Tim Seymour
Now we, now we don't. But in terms of the tariffs, we weren't talking about that. But if there is some sort of tariff on these digital services, that could really.
- [08:52]
Katerina Simonetti
I mean, the US threatened that, right? And we're seeing this get ratchet up no matter what region we're talking about with the tariffs. I mean, a lot of folks, and maybe it's a negotiating tool. You know, these guys have been excluded the services in 2018, 19, when we were kind of going through that trade war. So there's no discount for that. That's the one thing I would say Is, you know, as you get back towards these all time highs, you know, maybe it doesn't kind of hold that. I'd be surprised if it establishes a new range.
- [09:16]
Dan Nathan
As Tim said, you know, one of the few big companies out there, it's mature as they are that actually margins are increasing in this environment. So that's good for them. Look, I get all the on the margins. I think you stay long. Netflix here.
- [09:28]
Tim Seymour
All right. Meantime, new reports that President Trump has discussed replacing Fed Chair Jerome Powell as head of the central bank. That after the president lashed out against Powell on social media for not cutting rates fast enough. Steve Liesman is here in house. He's got the very latest. Steve?
- [09:43]
Melissa Lee
Well, the bidding, I think we began this morning with this tweet from the. Is that it's still a tweet if it's not true social.
- [09:49]
Angelica Peebles
It is to me.
- [09:50]
Tim Seymour
Is it just a post?
- [09:50]
Guy Adami
It is a tweet.
- [09:51]
Melissa Lee
Social media post. Smp. It's a lot to say, though. It's a lot to say. It wastes a lot of time.
- [09:56]
Guy Adami
I'm sure Elon's happy talking about it.
- [09:59]
Melissa Lee
Exactly. So it began this morning that way with the idea that the President said he can't wait till the Fed chair is terminated. And it was the use of that particular word that created the to do or the fuss because the question is terminated as in passively terminated when his term is up in May 2026 or terminated by an act of the President which most people believe he cannot do. I keep thinking about the following. Let's say the President does follow through with this and I think it's a real risk. Right. What is not a real risk that the President has shown is a line he will not cross here. Okay, what happens to the value of the dollar? What happens to our bond market in that case? Now, perhaps the good news here is the following that it appears according to the Wall Street Journal. He has talked about this privately and he has been counseled not to do it. The idea that there are people around the President counseling him not to take this act is probably a good development. Megan Casella reached out to the White House and was told that the President is not considering at this time removing the Fed chair. It did not say the Fed does. The President does not believe he has the right to do this. But he did say that they did say that, that there is no consideration of it at this time. So I think this hangs over the market for quite some time.
- [11:18]
Tim Seymour
I mean, we should note that among the people counseling him not to do not to go ahead with it is Scott Bessant, which is a really important, you know, nugget. Right.
- [11:27]
Melissa Lee
Not irrelevant.
- [11:28]
Tim Seymour
Right, Exactly.
- [11:29]
Melissa Lee
Not irrelevant. One of the people he apparently was talking to was Kevin Warsh. I would find it difficult to think that Kevin Warsh would take this job if offered to him on the backside of the chair being terminated. I mean, can I look.
- [11:43]
Guy Adami
Even though we expect him to be the guy, right? I mean, isn't.
- [11:45]
Melissa Lee
Well, he could be the guy. I will tell you, he's a little bit more hard money than perhaps the President wants. Can I turn the camera three and say, Mr. President, don't do this. Is he allowed to do that? I mean, do whatever you want. I mean, it just seems like of all the things that are going on right now, what do you have to gain? Do you really want, by the way, what does the market want? What is gold telling us? Which I've not been a gold bug for a very long time, because it's interesting to me that gold would not rally amid trillions of negative interest rates around the world, but it will rally in this sense when the dollar looks like it's really the question. So what is the gold trade here? The gold trade is a substitute not for bonds and preserving your current, your value or your principal. It's a substitute right now for the dollar and the safety of the dollar.
- [12:31]
Tim Seymour
Must have been watching Fast Money yesterday, or was all about this and the Swiss francs. Absolutely, absolutely.
- [12:37]
Dan Nathan
We had a conversation a couple weeks ago, and I said, you know, the President just declared an economic emergency, and we had the conversation. I said, I think what he's setting up for is to fire Jerome Powell for cause. And now we're seemingly. We're in the midst of this, but. You brought it up, but get a little more granular. What happens to the bond market if somehow magically that happens, and I do think it would be tragedy.
- [12:59]
Melissa Lee
Can I test the back room here? The production room?
- [13:01]
Tim Seymour
Sure.
- [13:02]
Guy Adami
They're going to win, by the way.
