← CNBC's "Fast Money"
CNBC's "Fast Money"
Nvidia’s Rough Week… And Why Users Start & Stop GLP-1 Drugs 1/31/25
00:43:51
Nvidia wrapping up a rough week, as the chip giant enters bear market territory. The concerns surrounding China’s DeepSeek AI model, and if the chip crunch has our traders rethinking tech’s leadership. Plus.. weight loss drugs taking the market by storm, and a new study is diving deeper into why consumers are starting and stopping usage. The factors contributing to their decision, and what it means for the entire obesity drug space. Fast Money Disclaimer
Loading summary
Transcript129 lines
- [00:00]
Melissa Lee
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.
- [00:31]
Dan Nathan
Learn how to use AI to be more successful with CNBC make it's new online course.
- [00:37]
Courtney Garcia
We'll give you examples that can help you master AI tools.
- [00:41]
Dan Nathan
Go to CNBCmakeit.com AI and register now.
- [00:49]
Courtney Garcia
Live from the NASDAQ marketsite in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Under pressure. Nvidia shares sinking over 15% this week as deep seek and trade fears roil the semi sector. Is this finally the start of the great rotation out of tech? We'll debate that. And a new study into the reasons patients stop and restart using weight loss drugs. We'll talk to the lead author to find out what it could mean for the GLP1 market. Plus, shares of Deckers get decked after earnings. The chartmaster lays out his potential breakout stars. And the NASDAQ 100 turns 40, how the index has changed over the years and what it says about investor appetite. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Courtney Garcia, Dan Nathan and Carter Braxton Wirth. We're going to get to the Nvidia sell off in just a moment, but we do want to start with a sweeping announcement from the president that sent stocks sharply lower late in the session. Trump confirming the tariffs on Canada, Mexico and China will go into effect tomorrow in promising levies are coming for chips, energy and metals. CNBC's Megan Cassella's got all the latest. Megan?
- [01:52]
Megan Cassella
Melissa, we just finished hearing from the president from the Oval office. Spent about 30 minutes talking to reporters and clarifying his views on all of these points, saying that yes, those tariffs will be taking effect beginning tomorrow. It's going to be 25% on Canada and Mexico, 10% on China. He says it's going to be entirely because of the flow of fentanyl. He also said, quote, we are not looking for a concession suggesting that at this point there is nothing left that any of the three countries could do in order to escape those tariffs taking effect within 24 hours. He also said the tariff rate could increase substantially, but it also could not, leaving the door open for some changes there. He also said that on Canadian crude oil specifically, he would probably reduce that tariff rate to 10%. All other Canadian goods will see a 25% tariff, but Canadian crude is likely going to see only a 10% tariff. He then spent a lot of time talking about many more sets of tariffs that he is considering that are likely to take effect in the future. So specifically on oil and gas, he says around February 18th they're looking at putting tariffs on oil and gas from all countries, it sounds like. He also mentioned chips and things associated with chips, steel and aluminum higher than he imposed in the first term. He also said copper, but said that one would take a little bit longer, presumably because it requires an investigation. And then he spoke about various forms of medicines and pharmaceuticals that he wants to see tariffs on as well. He also was asked whether he's thinking about putting tariffs on all goods coming in from the European Union. And he said absolutely. He sees a lot of issues with that, trading relationships with the eu so more to come on that front as well. And then finally he was also talking a little bit about any reaction to the tariffs. He says that he's not concerned about market reaction to these tariffs. He says tariffs don't cause inflation, in his words, they cause success. And that while there could be some temporary short term disruption, people will understand that. Melissa so a whole lot there to sift through on tariffs. And then just one final headline to bring you. Since we just hit 5:00pm CBS News is reporting that Trump officials are putting a pause on most federal government websites beginning now at 5pm we are seeing some beginning to come down. Presumably that's so those agencies can begin to scrub their websites for anything mentioning diversity, equity and inclusion. So more to watch on that front as well. Melissa.
- [04:04]
Courtney Garcia
Megan, thank you. That was a lot. Megan casella from Washington, D.C. by the way, Trump also said we'll be doing something very substantial on tariffs with the European Union. So we are seeing sharp reactions in the currency markets to a lot of these headlines. Peso, Canadian dollar as well as the the euro taking a hit on the back. But what's your initial take here? We sort of knew this was going to happen. We didn't know it was going to happen in quite this way.
- [04:27]
Tim Seymour
We didn't know.
- [04:27]
Courtney Garcia
Here we are.
- [04:28]
Tim Seymour
We didn't know. Saturday we heard March 1st, March 1st with the headline this morning for Canada and Mexico. Actually we started to digest that yesterday. China, we've, we've had this number out there, 10% on some levels already been in the market. And Already kind of a relief. The concept of this being to reverse flow of, you know, illegal immigrants and illegal drugs is, you know, one way to get going on it. I mean, there's a lot of different rationale out there from the administration as to why these things are happening. Ultimately it's really about a competitive balance that they believe anyone who's in deficit, we're in deficit too, should be tariffs put on them. It's interesting to think about the currency markets because going into this you can make an argument that the US dollar was already strong and that there was a lot of pressure actually potentially on multinationals in this country because of the stronger dollar. We started to hear about that in earnings season. You know, when I hear that, at least at this stage of a cycle, it doesn't really bother me as an investor for a lot of these companies. But for the European Union, which, which had a 25 basis point cut this week, ECB, if anything was rumored to, maybe they could go more. They will go more. I think we're breaking parity here. And I think, and I think it will be, just to be clear, I think that will be a mitigating factor on inflation. I think a stronger dollar certainly will have more buying power and be helpful. But we don't really know what the impact of all this. And it's just interesting to see how quickly tariffs have come back into the market, which closed on the lows today. But think about where we were a week ago.
