← CNBC's "Fast Money"
CNBC's "Fast Money"
Nvidia’s Post Earnings Blues… And JPMorgan CEO Jamie Dimon’s Bond Market Warning 5/30/25
00:43:52
Shares of Nvidia reversing in today’s session, and sat out the mid-day Mag7 rebound. How the chip giant is faring since its post-earnings pop, and how our traders are positioning in the stock going into June. Plus Jamie Dimon ringing the alarm bell on the bond market. The cracks he sees starting to form, and why one top market strategist is ignoring the bond market alarmists. Fast Money Disclaimer
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- [00:01]
Melissa Lee
Still jumping from tab to tab to create trades. With Fidelity Trading Dashboard, you can easily access live data, advanced charting, portfolio insights and automated alerts all on one screen. Our streamlined view lets you quickly create and execute your trading strategies to help keep up with the markets. Because better trading starts with finding what you need fast. Your Fidelity Trading Dashboard is ready now. For free, visit fidelity.com tradingdashboard Investing involves risk, including risk of loss Fidelity Brokerage Services, LLC Member NYSE SIPC Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide, and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report.
- [01:02]
Tim Seymour
Live in the Nasdaq Marketsite in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. Out of steam shares of Nvidia nearly giving back all their post earnings gains. Why couldn't the chip giant turn things around with the rest of the market? We'll debate that and May Flowers, the S and P and Nasdaq looking to their best months since November 2023. But will the summer months be just as sunny? And how will next week's jobs report factor in? We'll get some answers. Plus, Alta shares get a glow up after earnings. Netflix score, two big bullish calls from Wall street and a literal buzz kill. Why boo Stocks have been under pressure and how to trade the names. I'm Melissa Lee, come to you live from studio Be at the Nasdaq. On the desk tonight, Tim Seymour, Karen Feineman, Courtney Garcia and Steve Grasso. We start off with the latest developments on the US China trade tensions. China stocks falling amid reports that the Trump administration is planning wider sanctions on the country's technology sector. Megan Cassell is at the White House with the very latest on this. Megan.
- [01:57]
Megan Cassella
Hey Melissa. Some back and forth between the US And China today. Some harsh words on both sides, but that headline you mentioned coming from Bloomberg about midday, reporting that the administration is looking at expanding restrictions on China with new regulations that would capture the subsidiaries of companies that already face sanctions. So the idea here, they say this is a draft rule that's currently being considered. And the idea is if you take a company like Huawei that's already subject to US Sanctions If Huawei becomes the majority owner in a subsidiary company, that subsidiary would also be subject to the same sanctions. It's meant to stop this sort of workaround that companies have been using to try to avoid some of these restrictions. So that put some pressure on shares, especially because it came after sort of this back and forth, starting with the president this morning saying that China had violated aspects of the trade truce that was struck in Geneva just a few weeks ago. China then firing back and saying that actually it was the US that was the one that was breaking the deal here. So some tensions and some questions when I was at the White House earlier about whether this might lead to to further action from the administration ratcheting up some of their moves towards China. But when the president was asked about China in the Oval Office mid afternoon, he sort of downplayed things. He said, yes, that China did violate a big part of the agreement, but he went on to say that he's sure that he will speak to Chinese President Xi Jinping and that quote, hopefully we will work that out. So Melissa, no call scheduled between the two leaders. That could be the next step. But for now the president still seeming optimistic that they can work on some sort of deal.
- [03:28]
Tim Seymour
Megan, were there any specifics on how exactly China was violating that agreement made in Switzerland? Did this have to do with critical minerals which US Trade Representative Greer made reference to this morning?
- [03:41]
Megan Cassella
That's exactly right. When Greer was on Squawk Box, he talked about those critical minerals. And the idea was that in this agreement in Geneva, China was meant to soften its export controls to allow the flow of critical Minerals to the U.S. but remember, there was no timeline attached to that aspect of it. The Wall Street Journal had some good just in the last couple of hours that that piece of the agreement was really hard fought in Geneva, that it came along just at the end and that it was crucial to the two sides both agreeing to lower their tariffs, but with no timeline attached. The US now feels that China has been slow walking that and not doing enough. So that is at the center of this here. I don't think it's the only tension. We also have these fights over semiconductor export controls, of course, and student visas, among other things. So a lot of tensions, but the critical minerals really do seem to be at the heart of it.
- [04:27]
Tim Seymour
All right, Megan, thank you. Megan Casella. And this all comes on a day when we saw a sharp reversal in shares of Nvidia, the chip giant dropping almost 3%, nearly erasing all its post earnings gains. The stock unable to bounce off session lows. Like most of the so called Mag 7 stocks, it is now up just half a percent this year. Still more than 11% off the record high hit in January. So what does this tell you about the world's biggest chip stock that didn't participate in the rebound? Especially as we do seem to have trade tensions ratcheting higher?
- [04:56]
Melissa Lee
Well, it participated when I thought the market was reacting to the fundamentals of the release. I think the market got tired today. I mean again, this was the best May. I think I had it the best May since 2000, up 6%. It wasn't a sell and may go away. It's a place where, I think Nvidia has largely rocketed back to where, where it belongs. It gave a little bit back here. But what we heard from the company I think reiterates the dynamic that Blackwell second half of the year, the production that we needed, supply chains eased up and we heard no sign of a delay in demand. And I, I guess, you know, I think about the week that was also when we heard from a couple of retailers, Gap today we heard it from Best Buy. I mean there are impacts already in the retail world. The consumer has proven resilient. We've also heard that I this felt like a week if I had to characterize it as anything. I think rates ground lower, volume ground lower. We're getting through earnings season and there's always a new headline every day on trade that I think the market started to become more immune to.