- [13:03]
Melissa Lee
They're going to win. Let's put up a chart of the Turkish lira.
- [13:08]
Guy Adami
Oh, you stole my. Because we turned into Turkey. Yeah, that's exactly what happened.
- [13:11]
Melissa Lee
Erdogan is how you pronounce the president there. He took over. He subverted the independence of the Turkish Central bank, who I used to know, the Turkish central banker. And he was a pretty well regarded independent dude. And then he actually left. And the new guy, the President, said, okay, that's not the way he's going. Is it up there? Look at that.
- [13:31]
Tim Seymour
It's Got to be a longer, it's got to be a long period.
- [13:33]
Melissa Lee
Yeah, yeah, but it's got to show. But anyway, they win. I mean, I'm not going to fight with Sandy on air. No way. Anyway, so bottom line is that's what happens. The dollar would, would, would lose value. Our bond market would lose value. People don't understand all of this that goes on every day. You guys talk about this. It's all a series of consensus. I agree that that bond has value to it. I agree to give you this green paper and you agree this green paper has money. When the consensus erodes among humans who are involved in this trade, the whole thing erodes. And that's why you go for gold. Because ostensibly, you know, in the, as Jackson Brown sang in the fury of the final hour, we'll all agree that gold is okay, but we don't want to go there. We don't want to test that. We want to. These consensuses that we have are things that allow us to go to, ok, I have dollars. Dollars are good. Dollars are accepted. Dollars. Okay, but then you have an independent central bank that will be, or a non independent central bank that is subject to the political whims of the president. And therefore you do not have the idea that the Fed will secure the economy from inflation. Period. End of story.
- [14:49]
Tim Seymour
Steve, great to see you. Thank you for coming by. It's always nice to get you in person.
- [14:53]
Dan Nathan
That's a deep cut. Jackson Brown.
- [14:55]
Guy Adami
Love the JV raps.
- [14:57]
Tim Seymour
One of the many reasons.
- [14:59]
Guy Adami
By the way, I think Steve kind of quietly laid the gauntlet down for the rest of the show.
- [15:02]
Melissa Lee
Well, it's called after the deluge, right? I used to play that one.
- [15:05]
Tim Seymour
Well, nice.
- [15:07]
Guy Adami
Right now, Steve, you're running on empty. We gotta, we gotta move.
- [15:10]
Melissa Lee
No points for running on empty.
- [15:11]
Tim Seymour
See you, Steve.
- [15:12]
Melissa Lee
Come on, Jamaica.
- [15:13]
Tim Seymour
Say you are Jamaican's cold. Now, our next guest is not worried about President Trump's attacks against Powell. Katerina Simonetti, a senior VP and private wealth advisor at Morgan Stanley Private Wealth Management. Katerina, great to have you with us. You're not worried at all. You think this is just Trump asserting that he believes rates should be lower?
- [15:33]
Rich Greenfield
Well, it is fair to say that we have seen President Trump criticize Jay Powell before. As a matter of fact, I believe somewhere around 2019 he called him a golfer that can't putt. So administration absolutely might have their opinions, but Jay Powell has one year left in the office and he is going to finish his term. At least he absolutely should be. And it's fair to expect that Fed, which is an independent entity, is going to be data driven in this decision on whether to cut rates or not. And tariffs, rightfully so, present severe significant inflationary pressures. So we need to give Fed more time to analyze the data to see how the effects of this policy will trickle down into the data. Yes, we saw good numbers just recently and that's great. But the tariff policy is not going to be immediately reflected in this data. There is delayed effect there. So naturally we expect Fed to be very thoughtful about this decision. And for us, we don't expect Fed to cut rates at all this year.
- [16:43]
Julia Borson
So Katerina, am I being too cynical thinking if they have to refinance over 9 trillion in debt, somehow some way he will cut Powell? This is who I'm referring to obviously on his, on his own. And should President Trump sort of just leave him alone because he, Chairman Powell does not have a great approval rating. President Trump's approval rating is actually better than Chairman Powell. So is it on a refinance and refinancing debt mechanism, do rates have to come down regardless of what's going on?
- [17:21]
Rich Greenfield
Well, as we know for Jay Powell, all options are on the table. And as the time goes by, as they look at the data, absolutely this is something that they will be considering and I'm sure that they're taking in this information, all of it, you know, as much of it as it's coming in and are figuring out how this will be fact that it will have on growth, the effect that it will have on the economy. And yes, this is one of the options that should be considered, but it is too early to call it yet. We have to just wait and see. We have to give this a little bit of time to see the effect is going to have not only on inflation, but on the broad economy in general, on earnings and on overall positioning as we go into the end of the year.