- [05:49]
Dan Nathan
Yeah, so, you know, he said that he doesn't expect the markets to be affected and that it's not going to affect inflation. I'll just make this point. We just got this GDP number at 2.3%. This is after two consecutive 3% GDP prints, you know, quarterly. And so the economy was kind limping in to the end of the year. I think expectations were higher than that for Q4. So one of the things we can be fairly certain on, if these sorts of tariffs stay on some of these key industries, it is going to weaken economic demand here. It just will. And so at the end of the day, you know, the President uses the stock market as a report card. But if the economy starts to weak weaken, the S and P is going to start to anticipate that.
- [06:26]
Carter Braxton Wirth
I mean, the dollar obviously is such an important thing. The sector, of course, of the area the market has the biggest exposure is tech. I mean, bar, bar none. Right. So obviously the big consumer staples, the big energy names, but technology is the highest sort of exposure to a weaker strong dollar. And it's no nonsense when the S and P is doing one thing but the tech now down on the year, you've got semi struggling. And I think a lot of it has to do with not only the great appreciation that preceded this start to the year, but the dollar.
- [06:55]
Courtney Garcia
Right? Yeah.
- [06:56]
Melissa Lee
And I think a lot of this too, people were wondering, are the tariffs just going to be negotiation tactics or are these actually going to come on? And clearly we're seeing these are coming on. And this is why the bond markets have been pricing in inflation. I mean, this, whether it's tariffs, whether it's tax cuts, I mean, a lot of these are inflationary policies. And that is why markets are concerned about where inflation's going. So they're optimistic about deregulation, they are worried about inflation. Markets are kind of up and down as they're trying to figure out where that's going to go. But I would expect that's going to continue to affect the markets as this news continues to come out.
- [07:24]
Courtney Garcia
I mean, we've been thinking about oil and gas and commodities and so on in terms of the impact of tariffs. But when you think about pharmaceuticals, you know, you think about the inputs into drugs that are manufactured here in the United States, but, but the inputs come from abroad. That's where you start thinking maybe we have not yet really fully digested the impact of tariffs and the ripple effects that can have across several different industries.
- [07:47]
Tim Seymour
Well, and that's it. And we hadn't really heard a whole lot about the impact for, for health care, but certainly for pharma specifically. And so that's part of where the market's uncertainty around really what's going to, what's coming next, what kind of teeth will there be attached to this? You know, the other side of what we were hearing before we heard about starting Saturday with Canada, Mexico, is that okay, there'll be some offsets. There's going to be a lot of trading going on between the lines and that, you know, maybe the headlines will be busier than, than actually the reality of this. So I get back to markets which today also had to digest a PCA PC number, which most people know is a big, a big number for the Fed to fall, which came in significantly higher against all relative than expected. So to the extent that inflation is something that we're still fighting, we had a Fed this week that pretty much kind of said as much. They, they, they argued that the change in the language was really just to clean up the statement a little bit. But, but the reality is inflation is still an issue Here and markets, especially the part of the market Carter's referring to the tech world. I mean let's be clear, mega cap tech should be the most insulated from inflation here and that what's is what seems to be struggling.
- [08:50]
Courtney Garcia
Yeah, let's talk about that here because Nvidia really closed out a rough week here. The stock unable to rebound from Monday's deep sea scare. It is down nearly 16% since then. That is its worst week since September 2022. Nvidia now off more than 21% off record highs hit the start of the month putting it firmly in bear market territory. But while tech and semis put pressure on the broader markets, there were some winners here on the week. Communication services, Staples, health care, financials posting solid gains. We saw this on Monday too. We saw good breadth in the market outside of technology. So is this the start of a rotation that that may stick here? Carter?
- [09:24]
Carter Braxton Wirth
Well, the one thing about communications is they change that we know is AT&T H rise of what they got in there as Google, Netflix, those are tech. So certain tech, let's just call it tech is holding up well, whereas semis and AI and some of this stuff is struggling. So very mixed bag on that score. But it is important that the things that really led us are starting to churn and struggle.
- [09:47]
Courtney Garcia
Yeah. What do you make of this sort of rotation that we saw this week?
- [09:51]
Melissa Lee
And this is really what we've been looking to do last several months. I don't necessarily think that there is some downturn that's coming in. Tech or I think some of this is happening with DC is probably a little bit overblown here. But I do think you want to be looking at those other areas of the market. You want to be looking at things like banks and things like cyclicals. I think a lot of those are going to continue to do well here. And I think when you look at AI, especially with the news this week, if it really is as cheap and as quick to create as they're saying, and I know there's a lot of questions about that, the way to play that is with the other 493 stocks in the SB 500, if it's going to become much more accessible to these other companies, it's going to really increase productivity, it's going to make them much more efficient. Yes, it might be a longer term play, but I think it's going to be a good thing for the markets in the long run. But the overall markets, not just those seven companies.
- [10:33]
Courtney Garcia
And by the way, it's not just deep seek on Nvidia, it's tariffs. Right. So if they have faced further curbs in terms of the kinds of chips they can sell to China and their revenues will be limited in that respect. On top of the deep seek scare, I mean there are a couple of reasons why you might be scared.