- [05:54]
Karen Finerman
So I think in video a lot of it was, I mean look at how low it got in the low 90s. Right. So for Nvidia to move more than 50% is an extraordinary move into earnings. So we've seen how hard it is to go into big earnings. And no matter what you put up that sometimes it is enough, it was enough for one day. I think that rising China tensions, you know, we have so much focus on Jensen's talking about how important China is to their business and to AI sort of us leading the AI technology around the world. So this, I don't know, I think it was a little bit ahead of itself. I don't look at it as a structural problem there. And the whole market had a huge run.
- [06:34]
Tim Seymour
Yeah.
- [06:34]
Courtney Garcia
And I wouldn't say it's a structural problem. And I think realistically they did so well with earnings in spite of the fact that they have all these headlines with tariff with China. And then today you get some increased rhetoric again, there might still be some issues with China. And I think yesterday there was some optimism that okay, maybe these tariffs weren't legal or they weren't going to go through there, as we said, legal pushback. But now you're seeing that again. So I think some of that's putting pressure on Nvidia after this really good earnings release. But I don't think it's anything I'd be concerned about just with some of those headlines.
- [07:02]
Steve Grasso
I think your peak Nvidia bullishness, you would be hard pressed to find anything more bullish that's coming down the pike for Nvidia. To Karen's point, you had that run from 90 all the way back up to 142. That's a lot locked and loaded for what's coming down the pike. Think about all the competition amd Google, things that you don't. The hyperscalers are actually the competition because Matt is coming up with their own chip. Google's coming up their own chip, Amazon, their own chip. So I don't see anything tremendously bullish going forward. The stock is sort of rangebound right now. 91 45.
- [07:39]
Tim Seymour
You don't think that there's going to be another deal signed with, you know, Saudi Arabia or some, some party in the Middle east, sovereign AI for instance, sort of, you know, being an exemption in the chip export restrictions. I mean all those things could be massively bullish.
- [07:54]
Steve Grasso
Massively. And I think that's why it ran to 140 and change. I think that was all factored in. I think that was the pop off of the ninety dollar level. And if you're, if, if we're treating this like a trading show, not an investing show. I think you have to sell your Nvidia at this level and wait till it round trips, wait till it gets back down to 100 or so.
- [08:14]
Melissa Lee
I'm not sure what took it back down to the 90s is going to happen again. I mean really, we're at the worst of trade rhetoric. I think sentiment on Nvidia is hardly bullish here. I think there's, it's been kind of a prove it story. I understand it's come back and I understand what they delivered yesterday was reassurance and that should give a lot of confidence. I mean there was no sign of weakness. And yes, gen sanity does seem to be alive and well and yes there are alternative export markets and there is this sovereign AI market and I think it's very important because nowhere have I heard of a fall off in demand and then I would just take it back to a valuation at a time when we're questioning the valuation of the S and P. This is not a place where, I mean, you know, I don't think so. Not on the next couple of years forward. I, we all know the growth isn't going to be there. So, you know, I hear you, Steve. I mean it's hard to say a stock that moves from 90 to 140 hasn't had a big run. But I think the sentiment and I think the positioning of the company is important.
- [09:10]
Karen Finerman
I think they still could have very good growth. I mean we'd always talk about, you know, the cloud service providers, then we talk about Sovereign. But when you look at Dell, they talk about cloud service providers are 50% of their business on prem and companies. Right. We don't really talk about that is 40 and sovereign's 10. So that 40 is growing a lot. And we usually just think about how much are the, you know, the big three or four, whoever it is, Core, Weave, Microsoft, Metta, Google and Amazon, how much they're spending. But there's a whole other giant section that's growing.
- [09:43]
Steve Grasso
Just, just think about the four top clients for Nvidia account for 40% of their revenues and those are the clients that I hear what you're saying. There's replacement, whether it's going to be a sovereign angle to be replacing, but you still have four clients that I don't think are going to be buying as much or as much at this level of cost.
- [10:08]
Tim Seymour
So, but let me throw the trading aspect back at you. You said, okay, this is a trading show, you got to take profits. I get that. But at the same time, what you're talking about is something that happens not next quarter, not the quarter after. Maybe not even the quarter after or the quarter after. I mean in terms of replacing Nvidia or sizable amount of Nvidia GPUs with in house GPUs. That's, that's something to happen over time.
- [10:31]
Steve Grasso
And what I agree with that, can't argue with that at all. But what does the market do? It's a forward pricing mechanism. The markets usually probably pulls forward six to nine months. So plenty of times you look on a chart and then you get to the actual event, you think, oh, that's why it sold off 30%. It's a forward looking mechanism.
- [10:50]
Melissa Lee
Well, I think your point on AMD is a good one, which is also the A in band by the way and, or bland depending on how good I feel about Lyft that day. I mean I just, I think there's a case here to be made for AMD picking up the pace and what we've heard in terms of their ability to deliver a chip that also people were questioned about. I think in a world where, if anything, deep seek has made the playing field more level for other players and also shown that it doesn't have to be Blackwell all the time.