- [18:10]
Guy Adami
Katerina, I guess I'm curious your opinion on does, does the, does the dynamic with the president in an environment that's the Fed seems so boxed in. Do you think that the Fed really has to dig in even more in this environment or do you think the Fed is really holding whatever line they're going to. In other words, my view is that Secretary Besent really is of the school that he would rather see the Fed be less involved in both the economy and the markets and that fiscal policy shouldn't be the cure all. I think he's on the side actually of not doing anything. But I'm just kind of curious. If you think that the current rhetoric means that one side has to give more than the other, I think it.
- [18:53]
Rich Greenfield
Makes perfect sense to see it that way. And also we have to understand that from president's perspective, he sees the long term benefit of the tariff policy to be so strong that he is encouraging the investing public to kind of look beyond these short term risks. But we also have to appreciate that for the Fed it is the short term effect. It is really months to month that they're looking at. So we're seeing here, you know, the clash between the long term perspective, what is being done for, you know, just, just the good of the country from the administration's perspective and the Fed and Jay Powell who are looking at the immediate effect at inflation, at potential recession, at what this means for the economic growth in the short run until we see these long term positive effects come to fruition.
- [19:47]
Tim Seymour
Katerina, great to see you. Thank you for your time.
- [19:50]
Rich Greenfield
Thank you for having me.
- [19:51]
Tim Seymour
Katerina Simonetti, what do we do in this highly uncertain, not only do we have the uncertainty of trade policy, but you have this sort of outlier scenario of potentially Jay Powell being out.
- [20:03]
Dan Nathan
I think a lot of roads lead to higher rates and I'm still on that camp. I'm not saying I'm right. But you know, the TLT I think will visit levels we saw in October of last year was like 82, which means 10 year yields get north of 4.8% and they're not going up for the right reason. So I think higher rates are a bad thing right now.
- [20:19]
Tim Seymour
Mel?
- [20:20]
Katerina Simonetti
Yeah. And the other thing is the longer this kind of negotiation goes on and the longer we don't know what the concessions are, I just think the more complicated it gets. There's no manufacturing that's coming back this year, next year that's going to be meaningful for this economy. So I think the longer this goes on, I think more it weighs on the economy and the greater likelihood it's inflationary and the greater likelihood rates go higher.
- [20:38]
Tim Seymour
Coming up, an easy pill to swallow. Eli Lilly shares surging on new drug trial results. The edge it could give the pharma giant over competitors. That is next. Plus, shares of UNH cratering after its latest earnings report. Why? The company is slashing its profit forecast when fast money returns back into.
- [20:55]
Steve Grasso
Don'T just ride the index. Seek to outperform it with FELC, the Fidelity Enhanced Large Cap Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other etf. Discover FELC the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus and offering circular or if available a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail in index as compared with passive ETFs. Fidelity Brokerage Services LLC member NYSE SIPC.
- [21:56]
Katerina Simonetti
Introducing CNBC plus the new streaming platform from the number one source in business news. Watch live or on demand.
- [22:04]
Tim Seymour
Access any market, anytime, anywhere. Start Streaming. Go to cnbc.com stream now. Welcome back to Fast Money. Eli Lilly soaring 14% for its best day since August 2023 after posting positive results from a late stage trial of its obesity pill in patients with type 2 diabetes. Angelica Peebles joins us now with all the key takeaways. And it looks like the key takeaway is that it was as good or maybe even better than Ozempic.
- [22:32]
Angelica Peebles
Exactly, Mel. The main takeaway here is that Lilly has a daily pill that can compete with those weekly shots. Now in the trial, people on the highest dose of Orphaglipron losing 8% of their body weight after 40 weeks and that's already at the high end of expectations and they didn't see a plateau. So remember, people with diabetes tend to lose less weight, so this bodes well for the obesity specific trial that will lead read out later this year. And two doctors I talked to today said that they see this pill becoming a popular option, especially for people who are wary of weekly shots. I have patients every day who are like is there going to be a pill version out?
- [23:12]
Rich Greenfield
So I feel like this is revolutionary.
- [23:15]
Angelica Peebles
As far as providing patients who are.
- [23:19]
Rich Greenfield
Little, like I said, reluctant to using an injection. And they can see some similar results with injections but have the ease of taking a pill every day and.
- [23:29]
Tim Seymour
They'Re.
- [23:30]
Rich Greenfield
Just a little bit more open to it.
- [23:33]
Angelica Peebles
But one factor here will be the cost. Now this pill can be made much more easily and at a much lower cost than other GLP1s. So the hope here from these doctors we talked to is that Lilly prices this pill below the roughly thousand dollars a month for the current list price of zepbound and wegovy, Mel, the soonest.