- [10:47]
Dan Nathan
Yeah. And before deep seek, we're already starting to wonder if there was an overbuild as far as infrastructure is concerned. A lot of these companies that actually need the chips and are building out the data centers, I mean they had been ordering fairly aggressively. At some point you're going to see a drop off in that orders. We've already seen deceleration of growth in Nvidia. I mean a lot of folks have been waiting for this in Nvidia. And again down what, 20% you just said from the highs, you know, go back to last summer into early August, Nvidia was down 35%. So this is kind of the run of the mill sort of move for Nvidia. Except this time it really does seem about something fundamental. The last time it was technical, it was momentum driven, it was very crowded. I think since then we had some of the guys like Marvel and Broadcom join the party because some of Nvidia's largest customers have been contracting with them to make specialized chips for products and services. That like that was always going to happen. Right. What we didn't see is AMD and Intel joined the party. Right. So there's the semi trade was very, very narrow. The last thing I'll just say is that, you know, Microsoft and those results, I mean we haven't even mentioned that yet. Down 6%. It's been a massive underperformer. Microsoft was one of the early beneficiaries in the stock market in early 23 from their partnership with OpenAI. So think about everything we learned here. Maybe these hyperscalers don't need as many chips to train the models and make new models. All right, so that happened this week. Then we have a situation where OpenAI and Microsoft, their relationship has been fraying a little bit. OpenAI is a big customer of Microsoft's Azure cloud. Right. And so at the end of the day, you know, there's some, definitely some push and pull that last thing, Open airs in the market to raise tens of billions of dollars. Right now that SoftBank is supposedly going to kind of lead. So a lot of things a little bit for everybody. To me it really feels like this trade is cooling a little bit in.
- [12:29]
Carter Braxton Wirth
Terms of rotation, which is obviously always A part of markets trying to figure out where you can win or deliver alpha. The biggest single rotation year date of course is is Europe. Right. We and that's value. Right. So you're Talking about the stocks 600 in Europe are equivalent S&P is a 15p it's up 7 and a half percent. The DAX, the big player Germany's up 8 and a half and so there's very little tech there, there's very little the very little anything except big heavy industrials, banks, energy stocks that have lagged and money has gone there. That's the biggest single rotation going on.
- [12:59]
Tim Seymour
I agree that I run an international etf. I mean I see the European banks with I think balance sheets that are as good as the American ones. People think that Europe's a mess. It is in terms of the public side of it. But again the private banks, even though you can argue Deutsche bank is a quasi sovereign, the end of the day ECB is probably still the place you'd be most worried. European banks are paying higher divs, they're cheaper SAP, Siemens. I mean think about the industrial spot across Europe which is underperformed over the last couple of years. Remember the underperformance of the Mag 7 or at least the top five tech companies in the world is partially a partially at least what was a big impact to the headwinds on investing around the world? Again there was a crowding out effect. So I like that call. I continue to think that you could look all the way back to March of last year and say semi's peak there. I mean outside of Nvidia you could look at AMD. I mean AMD has hurt a lot of investors over the last 18 months. It happens to be the A in band by the way. So it may be a different year. But anyway I think it's a fascinating time. You wanted broadening. You're getting it.
- [13:58]
Courtney Garcia
All right. Meantime, while stocks ended the month on a down note, our next guest says the markets and Fed are overly sanguine on growth and overly pessimistic on inflation. Jack Genesee woods of Natixis Investment Managers joins us now on the fast line. Jj, great to have you with us. A week ago we didn't have all these, this cascade of tariffs coming down the pike on, on Saturday we didn't have the deep sea scare. Does your view of the market change?
- [14:23]
Jack Genesee Woods
You know I think you still have to look at the underlying dynamics here and the fundamentals of the US economy are still very strong. You know we're looking at nominal growth Coming in probably closer to 4% for the full year, slowing from 5% and that's still above trend levels. And so when you think about that backdrop, that's still pretty good for the corporate earnings here and that's still where it all comes down to. So look past a little bit of this geopolitical noise and really the underlying story here is the foundational economic backdrop for the US Economy is still pretty robust.
- [14:53]
Courtney Garcia
I completely get that. You can say it's noise. I mean, the ExxonMobil CEO on the conference call actually said, you know, tariffs are just speculation that it's been driven higher by the media. So there is that point of view. But, but corporate earnings in some respects, I mean, it's a, it's backward looking and granted the guidance is forward looking. But right now the snapshots that we're getting is the reflection of an economy that is a capsule in time, that is no longer the economy we now have with tariffs in place. How do you interpret the impact of tariffs even if it is in the next three to six months? Because the next three to six months impacts the guide that companies are giving now as well as a guide for the rest of the year.
- [15:30]
Jack Genesee Woods
And that's going to be a wild card, I think, going forward. Right. Because you know, we've heard starts and fits. Right. On day one we were supposed to get tariffs. We didn't. Then we were going to see Columbia being tariff. Well, they backed down on that one. You know, then it was, well, March 1st, now it's February 1st. So you know, a lot of the, this is still a lot of headline news coming out. So it's really difficult, I think, to really adjust portfolios here because the bottom line, tariffs are still probably going to be a negotiation tool. You're going to start high, ratchet it back down until you get something. But that number, if we end up having to implement tariffs, probably going to be something much lower and maybe less impactful. So I hate to say it, but you almost have to be reactionary with some of this stuff rather than proactive.
- [16:09]
Melissa Lee
And Jack, this is Courtney here. Thanks for coming. I'm curious about your outlook on inflation.
- [16:14]
Tim Seymour
Right.
- [16:14]
Melissa Lee
So you actually mentioned here that people are overly pessimistic with inflation. And I'm curious here if inflation kind of stays where it's at. We have this higher for longer rates are not going up and not coming down from here. Do you see that as problematic or can the economy continue to do well with where rates and inflation currently are?