- [11:17]
Tim Seymour
All right, meantime, another potential headwind for big tech Germany considering a 10% digital services tax for large online platforms. Madden, Google, among the names that could be most heavily impacted by. For more, let's bring in Fast Money friend and Deepwater Asset Management managing partner Jean Munster. Jean, always good to see you.
- [11:35]
Jean Munster
Hello.
- [11:36]
Tim Seymour
So how big of an impact is this? As I understand it, other countries already have a digital services tax and Germany is sort of joining in on the party at this point, correct?
- [11:46]
Jean Munster
Melissa? It's about 2 to 5% for a dozen or so countries. So Germany has not have one. So a little bit late to the game. But the news here is that the size of it is a step function bigger. It's a 10% digital tax. It's also on revenue. And that's important because typically you pay taxes on earnings, but in this case it is an impact to revenue. So think of this effectively as, you know, the impact. If it was like a tax rate, it would be about double that number. Talking about like a 20% number. And so that's one piece that kind of sticks out a second is this rift, this continued friction between US Tech and Europe. And we saw it with gdrp, the Digital Management act, and now we're seeing it with this digital service tax. I think what is ultimately at play here is kind of the sense that some of these countries feel like an injustice. And in the case of many of the countries, the Europeans especially, they don't get the benefit of a lot of the taxes because most of those funnel through Ireland. As you know, it's just an awesome tax shelter for big tech. And they're typically paying like a 12% tax rate. And so the news here is that just the size of what Germany is talking about and it kind of has some sounds lit rhymes like what's going on with tariffs too is these big kind of step function numbers. And it makes me wonder, is this just kind of all part of a trade negotiation?
- [13:23]
Karen Finerman
Hey, Jean, it's Karen. Yeah, that was sort of my question, which is was that sort of a, you know, liberation day kind of. All right, throw it out there. 10% of revenue. But really we'd settle for five what? Or a percent of earnings. What would be A number that would be easily absorbable for a meta and Amazon or Google rather.
- [13:43]
Jean Munster
So keep in mind they're paying it today in many countries kind of that 2 to 5%. And so I think that a number the twos go up to fives and the five stays at fives I think probably is something that investors largely would look past. The reason why the stocks didn't do as much today, didn't really react to the news is because I mentioned those other shots that EU has taken at big tech and they have made changes to the business. I mean these taxes have gone up for them, they have made changes to the business GDRP impacts how Google can sell ads, how Facebook can track, but they just keep finding ways to continue to grow the business. And I think that to answer your question, how much would be absorbed from an investor perspective, I think they could probably take it up to 5% and my guess is it is going to go up. I think that there's enough meat here and precedents that's already in place that you're probably going to see some adjustment higher. But my sense is investors will largely look the other way.
- [14:44]
Steve Grasso
Gene, when you look at the percent of revenue that comes from Germany for an Alphabet it's under 3% and for a matter it's just right at 3%. Is a lot of this us just digging through and I get it, the numbers, the absolute numbers are big. Those numbers are $10 billion. But when we really look at it, this doesn't change your thesis on these companies, right?
- [15:08]
Jean Munster
Doesn't change the thesis. There is a piece to this, you're right on those percentage of revenue. There is a piece that the governing body around these types of taxes isn't just a European doesn't just have European influence, it's global. There is this risk that effectively they ratchet it up just across the board. And if you want to take it to the most extreme level, you look at these three companies, 2/3 of their revenue comes from outside of the US and you could build a case where if it goes from 2% to a 5% you get a 3% revenue hit. If all that makes sense. I agree it doesn't change the fundamental thesis of any of these companies. But that's why there is this is worth attention because it does have an effect of potentially impacting many companies beyond Germany and Europe.
- [16:01]
Tim Seymour
So when we say that Germany is the one that's sort of late to the party in terms of any sort of digital services tax is the real. I mean it's surprising Almost that the EU doesn't band together and say we will all or event maybe this is going to happen at some point we will all raise it to 10% because that will give the maximum leverage when it comes to an EU trade negotiation. As opposed to Germany saying 10%.
- [16:23]
Jean Munster
Absolutely. I'm surprised that the fact that Germany kind of went at this alone, I would think that if this was part of more of an orchestrated tariff negotiation, Europe would have maybe done something that was a little bit more organized. And so that does surprise me. But it's still on the table and I think that, you know, they're probably, you know, they're going to float the south. They're going to see what the administration, the White House says about it, Germany's going to float it, they have floated it and now they're going to see what the reaction is and European allies are going to, I'm sure, fast follow.
- [16:57]
Melissa Lee
Gene, to what extent are the Googles and the Metas of the world just going to be negotiating on their own? And in some sense I kind of see this is where it's going. I mean the revenue streams of these companies, they're like many sovereigns and if you think about the influence they have and in some countries more important than others. So I'm tending to believe this is kind of no news because I think these companies are important, but I do think that ultimately the leverage lies in the sovereign. Just curious, but again, one on one bilateral, this is kind of the fallout from trade rancor everywhere. I think sometimes the US Government can get cut out of the middle.