- [23:52]
Tim Seymour
It can come to market is when. Angelica, what's the projection?
- [23:56]
Angelica Peebles
Next year. So the plan is that they're going to file for obesity later this year and diabetes next year. So depending on how long that review takes, we could see it on the market as soon as next year.
- [24:06]
Tim Seymour
All right, Angelica, thank you. Angelica Peebles. And of course you've got to take a look at Novo Nordisk, which is down 7.6% on the back of these. We've been saying for a long time that Novo in particular is under pressure because of these looming results. Here they are and we see the stock reaction.
- [24:22]
Dan Nathan
Yeah, but I also thought you could make a valuation case probably 15 or $20 ago at least. And here we are at two or three year lows. It did trade about four times normal volume today. Maybe that's good news, maybe that's some sign of capitulation. But I mean they're clearly losing right now in a pretty, pretty big way.
- [24:37]
Guy Adami
Yeah, I mean if you consider this drops into the same safety profile of the existing out there. This is obviously as the stock showed today, this is a huge, huge event. The question is where can this stock trade when people kind of felt that they were in the pole position anyway. So there's no question that this is greater news. And I can kind of see I'm with Guy, by the way. I might even have been more vocal than Guy on Novo. I really just felt this was one that was so underperforming. But the reaction today tells you that poll position has just gotten even that much more in the lead.
- [25:07]
Julia Borson
Yeah, it's up 14% today and only up 9% year to date. So I don't know how much more juice you could sort of get out of it here this, but the, the tam, the total addressable market for this is shift huge. You're going to have a lot more people that are afraid of needles that don't want to do it on every day. It's just a, it's a, it's a non starter for so many people of the original medication. Once you go to an oral the TAM really increases a lot.
- [25:34]
Tim Seymour
Coming up, shares of Alphabet taking a hit today as it comes under the monopoly microscope for the second time in less than a year. The ruling against the company and what it will mean for the stock. Plus we're keeping an eye on Netflix shares after hours. The company conference call just wraps up is higher by two and a quarter percent. All the headlines from that one ahead, you're watching Fast Money live from the NASDAQ Marketsite in Times Square back right after this.
- [25:56]
Steve Grasso
Don't just ride the index. Seek to outperform it with Felc, the Fidelity Enhanced Large CAP Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other etf. Discover Felc, the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for prospectus, an offering circular, or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. Fidelity Brokerage Services LLC member NYSE SIPC.
- [26:57]
Tim Seymour
Introducing CNBC, the new streaming platform from.
- [27:01]
Katerina Simonetti
The number one source in business news. Watch live or on demand.
- [27:05]
Tim Seymour
Access any market, anytime, anywhere. Start Streaming.
- [27:09]
Julia Borson
Go to cnbc.com stream now.
- [27:14]
Tim Seymour
Welcome back to Fast Money. Alphabet shares falling today after a judge found that Google illegally monopolizes two online advertising markets, publishes Ad Servers and Ad Exchange. It is the second time in eight months the company has been deemed a monopoly and comes ahead of another trial next week where the DOJ is pushing Google to sell its Chrome browser. The initial reaction was down 3 plus percent, although it paired those losses. What do you make of this sort of reaction?
- [27:39]
Katerina Simonetti
We've been talking about this for years now. And so when a lot of these. But it's getting closer, right? To remedies. And I think that's the thing. And so the fact that it sold off three and a half percent quickly and kind of regained a bunch of it, I mean like the likelihood is, listen, Sundar Butcher gave the money, Google gave the money. They were on the dais at the inauguration. They made. The doj might follow through. Then he's going to have to grovel, you know, to the White House or Mar a Lago, and it probably ends up okay because that was the whole.
- [28:03]
Tim Seymour
Trade, but so was Zuckerberg.
- [28:05]
Katerina Simonetti
Well, you know what, I think they're going to do the same thing. It's kind of mob tactics, right? You let the, let the government do what they're going to do and you go and you grovel and you know these guys deserve it.
- [28:13]
Guy Adami
By the way, the question also is for, for those people that have felt Google is a, is a sum of the parts story that's been waiting to be unleashed. I mean, I don't know. I mean, is it that bad if you're a Google shareholder? If they spin this off in a world where we do know they have other businesses that I think they're very focused on. So it is interesting that the regulatory pressure seems to be building against this company. Is also interesting that this company's probably never been this, probably hasn't been this cheap in, I don't know, since at least the COVID lows on a trailing basis. In other words, that's a backward look. Very profitable, but really hit hard.