- [16:29]
Jack Genesee Woods
You know, I think we're in an okay spot. You know, I certainly would like to see rates continuing to come down something, you know, closer to the, the low fours or the, you know, the higher threes with the 10 year. But you know, when I take a step back and look at the inflation backdrop, you know, I think the big picture level says it all right. And we're seeing the labor market as a result. You should expect to see wage growth continuing to come down and then, you know, from that perspective, where do you get the demand pull from? And then you start looking at what's going on with regard to housing. You know, you look at all the real time indicators that continues to come down. So between those two things, I certainly have a hard time seeing inflation reaccelerating. Maybe it comes down slower than expected, but I think it still heads lower. And that I think, you know, basically plays to the idea that maybe we should be expecting more cuts than hikes in here over the rest of 2025.
- [17:18]
Courtney Garcia
Jack, great to speak with you. Thanks for your time.
- [17:20]
Jack Genesee Woods
Appreciate it. Thank you.
- [17:22]
Courtney Garcia
Jack Chan. See what's do you agree with J.J.
- [17:24]
Tim Seymour
Well, you know, cuts as we get back into the second half of the year may be a reality. I mean the Fed's going to be watching the labor market, you know, laser focused on the dynamics that I think looked kind of weak last fall, which put the 50 bip moved out of the gates. I think the markets right now are certainly trying to digest where we've had a tremendous headwind from things that we just don't know about. I think this week shook markets to their core. You had a challenge at least to the whole ethos around the chip world and the infrastructure spend around it. You also had dynamics around tariffs that we didn't think. I also just think the strategic war with China as it relates to chips, how important companies like Taiwan semi are in the global sphere and how worried we should be in the US if some of these things get a lot worse. That's what this week was about. We came into this week feeling almost breathless and without any concern and you know, welcome to reality.
- [18:14]
Dan Nathan
Yeah, you know, listen again on the inflation stuff, if tariffs come in and they stay here and they cause the economy to weaken, inflation is going to come down. I mean, like, like that's just going to happen here. And again, you know, we were worried about stagflation, but look at the numbers that we put up last year with inflation on a cumulative level still pretty high. So at the end of the day, you know, we went from talking about rate hikes maybe in the back half of this year to possibly going back to if I'm looking at the CME Fed watch tool, I'm looking at June and it's still pricing about a 50% probability of four and a quarter on the upper band. So that would be another 25 basis points. You know, like it's a coin flip. So at the end of the day I just think that inflation probably topped out is my guess. And you know, now it's up to the economy just to try to hang in there a little bit.
- [18:59]
Courtney Garcia
Coming up, more on tariff turmoil in the energy sector. Oil closing out a losing week. And two energy giants closing commenting on the moves in their latest earnings reports. More on that next. Plus, hitting the deck, the parent company of UGG and HOKA plunging despite raising full year guidance. The details on that disconnect right after this.
- [19:18]
Dan Nathan
This is Fast MONEY with Melissa Lee right here on CNBC.
- [19:28]
Steve Liesman
What's at stake when administrations change from the first 100 days and beyond, EY brings insights on the issues that matter executive orders, regulation of AI, the fate of billions in tax credit, global trade and workforce stability. No matter the policy shifts, EY helps business and government leaders remain resilient and seize dynamic growth. Ey navigate the geopolitical and economic landscape with confidence.
- [19:55]
Melissa Lee
For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with.
- [20:02]
Brian Hartigan
Local communities and expanding access to care.
- [20:06]
Melissa Lee
Together, we're building a healthier future. Learn more@mycare.org.
- [20:15]
Courtney Garcia
We'Ve got breaking news on charges against a former Fed official. Steve Liesman's got the details. Steve.
- [20:21]
Steve Liesman
Thank you, Melissa. Yes, the Justice Department just the last hour charged a fourth former senior Federal Reserve official with conspiracy to commit economic espionage. The justice says a 63 year old John Harold Rogers is alleged to have passed quote, sensitive trade secret information from the Federal Reserve to co conspirators in China. Rogers was said specifically to solicit briefing books for governors, proprietary data sets and sensitive information about FOMC deliberations. Apparently he printed this info out or sent it to his personal email in violation of Federal Reserve rules. In preparation for trips to China, Rogers allegedly made false statements to the Federal to the Federal Reserve's inspector general about accessing and passage of this information as well as his association with coconspirators conspirators. He worked as a Fed senior adviser in the Division of international finance from 2010 to 2021. These alleged actions ran from 2013 to 2025. In the indictment it says that's even after he left the Fed, the Justice Department says the info was passed. That Rogers passed was, quote, economically valuable. They went on to say that the data provided could allow China to manipulate US Markets. He provided info, quote under the guise of teaching classes. The indictment cites two unnamed coconspirators who worked with who the indictment says work for the Chinese intelligence apparatus and presented themselves as graduate students. He was paid $450,000 in 2023 as a part time professor at a Chinese university. The Fed declined to make any public comments about this and the Federal Reserve Inspector general who was involved in this but is quoted in this could not immediately be reached for comment. Melissa?
- [22:05]
Courtney Garcia
Wow Steve, thank you. Steve Liesman, Pleasure. A pair of oil giants dropping after their earnings reports this morning. Chevron missing Q4 profit estimates with the company's refining business posting its first loss in four years. Meantime, Exxon beating on EPS but coming up short on revenue. These moves coming as President Trump plans to put tariffs on oil from Mexico in Canada starting tomorrow. What did you make of interesting moves especially ExxonMobil?
- [22:30]
Tim Seymour
Well I thought the moves in the stocks were very overly sensitive to the refining margins and the refining misses because Exxon is the same thing, the upstream beat first of all the free cash flow beat in both places And I still think that that's what you want to be most focused on along with capex if you're investor in the integrated I like the European ones even more but I like Chevron if you remember of course it was the C and BICEP I think at this point, who knows But I like it today. I liked it last year. I like Exxon. Exxon as recently as March, excuse me as is October was looked like it was breaking out to fresh all time highs and it's pulled back and in fact you can make an argument's done almost nothing over the last couple of years after energy really outperformed. So I think the energy names I guess it's funny I don't think that they're the really the ones caught in the line of fire on the tariff dynamics especially companies like Exxon especially which is a global company and has a lot of their assets around the world. We'll see. I don't think that was a reaction today.