- [17:32]
Jean Munster
I think what we see over the last year, last six months, really since the election, is a different answer today. I think that just given how tech has been positioning around the White House, kind of the influence and the effort that you've seen from their leadership, there is this sense that the companies are negotiating along with the US Government. And if you're going to rewind back to six months ago, a year ago, I'd have absolutely agreed with you. Each of these companies for themselves and they have to defend and debate their position on their own merits. But my sense is that there just seems to be bigger at play. Look no further than Jensen's comments last night. I mean, the White House has having a big impact on his business and he's spending a lot of time there to try to make sure that they're well aligned.
- [18:19]
Tim Seymour
Gene, always great to get your take. Thanks so much.
- [18:22]
Jean Munster
Thank you.
- [18:23]
Tim Seymour
Jean Munster, Deepwater Asset Management. Courtney, does this change your thesis on these stocks?
- [18:28]
Courtney Garcia
You Know, it doesn't change my thesis, but when you look at a lot of the Mag 7 or Big Tech companies, there are a lot of headwinds and the regulatory concerns have been one of them. And I think this is something where you've already seen a lot of regulation happening, both in the US but in Europe. And now you're seeing things like these taxes that are going on top of it, and I don't think those are going to end in the near future. So you're looking at like some higher valuations, you're looking at some tariff exposure. This is just another one of those headwinds that I think is a big reason why you want to stay diversified. So I absolutely want to own these companies. You just don't want to be overexposed. And we find so many people are much more exposed than they have any idea. And we just really try to point that out.
- [19:02]
Tim Seymour
Yeah, it does seem that for years, years and years the EU has been going after big tech in so many different ways. And this is just another step. And every single GDPR was going to be disastrous. Not so much of an impact in the end. In the end. In the end, it was painful for a while. For a while. Now we're through it.
- [19:20]
Karen Finerman
Well, through it. Yeah, yeah, they do, they have just. They throw out. They know they can get a billion dollars for anything.
- [19:26]
Tim Seymour
Right. Without even trying there. Yeah, yeah.
- [19:29]
Karen Finerman
So I do think though, for more for Google than Meta, there is a very large or two very large issues out there that are, well, bigger than this would be.
- [19:40]
Tim Seymour
Right.
- [19:40]
Karen Finerman
It's the antitrust, both antitrust. That's. That's going to be the most important thing to happen to these stocks in a while.
- [19:46]
David Zervos
Yeah, yeah.
- [19:47]
Melissa Lee
I guess I just think about these companies in a place where really one of the other big themes of May was broadening of the market. I, you know, we don't even need to go out there and say it was peak. It's Peak Mag 7 because, you know, I think on some level these kinds of skirmishes and dynamics around regulatory and change in some of the world tech order, I think it's obvious the market is broadening. This is actually good news for investors. And I would also just say that the negotiation stance that this administration has had with China and even Russia, I think there's other parts of the world that are saying, you know, China's kind of gotten what they wanted so far, Russia's definitely got what they wanted so far and we might as well as well.
- [20:24]
Steve Grasso
I think this is healthy. They used to trade like a monolith. And now you see Microsoft up 9%, Metta up 11%. Google, to Karen's point, has a host of issues that they're facing and that's why the stock is down 9% with an Nvidia flat. So I think there's enough room to pick and choose which mega cap tech that you want. I think it's much more healthy for the markets.
- [20:44]
Tim Seymour
All right, coming up, no need to conceal. We are highlighting Alta's big jump after earnings in the profit primer.
- [20:49]
Melissa Lee
Oh boy.
- [20:50]
Tim Seymour
Giving the stock a solid foundation. We got never ending Friday. Come on. And a radioactive trade for your portfolio. Nuclear stocks exploding this month thanks to the chain reaction from Trump's nuclear renaissance. Order the names powering the trade and whether the gains are sustainable. Don't go anywhere past when he's back in two.
- [21:10]
Melissa Lee
This is Fast Money with Melissa Lee right here on cnbc.
- [21:21]
Tim Seymour
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Melissa Lee
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Tim Seymour
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Melissa Lee
Square gets it. Local business can be big business, yet with growth comes complexity.
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Tim Seymour
But whether you're expanding to new locations or building your loyal following, Square meets you at every opportunity. Square helps you handle today and dream bigger for tomorrow.
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Melissa Lee
Go to square.com go fastmoney to learn more. That's sq U-A-R-E.com go fastmoney square. Meet you there. Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a Purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report.
- [23:24]
Tim Seymour
Welcome back to Fast Money. No blemishes to cover up in the latest quarter. That's a good one. Shares jumping nearly 12 as opposed to the other ones which are marginal. Shares jumping nearly 12% on the back of yesterday's earnings report. The beauty retailer topping top and bottom line estimates raising its annual profit forecast. Also saying lower inventory losses and new launches especially of celebrity owned brands helped drive demand at its stores. It was a very strong quarter. They're saying consumer spending really picked up in May. Yeah. Post all the tariff uncertainty traffic was.
- [23:57]
Karen Finerman
The great I mean this is Keisha Stillman, the CEO. She's been there I don't know, 15 years maybe this is her second as CEO. This is a second great earnings. I mean so many good things happen. Comps were great, the margins were good. When you have that top line growth the margins are good and then you leverage, you know your sgna, you get great operating margins. That's happening. They, they took share in mass, they took share in prestige. I'm surprised they had the confidence to put out. You don't need to. Right. You don't need to forecast in this environment everybody sort of gets a pass and so they must feel awfully good. All of that was great. My only concern now is valuation. Right. This is now a high teens multiple. It hasn't been here in a while. Not quite sure what to do. But I mean kudos to them. They did a fantastic job.