- [28:47]
Tim Seymour
All right, well, Nvidia down again today and ending the week eight and a half percent lower. The semi giant under pressure after it said Tuesday that it would take more than a 5 and $5 billion charge due to limits on exporting one of its AI chips to China. The Semi ETF SMH also ending the week lower. One of our Fast Money fans actually reached out and wanted to ask our traders what to do with the stock now.
- [29:09]
Julia Borson
Greetings fabulous Fast money team Chuck here from Goodyear, Arizona. We had too good of a time.
- [29:15]
Tim Seymour
On the live show in last February. I'm worried about Nvidia now with the new 5.5 billion charge tied to exports.
- [29:24]
Julia Borson
Is it time to bail or stay in jail on holding on?
- [29:28]
Katerina Simonetti
Peace to all.
- [29:29]
Tim Seymour
Thank you. All right, nice to hear from you, Chuck. Guy, what do you tell Chuck?
- [29:34]
Dan Nathan
First of all, I hope Chuck has a shirt on. I mean he was looking scantily clad number one. But it's Arizona.
- [29:38]
Guy Adami
He did that Totally. He did that for you. He did that for you. He tried. You know what?
- [29:42]
Dan Nathan
It is working.
- [29:42]
Guy Adami
He told you when he was here he was going to do that for you.
- [29:45]
Dan Nathan
Fair enough. Listen, we held the August low which was 90 recently and we bounced. That's the good news. The bad news is there is no real bounce. So Nvidia is trading poorly. I think it continues to trade poorly. I'd pull the ripcord here.
- [29:58]
Julia Borson
Yeah, I agree with that. I think you have to go back to that April level of 75. I think that's where I think it pierces the 90 level. If you look at 30% of the revenues, it comes from three clients, three customers. All they have to do is scale back and we know they're already scaling back to some extent. The spend is not going to be what you think it's going to be I think in video comes in dramatically from here. I would bail.
- [30:20]
Katerina Simonetti
Yeah. So that $17 billion of H20s, this was chips that were kind of made for the Chinese to get around the, you know, the export bands. They're sitting here. If they can't go, that's a huge inventory problem. Maybe that's that five and a half billion, but that's a huge part of the expected growth. Or was 13% of their sales last year. I think it goes down 50% and.
- [30:40]
Tim Seymour
I know that sounds like from here.
- [30:41]
Katerina Simonetti
No, no, I think it goes from the highs, you know, back from 21 to the lows. It was down 70% and no one thought it could do that. So it overshot to the upside. It's going to overshoot to the downside.
- [30:51]
Tim Seymour
All right. We'll have more Fast Money fan questions later this hour, including one viewer who wants to know where the traders see the 10 year heading next and another with a question about our acronym challenge. Don't forget to join us at the next Fast Money Live event. You can scan the QR code on your screen or go to CNBC events.com fastmoney to get your ticket. So check that out. Coming up, another check on Netflix as the company's conference call wraps up. The headlines from that one and what the latest results mean for the streaming giant. Do not go anywhere. Fast Money's back into. Welcome back to FAST MONEY Stocks closing mix in a choppy session. The Dow losing more than 500 points, dragged down by UNH. We'll have more on that in just a bit. The S and P eking out a small gain and the NASDAQ posting a small loss. All three indices posting their third negative week in four. Shares of $ Tree and Dollar General higher today. Dollar General now up nearly 23% this year while Dollar Tree posted its highest close of the year. American Express reporting results have beat expectations this morning, citing increased spending from its affluent customers. The company also sticking to its profit and revenue forecast for the year. And energy with a big move higher. Crude and Brent both notching their best weeks of the year. The XLE up more than 2%. You're noting the dollar stores were interesting to you?
- [32:03]
Guy Adami
Well, interesting because, you know, we've been following Dollar Tree on this desk for a year and a half, maybe two years when we were really pointing out that their cohort was hit hardest by inflation and that they were the ones that were suffering the most. It was really, this is, by the way, when they went from really the dollar store to the $25 store. But I think the dynamic around China and the focus on where they are vulnerable, where they are not, where they have grocery exposure, where they don't, I think has allowed people to really assess whether, first of all, the, the segment, period, the format, I should say has, has, you know, life. Because I think a lot of people question whether the dollar format in an inflation world, in a post China world has life. I think dollar tree is interesting here because I do think you've priced in all of this news for the last two and a half years and any little bit. And the chart tells you that.
- [32:47]
Tim Seymour
All right. Meanwhile, we're getting more commentary from Netflix as the company's earnings call wraps up the streaming giant higher after reporting a top and a bottom line beat. Our next guest says Netflix's ad tech scaling should scare the legacy TV landscape. Landscape. Let's get more on the quarter from LightShed Partners co founder Rich Greenfield. Rich, great to have you with us.
- [33:04]
J
Thanks for having me, Melissa, you and.