- [23:24]
Courtney Garcia
Exxon CEO said you know we think we'll do fine under this tariff scenario because we can produce oil more efficiently than our peers and that's a benefit of being a large integrated.
- [23:33]
Melissa Lee
Yeah and I think too when it came to Chevron what you're seeing there is there's a lot of still pressure with their Hess deal. And I think there's a lot of questions there and they're likely not going to get answers until the end of this year. So I think some of that's probably why you're seeing a little more pressure, pressure on Chevron than you are Exxon, because both of them had like refinery issues that I think were the biggest things that we saw there. But I think what's interesting longer term is Chevron is getting in this space of producing power plants. And that was something this week that we saw everyone saying, oh, we might not need as much energy if AI is much cheaper to produce. But a lot of that demand is going to come from things like manufacturing on shoring electric vehicles, electrification of the economy. So I think a lot of that longer term is actually still a really big opportunity.
- [24:10]
Carter Braxton Wirth
I mean, it's such a curious space, right, because it's not a big part of the market, right. Energy at 3 plus percent. The two or three big stocks are half the weight, kind of go show. But it's also, you think of it as dull, but it's really high beta, right? So it, it really underperforms in 1819 and energy really outperforms in 2021 and now it's been sort of the opposite since 22. Ultimately, the yields are safe. I think we'd agree on that. And I think they belong in every portfolio to some extent.
- [24:36]
Dan Nathan
All right, so 25% tariffs on our biggest trading partners, Canada and Mexico, these large integrated names, they get a lot of oil right from those two countries. They refine them here. The margins can be down. That was one of the reasons these stocks sold off. And the Chevron CEO on the call this morning referred to the Gulf of Mexico as the Gulf of America. These guys are so far up, you know what, like they just got to get their head straight a little bit, do their business, you know what I mean? And again, maybe affect the tariff conversation more so than just kind of some of the narratives in and around the new administration.
- [25:06]
Courtney Garcia
There's a lot more fast money to come. Here's what's coming up next.
- [25:10]
Dan Nathan
Hitting the deck. Shares of Ugg and Hoka. Parent Deckers coming untied despite a beat and raise. Why investors are running away from this running shoemaker next. Plus a new wrinkle in the obesity trade. The numbers behind why so many patients ditch GLP1 drugs and the data that could tip the scales. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
- [25:44]
Steve Liesman
What's at stake when administrations change from the first 100 days and beyond, EY brings insights on the issues that matter. Executive orders, regulation of AI the fate of billions in tax credit, global trade and workforce stability. No matter the policy shifts, EY helps business and government leaders remain resilient and seize dynamic growth. EY navigate the geopolitical and economic landscape with confidence.
- [26:12]
Dan Nathan
Learn how to use AI to be more successful with CNBC make it's new online course.
- [26:17]
Courtney Garcia
We'll give you examples that can help you master AI tools.
- [26:21]
Dan Nathan
Go to CNBCmakeit.com AI and register now.
- [26:31]
Courtney Garcia
Welcome back to Fast Money, a buzzkill on Deckers, the name behind Ugg boots and HOKA sneakers. Shares plunging 20% after the company gave a disappointing sales outlook for the current quarter raising guidance by less than it beat. The stock closed at a record high yesterday but today saw its worst drop since 2012. Concern that Hoka's the growth is slowing there it had been so hot it was seem to be taking share from Nike and everybody in the world. Everybody's wearing Hokas and ons and Uggs.
- [26:59]
Tim Seymour
And look at some point you are a victim of your own success. And I just think that that's really look if anything what they've guided would mean comps would be negative for the first time since 2019. I mean it's a really, really tough comp. It was an incredibly strong holiday season to be clear and I think there's a lot of analysts on the street right now that say this is weakness to buy that the the guide was overly conservative. So that's really the dilemma here. Remember you know a lulu when it went through that period where again it was too good to be true and in fact the multiple wasn't that awful. But it wasn't necessarily a sure thing on growing at the same rate. And I think that's the issue here.
- [27:35]
Courtney Garcia
Yeah, UBS said it's a buying opportunity. Do the charts say that? Carter?
- [27:38]
Carter Braxton Wirth
Well, so it's always that question. There's two types of weakness in principle. Weakness take advantage of and weakness to stay away from. Right.
- [27:45]
Tim Seymour
So it sounds so simple when it's not right.
- [27:50]
Carter Braxton Wirth
I mean think about it. And so there are two types of discounts and I would just put it in this context. If beautiful blazers or casual sweaters or.
- [27:59]
Tim Seymour
Ultra and that is a beautiful blazer.
- [28:01]
Carter Braxton Wirth
By the way not mine and then they put it on for 700 instead of 1000. Nothing's changed about the blazer sweater. That's a discount that's weakness you want to take advantage of. That's a but discount sushi, that's called rotten fish. Right. So you.
- [28:13]
Dan Nathan
Wow.
- [28:14]
Carter Braxton Wirth
Well, so, so here was what we're dealing with. Is there something wrong with this? Is this a discount to take advantage of or is it weakness? Stay away from in principle court. You, you, you don't want to buy after a first day drop in gap when volume is Eightfold, tenfold. Not good technique.
- [28:31]
Courtney Garcia
All right, so is this a blazer on sale or is this rotten fish?
- [28:33]
Melissa Lee
Courtney, I really like the analogies, Carter. I'm really thinking, you know, I think when it comes to a company like this, like they have always been pitted against Nike to your point, because they're taking a lot of share. But I do think you get this fragmented space.