- [24:43]
Tim Seymour
I mean analysts are saying that the raised guidance was actually cautious because of what the CFO said. They said oh, it's a pretty dynamic environment in terms of consumer spending. What's going on with tariffs. So we thought it'd be safe to safer to take a cautious approach to guidance which leads one to believe that the raise guidance may be a conservative race. Super confident. Yeah.
- [25:04]
Courtney Garcia
Yeah. And I think it's great to see they're actually taking share from their obvious competitors like a safety for but even as Amazon or Wal Mart starts to get more into beauty the fact that they're really able to continue that when you're ordering everything on Amazon and Wal Mart the fact they're still going to Ulta is I think a really strong sign. And the fact that consumer has still been picking up and you actually just saw this with the consumer sentiment numbers is people are getting a lot less pessimistic about the economy. I don't know if they're optimistic yet, but definitely not as bad. But you are seeing that savings rates are going up. So people are still cautious on their spending, but they are still spending at Ulta. And I think that's actually a really positive sign.
- [25:38]
Steve Grasso
They have zero international exposure. Right. So I think that probably goes into a little bit of no headwinds for them of the current environment that we're in for the rest of the market. And if you go back to October 2023, stock was at 375, gapped up to 470ish in January of 2024. Then it was a solid base and then it ran another 100 points higher. So I think you're good here.
- [26:01]
Tim Seymour
Yeah.
- [26:02]
Melissa Lee
Yeah. I mean, Courtney's right. I mean, I'm getting my beauty at Wal Mart these days. So I mean, it shows.
- [26:09]
David Zervos
Wow.
- [26:09]
Melissa Lee
I did set myself up.
- [26:11]
Tim Seymour
Totally did. I was waiting for somebody to come in.
- [26:13]
Melissa Lee
It was intended to be, but I, part of what was interesting about this is the new brand launches and where they're, they're incubating new brands. I mean, they, they are looking to stay on top. They are looking to stay in the lead. They're looking to actually have the margin associated with house brands. And I think that that's part of what works for the multiple.
- [26:30]
Karen Finerman
The multiple given the move in the stock today, the multiple is actually north of 20 now.
- [26:34]
Tim Seymour
So not as bad.
- [26:35]
Karen Finerman
No, a little higher than I thought.
- [26:36]
Tim Seymour
Higher.
- [26:37]
Karen Finerman
Yesterday was 18 and change.
- [26:38]
Tim Seymour
Oh, I didn't.
- [26:39]
Karen Finerman
But the stock moved up. Yes.
- [26:41]
Tim Seymour
Yeah, yeah. There's a lot more fast money to come. Here's what's coming up next.
- [26:45]
Melissa Lee
The chain reaction pushing the nuclear trade to new heights. More on the radioactive run and whether the gains in these names are sustainable. Plus, Jamie Dimon ringing some alarm bells. The cracks he sees in the bond market and the impact it could, could have on equities, the economy and your money. You're watching Fast MONEY live from the NASDAQ market site in Times Square. We're back right after this. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the Now It Pays to Discover. Learn more at discover.com creditcard based on the February 2024 Nelson Report. I started the club for you, the.
- [27:48]
Steve Grasso
Investing Club is about allowing you to.
- [27:50]
Jean Munster
Be in control of your own money. You want to be a better investor?
- [27:54]
Tim Seymour
Try join the club.
- [27:56]
Melissa Lee
Join the club and save@cnbc.com joinjim terms and restrictions apply.
- [28:03]
Tim Seymour
Welcome back to FAST Money. Uranium stocks closing out a massive month buoyed by the Trump administration's moves to boost a nuclear renaissance in the US the URA ETF having its best month since 2020. But are these gains sustainable? Our Pippa Stevens has got more on this. Pippa.
- [28:18]
Megan Cassella
Hey, Melissa. So the stocks did dip today, but still a big May for nuclear. First, the industry was a relative winner within energy from the House's reconciliation bill and then The White House's four executive orders aimed at quadrupling nuclear capacity by 2050 really turbocharged the rally. The NLR is having its best month on record and the URA gaining 27%, pacing for its best month since 2020. Now retail investor is also getting in on this trade, snapping up shares of the URA at the fastest rate since January. That's according to data from Vander Research. Small modular reactor companies new scale and Oklo, the biggest winners, up 93% and 122% respectively in May, begging the question of whether the stocks are simply now stretched, especially since neither company has actually built a reactor. Centrist another big winner this month. They're producing Hailu for the Department of Energy, but not yet for commercial customers. So the market is clearly viewing the federal support as a positive. But as think tank Third Way put a caution is warranted since the eos will be nothing but talk if they aren't backed up by factors including real funding and robust staffing.
- [29:23]
Tim Seymour
Melissa Paper for New for New Scale and oklo. Neither have built reactors, but they do have contracts right to build a reactor. So they are sort of, you know, they have those revenues in the pipeline, so to speak.