- [33:06]
Tim Seymour
A lot of other people have been really bullish on Netflix for quite some time, saying it's basically Netflix's world. Everybody else is living in it. Has anything changed with this quarter? Does it put it even more in the lead? For instance?
- [33:18]
J
I mean, look, they're producing content in 50 countries. They're buying back, I mean, they bought back three and a half billion dollars of stock. They raised price again, no elevation insurance. Even in a weaker economic environment, we forget about the tariffs and everything that you've been talking about for the last few weeks nonstop. But even before that, we all know the economy was slowing as we headed into the year. Even with that, you know, you think about it, Netflix has, in their words, it's always hard to judge this, Melissa, but in their words, they have the strongest content slate in the history of the company. So even in a weak economy, people are spending more time consuming Netflix, there is more iconic content. I mean, look at the success of something like adolescence, not an expensive show blew up all around the world. And so creating more content that people love, consumption going up, raising price, not really economically sensitive versus the rest of the media space and generating tons of cash and increasing their buyback. Like numbers look low for the rest of the year. Like, this is a pretty great position to be in.
- [34:19]
Tim Seymour
Mm.
- [34:20]
J
And they're literally leaning in and taking advantage of everybody else. I mean, if the ad market slows and TV slows and cord cutting accelerates, Netflix's relative position increases, which is, I think, why you're seeing investors rotate to what I would deem the Safer, more predictable names, whether that's Netflix or Spotify, and staying away from the entire traditional media sector, which looks very, very problematic as you look through 25.
- [34:46]
Tim Seymour
So in the spirit rich of trying to find a hole in the story, is there any concern on your part? Okay, well, I'll name what my hole could be. We can compare. Okay. Is there any concern on your part that there could be a tax on services around the world, attacks on content, which could change the economics for Netflix, even if it's temporary?
- [35:10]
J
I mean, look, there's always risks around, you know, levies that could be placed on different companies in different countries.
- [35:17]
Tim Seymour
We're in a world of reciprocal tariffs and tariffs on this and tariffs on that. And people are looking, you know, countries are looking for a way to gain some leverage.
- [35:26]
J
Still, you're looking at a company that has an incredible price value equation. You know, you see the pricing power they've had. So I think at the end of the day, as long as this is placed on everyone, you know, meaning this Disney plus, this is placed on Hulu, this is placed on Macs all around the world, like as long as that, I don't think there's any reason why you see something on Netflix that wasn't placed on others. Melissa. So I don't think on a relative basis that's a reason to be concerned. And all of these streaming services are still far better values for the money, you know, time spent relative to consumption, relative to the traditional TV ecosystem. And you see that, you know, they're 10% of viewership in the U.S. or, you know, thereabouts. They're now up, I think, 9% in the U.K. like, so everywhere around the world they're sort of replicating this model of becoming, you know, roughly 10% of, of, you know, total TV time spent. That gives them a lot of leverage in terms of that price value equation because it's still pretty cheap entertainment. And the advertising plans, they made a great point. Greg Peters has been really leading the advertising charge. He's co CEO and I think that plan for the first time in a recession, if we go into one, you tell me or the rest of the Fast Money team tell me. But if we are going into a recession, this will be the first time they're going in with a far cheaper ad supported plan that really protects them on the downside. Even if people downgrade, they're making just as much money in the standard plan if you downgrade because of the benefit from ad sales. So that's a really good position. My concern is Something entirely different.
- [36:55]
Tim Seymour
Okay, just quickly, what would that concern be?
- [36:59]
J
I think the craziest thing I've seen, you know, you brought up Google and the whole antitrust lawsuit. The craziest thing is YouTube is getting stronger by the day. The amount of time spent on YouTube on a TV grows every single month, every single quarter. It's now 12%. And it's just stunning. And so the power of user generated content, I don't think this is just a risk for Netflix. I think this is a risk for every company in the media universe. The power of YouTube scares me. And I think from that standpoint, you know how you make sure that that's. Look, the good news is there's lots of market share to take from linear tv. That's sort of the point Netflix keeps making. But I do think you have to keep your eye on just how fierce and scary the growth of YouTube is and how younger people especially, but even aging up, are spending more and more of their time on YouTube.
- [37:49]
Tim Seymour
Rich, always great to get your thoughts. Thank you, Rich Green. Thanks, Melissa. We do have some breaking news we want to get to out of Washington. President Trump making comments on China tariffs. Let's get to Megan Caselo with the details. Megan.