- [28:45]
Dan Nathan
Right.
- [28:45]
Melissa Lee
Like Athleisure was the space during COVID and now there's people, you know, we're not wearing Athleisure as much. But also there's just so many more options and I wonder just how much of that you're seeing reflected in the demand story. So yeah, I don't know if I would jump in with two feet on this one, but I don't know if it's rotten sushi either. I think it's probably somewhere in between.
- [29:02]
Carter Braxton Wirth
Doesn't have to be. Right. But the question is obviously as a matter of technique, all kind of analogies, jokes aside, it's usually better to let the dust settle.
- [29:09]
Courtney Garcia
Right?
- [29:10]
Dan Nathan
Yeah, really quick. I just think that when you see a move like that from an all time high, you take out two months of performance in one gap. It just speaks to a level of complacency. And so again, I think that a bunch of names that were growth stocks are starting to see deceleration. I think that's something we see into midyear.
- [29:25]
Courtney Garcia
Coming up, ditching the drugs, why so many GLP1 users quit, and what the numbers could mean for names like Eli, Lisa, Lillian, Novo Nordisk. Right after this.
- [29:37]
Dan Nathan
Missed a moment of fast. Catch us anytime on the go follow the Fast Money podcast. We're back right after this.
- [29:53]
Courtney Garcia
Welcome back to Fast Money. As people scramble to get their hands on GLP1 drugs, a first of its kind study is examining reasons why patients discontinue or reinitiate obesity. Drug treatment research is finding that patients without type 2 diabetes are more likely to discontinue treatment, while other factors like income and drug side effects are also playing major roles. Lead study author Tricia Rodriguez joins us now. She's a senior applied research scientist at Truveta Tricia, great to have you with us. This is a fascinating study, particularly as companies are looking at ways to, I guess, keep people taking these drugs. What was interesting to me was I think that there is an assumption in the marketplace somewhat that if people saw a great weight loss, they were very successful on these drugs, that they might stop and try and just keep it off on their own. But that's not what you found. Those people are more likely to stay.
- [30:44]
Tricia Rodriguez
Thanks so much for having me. That's exactly right, Melissa. We found that weight loss was associated with a lower likelihood of discontinuation. So as patients lost more weight, they were less likely to stop the drug.
- [30:56]
Courtney Garcia
And in terms of, I mean, everything is a choice, right, in life. So also income has something to do with it and the cost. What did you find?
- [31:05]
Tricia Rodriguez
Yes, so we found significant relationships with income, particularly for patients with type 2 diabetes. And this was really interesting because what we saw is that as income bracket increased, the likelihood of stopping progressively decreased. And then the flip side of the coin, of course, is cost. And on the cost side, we see that this much higher rate of discontinuation for patients that don't have type 2 diabetes, we know those patients face a much higher burden of cost because insurance is a lot more, more challenging for those patients. And so both from the income and the cost perspective, those seem to be playing a really important role in discontinuation.
- [31:47]
Courtney Garcia
In terms of, I mean, just going back to the grade of the weight loss, what were. I mean, it actually you sort of sliced into very fine tranches in terms of how much weight loss is associated with a likelihood of discontinuation, which I thought was really fascinating.
- [32:01]
Tricia Rodriguez
Yeah. So we looked at the sort of time varying weight loss, and so each 1% weight loss was associated with about a 3% reduction in actually stopping the medication.
- [32:14]
Courtney Garcia
And what is sort of the takeaway of this study overall in terms of, you know, if you're Eli Lilly or Novo Nordisk and you're taking a look at this data and you're thinking, how do I get patients to stay with the drug? What are some of the high level findings that you have in terms of the patients who are more likely to stay on the drugs are patients who are what?
- [32:34]
Tricia Rodriguez
Right, It's a great question. So the patients who are more likely to stay on the drugs are of course, patients that don't experience moderate to adverse, moderate to severe adverse events. They're also likelier to be experiencing a benefit. But I think the really critical piece here is that there is a gap in Access. And so the highest income patients are able to stay on this drug while lower income patients are less likely to stay on this drug. And so I think that's a really key takeaway of this finding of this study is sort of how can we enable greater access for a greater range of patients.
- [33:09]
Courtney Garcia
All right, Tricia, great to speak with you. Thank you for sharing the results of this study. Really interesting.
- [33:14]
Tricia Rodriguez
Thank you so much.
- [33:15]
Courtney Garcia
Tricia Rodriguez of Truveta. And you know that issue of access and you wonder how much of it will be opened up as more indications are approved by the FDA for taking these drugs. And then also as there are different form factors, pills theoretically should be cheaper to manufacture, should be cheaper to buy. And will that open up the audience?
- [33:33]
Dan Nathan
Well, right. The uncertainty about just what the competition looks like and then with the supply demand kind of picture kind of getting a bit more in line. I mean the stocks tell you everything you need to know. Lilly and Novo and you know, they're not too different than we talked about this last year. The megatrend of generative AI and GLP1s. And look at the way Novo and Lilly have traded specifically Novo over the last, I don't know, six to nine months when it topped out. And those looked a lot like some of these generative AI stocks or specific specifically like in video. So I look at in Novo Nordisk, if you tell me that you're not going to have any major competitors in the next year or so, trading at about 22 times this year's expected earnings growth at 22%. I know they've already guided down. Maybe they've de risked in the near term, but maybe that one looks more interesting. But I think they're both really tough right here.
- [34:18]
Carter Braxton Wirth
Yeah. I mean just to Dan's point, think about how long it's been since they've made the simple thing of a 52 week high. Right. So Novo peaked at the last week of June, Lilly in the second week of July. So you have the sort of one to set up of great preceding outperformance and then now half of year and more of unemployments. That's usually it looks like this, right? Yeah. Not, not great.