- [29:36]
Megan Cassella
So they're in the works. But NuScale is definitely further ahead than OKLO here because remember, New Scale is the only company that's had a small modular reactor approved by the NRC. That was back in 2020 and then actually this week that was for 50 megawatts. This week they got their reactor approved for an upsized 77 megawatts. They had started construction on a project in Utah, but then that fell through as the costs rose. OKLO submitted an application with the NRC for their Aurora reactor that was denied. They are now in talks once again with the nrc. They said that their application was denied because of issues during COVID So an important distinction There both companies do have revenues in the pipeline, but I would say NuScale is definitely further ahead here.
- [30:19]
Tim Seymour
All right, paper. Thanks. Paper, Stevens. Tim.
- [30:23]
Melissa Lee
Well, the valuation argument against uranium stocks is, is easy. They're really expensive. And if you look at Cameco ccj, which is the one I own and you know, and I own, I own some Sprott Uranium Trust, I just think that the valuation is, is not equating with where the earnings are. Now. The dynamic here is I think there are people that believe that there are going to be major squeezes in the spot uranium market. Spot spot uranium is actually traded kind of lower. It's, it's had a little bit of a bid, but if you look at it year to date and if you look at it even in the last six months. But I think this really does come down to execution on, on where they are with their existing production and also how disciplined they will be in contracting existing. And I think that's part of the story here. So a lot of volatility, but this is, this is a five year trade. It's been a great five year trade for the last five years and I think it's going to be as good for the next five.
- [31:14]
Courtney Garcia
Yeah, I agree with that on the valuation, but I do think longer term this is a story that's going to play out because if you saw anything from the Nvidia earnings is AI demand is not going anywhere anytime soon. And so when you're looking at AI demand and data centers, there is a huge need for electricity and nuclear is really the way to solve that. And especially if you are seeing this administration is more optimistic or you know, friendly to getting these actually through and getting them regulated, that is really the biggest hurdle they have. It's not demand that's the issue. So that's going to benefit them is absolutely going to be a bigger longer term story.
- [31:45]
Steve Grasso
All of these stocks, when you look at them, they all are in danger of double topping and failing. So CCJ Smart new scale. That one actually shows the most constructive technicals because it broke out from that former high. But I would wait and to Tim's point, I think they're all a little bit over their skis right now.
- [32:05]
Melissa Lee
I'd wait.
- [32:05]
Tim Seymour
Coming up, Jamie Dimon raising a red flag for the bond market. Why he thinks a crack is forming and what he thinks you should or shouldn't do about it. Don't go anywhere. More fast money into.
- [32:19]
Melissa Lee
Missed a moment of fast. Catch us anytime on the go Follow the fast money podcast forecast. We're back right after this.
- [32:35]
Tim Seymour
Welcome back to FAST money. Major indices flat today but closing out a month of gains. The Nasdaq up nearly 10% in May. The S&P 500 rising more than 6%. Both seeing their best month since November 2023. The Dow is also up nearly 4%. To some movers today, CBS and Cigna filing two separate lawsuits looking to overturn an Arkansas law banning PBMs from owning or operating pharmacies. CBS has said the law would force them to close 23 locations in the state. And shares of regeneron plunging about 19%, its worst day in more than 14 years after a late stage study of the drugmaker's experimental COPD treatment failed to meet targets. And shares of NP Materials climbing today as Trump blasts China for violating trade agreements has been your final trade a number of times, Steve.
- [33:19]
Steve Grasso
Yes. And it's going to be if you see where it traded to, it traded to approximately $30. And then when negotiations with China started to be a little more softer, the stock came in by a third. You're going to see this conversation just get volatile then peter out and the stock is going to trade right with it. So I would take profits up 10%.
- [33:40]
Tim Seymour
All right. Well, JP Morgan CEO Jamie Dimon predicting trouble in the bond market. Dimon Speaking today with CNBC's Morgan Brennan at the Reagan national.
- [33:50]
Melissa Lee
You are going to see a crack in the bond market. Okay. It is going to happen. And I tell this to my regulators, some of who are in this room. I'm telling you it's going to happen and you're going to panic. I'm not going to panic. We'll be fine. We'll probably make more money. And then some of my friends will tell me that we cause we like crises because it's good for JPMorgan Chase. Not really.
- [34:14]
Tim Seymour
Classic Jamie. For more, let's bring in CNBC contributor David Zervos. He's Jefferies chief market strategist. David, great to have you with us. Do you think that we will see that crack in the bond market? I feel like you're not panicking kind of guy, but should we be concerned about that?
- [34:29]
David Zervos
Yeah. You know, you've had me on a number of times recently, Melissa, trying to not get people to panic about tariffs. And tariffs seem to be consistently moving in a non panicky way after the initial panic. And I think the same story in the bond market for me and the whole idea that we're going to have a Liz Truss moment or some sort of back up in yields because everybody's scared of holding U.S. treasuries. I just, I don't buy it. I think you can tell stories where the firm premium is a little bit higher and I like that story. We've steeped in the curve a lot this year and that makes sense to me. But the idea that we have some major crack does not seem like a reasonable story to me.
- [35:06]
Melissa Lee
I was sitting. Hey, it's Tim. I was sitting next to you on the desk and I remember your calm. And I think, I guess the question I have for you is where is your fear moment here for this market? And again, there still can be calm. But what is the thing that worries you most here, especially as you think about strategically, a market that has come back and roared back to where we were.
- [35:29]
David Zervos
It's funny, Tim, I remember your comment because I went on a little diatribe and you go, wow, that felt pretty good.