- [38:00]
Angelica Peebles
Hey, Melissa. Just in the last hour or so so the president brought reporters into the Oval Office while he signed a couple of executive orders and he took some questions, many of them about trade and particularly with China. He was pretty non committal on the topic of whether or not he and President Xi have been in touch. But he said, yes, the US And China have been talking on trade even since this tariff escalation we've seen just in the last week or so. He said he's very confident that the US Will make a deal with China. He says we've had some very good talks. There's some very good ones still remaining. He also seemed to at first slow down the timeline, saying he said some people see a rush, but he doesn't, that he thinks we have a lot of time or plenty of time. But then he was also asked about how he sees the timeline from here and the path forward. Take a listen to this.
- [38:45]
Tim Seymour
How much time do you think? I would think over the next three.
- [38:49]
Guy Adami
Or four weeks, I think maybe the.
- [38:51]
Angelica Peebles
Whole thing could be concluded, maybe the whole thing could be concluded over the next three or four weeks. But Melissa, a couple of points to highlight here. That is a big move from the President to say that, that he thinks maybe the whole thing could be done less than a month from now. We don't know though what exactly he's basing that on. The 90 day deadline doesn't actually lift until sometime in early July. So they do have more time than that. It was also unclear to me from the back and forth forth there whether he was saying the China deal would be concluded within three to four weeks or whether he meant all of these deals that the US is currently negotiating what they say more than 75 countries. So a couple of caveats to put on that. But it is even still sort of a sign of the momentum that the White House at least wants to project is behind these negotiations.
- [39:38]
Tim Seymour
All right, Megan, thank you. Megan Casella. Coming up, shares of UNH plunging as the insurance giant slashes its profit forecast. How higher medical costs are weighing on this name and dragging on the Dow the details when Fast Money returns. Welcome back to fast money. UnitedHealth sinking over 22% for its worst day since 1998, single handedly pushing the Dow into the red. The company slashing its full year profit forecast by $3 billion, citing higher costs in its Medicare Advantage business. Other private Medicare insurers also finishing the day lower. But Elevance did reaffirm its Q1 guidance this morning despite higher Medicare cost trends. Now the question here is how much of this is a UNH story, how much of this is an industry story? Mizuho for one, saying that this is a UNH story, that their guidance on the medical loss ratio just was not conservative enough. And so that really posed the issue here. What are your thoughts?
- [40:31]
Guy Adami
Well, I think the reason this felt so bad is because this is a company that's been robotic in terms of what they've done in terms of the consistency here and their ability to grow above trend relative to the peer group and be the superior name. And, and in some sense when you hear this, it makes you really wonder whether it was as good as it has been because again, the earnings miss was not meaningful. The guide down was probably at 10%. But when you heard the CEO basically say this is unacceptable, we need to do better, that to me tells me it's a United health care problem.
- [41:01]
Tim Seymour
Yeah, I mean they just gave their guidance three months ago. And that is a huge part when you mentioned like how it has executed. Carter Braxtonworth has called this chart godlike. It has been so consistent until very recently.
- [41:14]
Julia Borson
Yeah. They also own 28% of the market share for Medicare Advantage plans, followed by Humana. And the light at the end of the tunnel for this is that the Biden administration had lowered that reimbursement to two and a quarter percent come 2026 it's up to 5%. That's a huge increase for the stock. If you could hold on, I think the stock does rally back.
- [41:37]
Tim Seymour
All right, coming up, we ask. You ask. I should say we answer. Sometimes we ask too, but we will answer. Fast Money friends from across the country sending in their market questions. Where our traders stand on rates, global investing and their acronyms. The answer is next. More fast Money into. Welcome back to Fast Money. We are back to take more of your questions. With all the market volatility we have seen the last few weeks, some of our fans who attended our Fast Money Live event sentence their investing and trading questions. Take a listen.
- [42:07]
Julia Borson
Hey there Fast Money gang. My name is Craig and I had an epic time there at the Fast.
- [42:12]
J
Money Live event and I would recommend.
- [42:15]
Tim Seymour
It to anybody to go.
- [42:16]
Julia Borson
Hey, today I want to hear from.
- [42:18]
Tim Seymour
You traders about the 10 year hitting 5% or falling back to 4% over.
- [42:22]
Julia Borson
The next couple of months.
- [42:23]
Tim Seymour
A few weeks back I took out a short position in the Triple T ETF based on a thesis that with.
- [42:29]
J
The increase over the last 10 years.
- [42:31]
Julia Borson
Of foreign buyers it will decline significantly.
- [42:34]
Tim Seymour
Creating less demand for our US debt while driving rates higher.
- [42:38]
J
Where do you guys think the 10.
- [42:39]
Tim Seymour
Year is more likely to go? 4% or 5? Craig with a little. Would you rather.