- [34:41]
Courtney Garcia
And then there's also the issue that we saw with Eli Lilly these past two earnings releases when they were talking about inventory and how lumpy that is and, and how analysts are sort of trying to figure out how that is that it can be so lumped that you can't figure out what the inventory is when you have a population of patients who are taking These drugs. There was an analysis by Evercore ISI's Umar Rafat, and he was saying that he believes that seasonality also plays a factor. That they're just learning so much about how these drugs are taken and how long patients stay with sort of gives you an idea that maybe things are not as clear as. It's a huge market, it's a huge demand for the drugs, and they're expensive, and it's a buy, you know, so.
- [35:20]
Tim Seymour
I get the lumpiness and I get the fact that the euphoria around GLP is something that, you know, a lot of people, we. We had the ability at least to make comparisons to semiconductors. But the reality is that Lilly's compound annual growth rate, at least the analyst community says it's going to be north of 30% for the next five years. So is that priced in? Especially when you look at the margin profile of the company, which seems to be getting better. So some of the dynamics around the oral and some of the releases on the different phases here, I mean, I think there's going to be catalysts even within gop, but people forget about where Lilly is in other product classes. So I think this is weakness you're buying. I can't argue with what Carter saying. I mean, and Novo, I mean, that's. That's been a. That's been a stock that's hurt people who jumped in that thing, you know, late in the game.
- [36:02]
Courtney Garcia
Yeah. A buy on Lilly for you or no?
- [36:04]
Melissa Lee
Yeah. I think this is something you want to take advantage of mainly because of the supply and demand constraints. Right. I mean, this is an industry that has not been able to get the supply out there to the point that you have these compounded drugs in order to compete, and those are starting to get taken off now. The supply is there. I mean, the demand is not the question here. I think the question is, are investors going to wrap their head around that? And clearly you're seeing some of that optimism was priced in. It's getting taken off. But I think over the long run, I think this is something you absolutely want to have a piece of.
- [36:28]
Courtney Garcia
Coming up, the NASDAQ 100 is celebrating its 40th birthday. The index has risen by more than 17,000% since its inception. We'll dig in on the biggest changes in that time and where the trends are going next. But first, points for a pop. The chartmaster lays out a handful of names he thinks are gearing up for a breakout. That is next. More Fast Money right after this. Welcome back to Fast Money from An info tech stock to a cybersecurity company that relies on artificial intelligence. The Chartmaster sees patterns that suggest these stocks may be on the cusp of a breakout. Carter, what are you looking at?
- [37:09]
Carter Braxton Wirth
Sure. So I thought we would as an exercise look at some laggards, right? Names that have not made 52 week highs have not broken out. They've been rangebound. And the thinking is that these are catch up trades. So rather than chasing some of the steepest and extended names, let's run through them four charts. The first is Accenture of course they're in IT consulting and as annotated here it is toying with the prospect of moving above the former high. And that's my bet. Hence the green arrow, that part's objective. Of course someone else might draw a red arrow. But anyway, on to the next. And so what you see here is Union Pacific, it's obviously one of the biggest rails and it too has the same circumstance. It has not broken out and the betting is that it will lagging. If markets make a new high and you're sideways for six, eight months, you're an underperformer. That's an opportunity or a problem. I think it's an opportunity. The third of the four again these are all very large cap 100 billion plus is Medtronics. This is devices, it's health care. And it too has not made a 52 week high as the market recently did. Good relative strength. This week play for the breakout. And then finally Crowdstrike, also a smaller name but still 98 billion. And the presumption is because the pattern is the same, that it too is going to break out. So we play the cards as Delt do all stocks that are setting up to break out breakout? No, but that is the bet.
- [38:31]
Courtney Garcia
Which do you like, Dan? If any.
- [38:32]
Dan Nathan
Crowdstrike is interesting. Remember last summer when this thing got cut in half and one fell swoop they had that obviously that data issue. To me I just think, listen, the S and P, it looks fine here. It's back up towards those high. We had that little shake out here earnings season seems like, you know, it's been okay for the most part. It got off to a great start with banks and the like here. I just think at some point the S and P is likely to take a little bit of a breather here. Maybe down 5 to 7% or so. So I don't love, you know, a lot of these stocks have come a long way despite the fact that they've been laggard. So I'm just not buying breakouts right here.
- [39:04]
Tim Seymour
Unp. I mean we just got numbers out of them. We, we are hearing about margin improvement, operational efficiency. You know, there's all kinds of questions about what tariffs might mean if you're a rail. But I think this is one where the valuation and the way they're running the business gives you a reason to say I can hang in there until this one does break out of that range. Carter says we might be on the.
- [39:22]
Courtney Garcia
Verge of Mm, how about you court.
- [39:24]
Melissa Lee
Rather than picking one? I'm actually, I'm in. Take car's advice. I think what you want to say is probably not all of these are going to break out. But I think this is why you do want to take advantage of the stocks that are out of favor right now. Especially, you know, we've been saying this a lot to clients, but you are likely overexposed to tech. You want to start to look to take some profits, take advantage of some of these dips. So don't try to pick one of them. Get diversified. I think, you know, a lot of these are really great names that Carter picks out here.
- [39:47]
Courtney Garcia
Coming up, Foreigner and Wham. We're talking the Billboard charts and Beverly Hills Cop that was blowing at the box office. We're taking it back to 1985 and the debut of the NASDAQ 100. Next, more fast Money into. Welcome back to Fast Money. Today marks the 40th anniversary of the NASDAQ 100. The index attracts some of the largest non financial names in the NASDAQ complex deposit at its inception its market cap total $58 billion. Today it is worth over $27 trillion. Only 6 of the original components remain in the index. Apple, Micron, Intel, KLA Corp, Paccar and Costco. Today Apple alone is worth about 60 NASDAQ 100-00 from 1985. We're joined now by Brian Hartigan, Invesco's global head of ETFs and index investor investment. Invesco manages the QQQ, the fund that tracks the NASDAQ 100. Brian, great to have you with us.