- [35:35]
Tim Seymour
I think we were in the middle.
- [35:36]
David Zervos
Of the April, second week of April, and that was what I was trying to do with a lot of our clients, talk them off the ledge, even some of the most sophisticated. And it was a complicated time. There's not a lot that really makes me nervous in terms of policy and in terms of geopolitics. I'm always nervous because I just, I think those events are not anything we can ascribe easy probabilities to, but they're there. There's wars going on, there's, there's potentials for changes like what we had in Covid era. There's always those. But I do feel like we have a lot of insurance. We have a central bank that's got rates over 4% if something goes horribly wrong. We have a lot of insurance and monetary policy that I think could be applied quickly and judiciously, even if the politics might initially get in the way of that. And so my worries are probably pretty, pretty low, consistent with where they've been for a while.
- [36:31]
Karen Finerman
It's Karen, thanks for being on. You generally look like a guy who's not super worried about a lot. But let me just ask you, what do you think about the Fed? Do they need to do anything? If you were Jay Powell, what would you be doing?
- [36:45]
David Zervos
Well, you know, Karen, I'm not a big fan of saying what I think the Fed should do. I'm like, I don't. That doesn't make my clients any money because I'm not in control. So I try to predict what I think they will do. I think they're going to be a little sticky. I think they've been A little sticky. I thought Jay was going to play ball with the President a little more friendly pre April 2nd. And I think he, like many others saw April 2nd and went, oh my God, I can't have a red jersey on. This is crazy stuff. And he backed away. And, and the markets really saw that in the second week of April when the Fed didn't respond to all the, the madness in the bond markets. And ultimately I think the Treasury Secretary is the one who stepped in and stopped it. But I will say if you, if you push me, Karen, and you say what do you think you should be doing? And I think there is a CNBC group that I'm part of that we put our, what we, what we would do if we were in the, in the FOMC or on the fomc. I would be cutting. I'd be cutting pretty significantly. I don't think there's a great storyline here to have rates 200 basis points above neutral and I think neutral is still somewhere in the low to mid twos. We've got inflation all the way back. We had another great PC report and there just doesn't seem to be a great story for that. I think you're playing with fire and you don't need to.
- [38:03]
Steve Grasso
David. That's where I was going to go with PC and cpi. It does seem like mission accomplished, right? So why not just take the victory and take the lap and move on? Is it. Obviously the dual mandate is what's getting in the way here, but I think they've done enough to check the box.
- [38:21]
David Zervos
You know, I think the fact that he got rid of QT early, he did that in the end of Q1, that seemed like a nod to the new administration, like he was going to play ball with them. And then I said tariffs just got the Fed twisted up with typical D.C. politics where they just don't want to be seen as enabling behavior that, that people consider to be reckless. Whether that's true or not, I don't believe it. I think it was just negotiating tactics. But I understand where others come from. I guess where I would come out on the, on the, on the debate for what they're going to do is I think Jay's got one year left. He wants to go down in the history books as the guy who combated the great inflation without a lot of job loss. And that's a good story for him to spend. There'll be people that say he started the inflation, but I think that's a harder because every G7 country had the same amount of inflation. So I think he's going to be a little more stubborn and that'll be slowly coming out of the bond market because forward guidance will lose Jay, and it'll move to whoever the new candidate is and we might learn about that new candidate within the next three to six months. As Secretary Bessen has said, they're interviewing for the new Fed spots probably by the summer and certainly the fall. So we're going to hear from, you know, whether it's, you know, there's lots of horse trading on these. Is it Kevin Hassett, is it Kevin Warsh, is it others who have been in the mix before? You know, I think we're going to start to hear a different forward guidance that really isn't Jay Powell anymore.
- [39:55]
Tim Seymour
David, last time you're here, you said that the markets were massively overplaying tariffs, which, which was in, in hindsight the right call. So have the markets have processed in sort of the volatility surrounding tariff headlines, has the market also processed the economic impact of the tariffs which have yet to really manifest themselves in the hard data? And I'm assuming that there will be some impact in the hard data, unless you think that there will be no impact in the hard data.
- [40:24]
David Zervos
So, Melissa, great question. And let's decompose it into the two parts that you asked. The first part is how are we thinking about this? I came from the camp of this is a tactical art of the deal, classic Trump style negotiation where he's gonna go big, be a little crazy, try to dislodge the opponents and get them to accept something that actually would have been hard to get without going crazy at first. And I think many people did not see it that way. Many people thought this was some sort of actual true ask in terms of the starting point from negotiation. And it just didn't fit the typical pattern of what we've seen with this president before. So I think if you step back and said, okay, this is all tactics, this is to try to drive a fairer trade outcome, to get people to come to the table, to get them to reduce their tariffs, their non tariff barriers, maybe strengthen their currencies like the Taiwanese have done, almost 10% since negotiations have started and the dollar itself has weakened significantly on a trade weighted basis. All of that was part of the rebalancing story. And I think that's largely played out and the market's more accepting of the view that I had, whether there's an economic fallout. The second part of your question, Melissa, is a harder question and it just depends on where we land. There could be a really positive impact because people just say, okay, we're done, no tariffs, we're out. We don't want it. We're going to let you sell cars and sell beef and sell soy. Come on in. We just want to make sure we have the US Markets open for business. We're scared we're going to lose that.
- [42:02]
Melissa Lee
Done.