- [42:45]
Guy Adami
By the way Craig, I remember he had a cool pair of shoes he was wearing. He was styling and I just, you know, I remember that Craig, including those specs you just had on.
- [42:53]
Tim Seymour
Fancy.
- [42:54]
Guy Adami
Those are cool.
- [42:54]
Dan Nathan
You want to effort to ask us answer his question.
- [42:57]
Tim Seymour
Oh well, four or five.
- [43:00]
Guy Adami
By the way, that's a good. Would you rather. Craig just. Would you rather does. I'd say. I'd say 4%.
- [43:06]
Dan Nathan
Mel said.
- [43:07]
Tim Seymour
Would you rather I just.
- [43:08]
Dan Nathan
You didn't listen.
- [43:09]
J
You're not.
- [43:10]
Guy Adami
I was so blown away by Craig's glasses that I'm talking about anymore.
- [43:14]
Dan Nathan
I don't love these double and triple levered ETFs but if you're so inclined, I think rates are going higher. So I think you're on the right path. Greg.
- [43:21]
Tim Seymour
All right. Now here is a question that is perfect for Tim.
- [43:25]
Guy Adami
Okay.
- [43:27]
Tim Seymour
Hello my fast money friends. This is Jeff from Scottsdale, Arizona.
- [43:31]
Katerina Simonetti
Pursuant to managing a diversified portfolio for.
- [43:34]
Tim Seymour
Years I have held up to 10% of foreign dividend yielding stocks. With the weakening US dollar and continued volatility due to the tariffs is now a good time for me to increase my holdings things in foreign stocks? Jeff apparently missed the lesson on mega. Yeah, Tim, what would you tell him.
- [43:58]
Guy Adami
I think Jeff's got it right and it's interesting that he pointed out not just foreign stocks but foreign dividend paying stocks. IDEVO is an ETF I manage that does just that. But the point I would make about European banks, they have probably a 60% yield premium over US banks. If you look at European industrials, they also are playing probably a 40% higher payout ratio than us. So I think you have a buffer when you buy these dividend stocks. As we would say, you never buy a stock for a dividend, but the currency dynamics I think. Continue. Yes, foreign stocks.
- [44:26]
Tim Seymour
All right, we've got time for one more question. Here it is. Hey, Fast Money, this is Aditya from Denver. I had a great time at the.
- [44:34]
J
Fast Money Live event and I wanted.
- [44:35]
Tim Seymour
To ask the traders if they want.
- [44:37]
J
To update their acronyms due to the Wall street reset.
- [44:45]
Katerina Simonetti
Dan, I told you guys my mistmatic, I wouldn't buy it. I did say that. Okay. It was Gen AI we had.
- [44:53]
Guy Adami
Was he calling you out? Really? Really?
- [44:56]
Katerina Simonetti
I thought he got all of my grill at the event too, but it was cool. He's a good guy. Yeah, I do want to reset, please.
- [45:02]
Tim Seymour
Would you want to update your. What is it? Well, I mean I can't remember what.
- [45:04]
Julia Borson
It is either can I right now, but, but I know it's bitcoin. It's bitcoin waiting. So you know, for me, sir, if we, if we're looking backwards, of course, who wouldn't want to change their. Although OCTA is up 20 something percent so in hindsight, of course we'd like to change. But I'll stick with what I.
- [45:21]
Tim Seymour
All right, if you want more of your questions answered by the traders, you can join us for the next Fast Money Live event here at the NASDAQ that is June 5th. Tickets are going fast. Folks are coming from all across the country. Got 25 states DC even one from down under being Australia of course. Scan the QR code on your screen, head on over to cnbc events.com fastmoney grab your ticket now. Up next, final trades, final trade time.
- [45:45]
Guy Adami
Tim, Shout out to Susie and Jill watching Connolly's on 47th Street. Baba going higher.
- [45:50]
Julia Borson
Steve, it's like Phil Rizzuto it's a bet on Lip Boo Tan Intel.
- [45:56]
Tim Seymour
Dan Guy.
- [45:57]
Katerina Simonetti
Normally you'd have a friend in me, but see what I did there? I would not be a buyer of Netflix.
- [46:03]
Dan Nathan
Well, shout out to the Kerper family from Rochester, the Snow family, Long island. And a major shout out to Mary Duffy whose birthday is today. Happy birthday Mary Happy Birthday Mary. She's watching Tennant Healthcare.
- [46:18]
Tim Seymour
Melissa Always watching. Always watching. Thank you for watching Fast Money. Have a terrific weekend.
- [46:23]
Steve Grasso
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their 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 trading@schwab is now.
- [47:04]
Tim Seymour
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Katerina Simonetti
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Tim Seymour
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Melissa Lee
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Tim Seymour
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