- [40:50]
Brian Hartigan
Great, thanks for having me.
- [40:51]
Courtney Garcia
And we were just talking about how it's changed so much in the 40 year period. And the most remarkable change, not just the size, is a concentration. Right. These days.
- [41:00]
Carter Braxton Wirth
Right?
- [41:01]
Brian Hartigan
Yeah, it's really evolved since 40 years ago. The index launched 25 years ago. Q. Q. Q. Launched really as I say, one of the leaders of the ETF industry. But you've seen that concentration evolve over time. But what's been true is the Index has always captured the secular themes via technology innovation. We talk about the beginning of the Internet days into PC computing, into tablets and smartphones, onto social media and into AI and the like. So the index has always been able to capture the leaders of that. But this year you're certainly seeing much more concentration in the top holdings. And that's been a big story around the markets this year.
- [41:39]
Tim Seymour
Hey, Brian. Yeah. Congratulations. Because, you know, ubiquity sometimes is, is a negative. You've achieved ubiquity. I mean, the association of the cues to the markets is, is, as we were saying, like Kleenex to facial tissue. So good for you. And, and I guess the RSP is, is outperformed this year. And so after years of, you know, I was probably saying one year ago, I don't think six stocks are going to be 30% of the S&P or 36% of the NASDAQ. So just give us your thoughts on the flows there. And I'm curious now just to layer in the institutional versus retail because institutions. It's no longer an embarrassing thing as a hedge fund guy to say I'm owning ETFs.
- [42:14]
Brian Hartigan
That's right.
- [42:15]
Tim Seymour
You know, and especially these ETFs, which give you a lot of balance.
- [42:17]
Courtney Garcia
Right?
- [42:17]
Brian Hartigan
Well, we talk about Q's. Q's is one of the most liquid vehicles in the world. RSP has actually taken on the same institutional liquidity. You know, it's, it's, it's fractions of the S and P and it's multiples of what it used to be in terms of the liquidity. So it does bring in institutional investors to do exactly what it does and diversify from that concentration risk. So equal weight, the 500, you're taking away the Mag 7 and some of that concentration, and you're able to really surgically insert kind of that allocation, whether it be short term, long term, or for your overall portfolio diversification. So we're seeing the institutional adoption and again, that much more close hands on surgical precision that investors are looking for.
- [43:01]
Dan Nathan
Brian, give the viewer a sense, like two years ago, Nvidia was a $300 billion market cap company. Now it's a $3 trillion market cap company. How do you guys, you know, kind of rebalance these sorts of ETFs so you don't get too lopsided towards some different, some, a few different names.
- [43:16]
Courtney Garcia
Sure.
- [43:16]
Brian Hartigan
Yeah. The Nvidia story is an amazing growth story and the index captures that. Right. Whether it's, we have index evolutions from the mid cap, the next 100 into the ultimate NASDAQ 100. And those rules really create some of the ceilings, right, for diversification rules, minimizing some of the 5% allocations that you have. So the indexing really takes the rebalancing. The management kind of keeps buying some of those winners and gets rid of the losers very naturally through the index process.
- [43:48]
Courtney Garcia
Do you guys have like cake in the office? Like what do you do for 40?
- [43:52]
Brian Hartigan
40? I'd love to celebrate a 40 again. So this was great. I really enjoyed it. We had cupcakes and we were out on the screen. It was great.
- [44:00]
Courtney Garcia
Thank you, Brian. Thanks for stopping by. Brian Hartigan of Invesco. Up next, final trades.
- [44:13]
Carter Braxton Wirth
Thank you. I would have done it again.
- [44:15]
Courtney Garcia
Final trade time. We are having fascinating stat. Carter pulled up Walmart and Costco beat the NASDAQ over the past 40 years. Amazing. I mean, okay, final trade time.
- [44:26]
Tim Seymour
Tim Carter is full of those, by the way. And fortunately we get them all the time on the show. GDX is probably another one. I bet he's done this with Gold and the S and P. And it's certainly been a period where Gold's had a great run, making fresh new all time highs. GDX to me has been underperforming that. Go buy that, Courtney.
- [44:42]
Melissa Lee
You know, we started the show talking about this broadening happening and in light of Invesco being here, I do think looking at the RSP, which is the equal weight S&P 500 is absolutely worth taking a look at here.
- [44:51]
Courtney Garcia
Dan Nathan.
- [44:52]
Dan Nathan
I agree with that. Especially when you see some of these big names kind of reverse a little bit. I thought Apple's price price action today was really bad. I expect maybe the meta, even though it had a good quarter to come back into a little bit.
- [45:02]
Courtney Garcia
Carter Braxton. Worth of worth.
- [45:04]
Carter Braxton Wirth
Got to go with one of those singled out earlier today. So Accenture, obviously some would say a low boring kind of name, but I think you play it for a breakup.
- [45:13]
Courtney Garcia
All right, thank you for watching Fast Money. Have a terrific weekend. Don't go anywhere. Mad Money with Jim Cramer starts right now.
- [45:24]
Melissa Lee
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 andor 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.
- [46:04]
Dan Nathan
Learn how to use AI to be more successful with CNBC Make it's new online course.
- [46:10]
Courtney Garcia
We'll give you examples that can help you master AI tools.
- [46:14]
Dan Nathan
Go to CNBCmakeit.com AI and register now.