- [42:03]
David Zervos
And we're going to strengthen our currency a little bit so we aren't playing games with competitive devaluations and unlevel playing fields. And all of a sudden it's actually a bigger pie that we're all sharing for global economic growth. And that's one story. And the other story is, you know, you get a little inflation, you get a little stagnation, you get a little because the tariffs stick around during that negotiation process longer than we would hope for.
- [42:29]
Tim Seymour
Right. David, great to have you. Thank you. David Servos. Coming up, Wall street still binging on Netflix. The price target hikes streaming in and where our traders see the stock heading next. Don't go anywhere. Fast Money is back in two. Welcome back to Fast Money. A couple of bullish calls on Netflix today. Evercore raising its price target on the streaming giant by 200 bucks to 1 to 1350. Bank of America upping its expectations to 1490 from 1175. Analysts citing strong subscriber growth, advertising opportunities and newer live content. The bullish note comes ahead of Netflix's Tudum 2025 event this weekend where the company will announce news about upcoming content now specifically for Evercore. They did a proprietary survey and basically found that a lot of folks liked live and would be more apt to continue being a subscriber if more live events were offered.
- [43:29]
Karen Finerman
And pay up, and pay up $24.99 a month. I think they talked about, I mean it's amazing what, how Netflix just keeps growing and growing, growing their audience and revenue and then ad supported tiers, growing advertising, all of that. I've always had trouble with the valuation. I am long I've sold some 1200 calls against it. Trade that probably will would not work out great. Again, it's just the valuation but it's, it's so they're so far ahead it's worth it.
- [44:01]
Courtney Garcia
And I think the valuation is also my concern. It trades like 45 times forward earnings and like 34 is more like it's five year average. I mean it's not only a premium to the market but itself. And I think realistically it has a pretty mature business here. In the US most people do subscribe to Netflix already here. So I think where the growth will come from is either international, you're going to see more ad revenue or increase in prices. But I think you do have a lot of a mature business. They have a higher bar. So with that in the valuation, I wouldn't be jumping in here.
- [44:27]
Tim Seymour
All right, coming up, the teetotaling trade. Alcohol stocks going flat as drinkers go dry. Can the names get their buzz back? That is next. More fast and too. Welcome back to Fast Money. The tap appears to be running dry on alcohol stocks. Constellation Brands, Boston Beer, Diageo and Coors closing lower again today. The stock's also down significantly for the year. But one major beer stock bucking the trend, Anheuser busch surging almost 41% this year. Bud is investing heavily in the zero alcohol beer market which has been gaining popularity as consumers keep dry. January going and going and going. So is alcohol becoming the new tobacco stock? That's what Grass has said on the call today.
- [45:14]
Steve Grasso
Yeah, I think the younger kids are drinking more non alcoholic beer and they're also drinking more CBD infused seltzers and even thc. But the surgeon general is definitely taking a hawkish approach similar to what tobacco the way they did with tobacco. So there's warning labels now on the back of alcohol, but that might just get ratcheted up to causes cancer, seven kinds of cancer. That's not going to be a great tailwind to this whole whole entire sector.
- [45:44]
Melissa Lee
Look, I think there is absolutely a trend that's going on in with younger people. I also think there's a lot of cyclicality of this. I think some of it's overplayed. I Steve's right though. I mean in the cannabis space, hemp derived THC drinks are the hottest segment by far and are in a national footprint. And there's still a lot to be worked out with that. I guess. I look at Diageo as an opportunity. I think the Bud move, some of it is think about where Bud came from. Again, some missteps in terms of where they had a marketing strategy. There has been a lot of consolidation in the beer space. I think the spirits brands, Constellation and Diageo, world class companies and I think it's an opportunity.
- [46:22]
Tim Seymour
Up next, final trades, final trade time.
- [46:33]
Melissa Lee
Tim, it seems like the Chinese stocks are once again in the outs along with the sentiment. I think Baidu of all of them right now. What's most oversold and the bottom of a range here. Interesting.
- [46:43]
Tim Seymour
Karen?
- [46:44]
Karen Finerman
Yep, Ulta. I'm going to sell some upside call.
- [46:46]
Courtney Garcia
Courtney we talk about nuclear. I like Constellation Energy. I think long term this has a.
- [46:50]
Steve Grasso
Play take profits Netflix.
- [46:51]
Tim Seymour
Thanks for watching Fast. Have a great weekend. Mad Money starts right now.
- [46:55]
David Zervos
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of cnbc, NBC.
- [47:01]
Melissa Lee
Universal, their parent company or affiliates, and.
- [47:04]
David Zervos
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.
- [47:15]
Melissa Lee
A particular strategy, but only as an.
- [47:17]
David Zervos
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.
- [47:25]
Melissa Lee
Warrant its completeness or accuracy and it.
- [47:27]
David Zervos
Should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer not sure if.
- [47:36]
Megan Cassella
You have the experience to start your dream job? Good news these days it's the skills that count. Udemy can help you get those in demand. Skills? Want to be an AI mastermind? Learn with us Game Developer. We've got you covered. AWS Certified Cloud Practitioner. We can help you prep. You'll learn from real world experts who love what they do so that you.
- [47:58]
Melissa Lee
Can love what you do.
- [47:59]
Megan Cassella
Go to udemy.com for the skills to get you started and get set for your dream job.