← CNBC's "Fast Money"
CNBC's "Fast Money"
Oil Drops As Iran Responds… Plus Novo Nordisk Cuts Ties With Hims & Hers 6/23/25
00:43:39
Crude oil sliding after Iran’s strike on a U.S. base in Qatar. The energy impact, and how the broader markets are reacting. Plus The next move for Novo Nordisk, as the pharma company cuts ties with Hims & Hers. What it means for the weight loss drug space, and how their latest trial data is hitting the stock. Fast Money Disclaimer
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- [00:00]
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- [01:06]
Melissa Lee
Live from the NASDAQ markets right in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Markets on alert, stocks up and oil down even after Iran targets US Bases in the Middle East. Are investors underpricing risks in the region? Can they continue to shrug off rising tensions And Inovo no go. Shares of the Wegovy maker dropping on its latest trial results and and data on Amgen's weight loss candidate sending those shares lower to the latest on the space and how to play the stocks right now. Plus KB Home shares dropping after its latest earnings report. Tesla's long awaited Robotaxi rollout sparks a rally and Lululemon shares trading at 5 plus year lows. What is behind this move and can the company recover? I'm Melissa Lee, come to you live from CDO B at the nasdaq. On the desk tonight, Tim Seymour, Dan Nathan, Ghay Adami and Julie Beal. We start off with markets seeming to breathe a sigh of relief even as the US Enters the war between Israel and Iran. While major averages dipped on news Iran had targeted US Assets in Qatar, they reversed course as damage looked to be contained and ended the day near their highs of the session. Oil prices meantime dropping with Brent crude settling down more than 7%. WTI crude also sharply lower as Iran avoided any action in the Strait of Hormuz. Volatility also down. The VIX briefly hitting its highest level in a month before retreating. But treasuries did catch a bit with the yield on the ten year hitting its lowest since early May. For the latest on the US Involvement in the Middle east, let's get to Megan Casella in D.C. meghan? Melissa, this was Iran's official retaliation against the U.S. s strikes over the weekend. The Iranians fired 14 short and long range missiles at Al Udid, the U. S run air base in Qatar. All of those missiles were effectively countered and there were no deaths or injuries reported as a result of the attacks. Two U.S. defense Department officials also say there was no damage done to the base itself. Just in the last hour now, President Trump made his first remarks on the strikes. He called it a very weak response which we expected and have very effectively countered. He went on to to thank Iran for giving us early notice and he ended with, quote, perhaps Iran can now proceed to peace and harmony in the region and I will enthusiastically encourage Israel to do the same. So a couple of things there. The president confirming that the Iranians gave the US A heads up in advance of the attacks, making that more of a strategic move that may have made these attacks more symbolic than anything else. A way for Iran to sort of retaliate without doing the type of damage that would have provoked the US Even further. The president also here urging an end now to the conflict of return to peace and harmony. And the White House today has said that it is still committed to a diplomatic solution. So the question from here, Melissa, is whether Iran and Israel are committed to that solution as well. All right, Megan, thank you. Megan Casella in Washington for us. For more on how markets reacted to hopes for de escalation, let's bring in Matt Gertkin, chief geopolitical strategist at bca, an independent research firm. Matt, great to have you with us. Are markets underpricing what is going on in the Middle east or have we seen the worst of this conflict for now?
- [04:04]
Matt Gertkin
Well, thanks very much, Melissa. It's not clear that we've seen the worst. I would be quite skeptical. These are major events building up from structural tensions in the region and in Iran and between Iran and Israel. We've had generational change in the leadership across several of the Gulf Arab states and we see that happening in some other Western countries. But there has not been a generational change in the Iranian regime or in Israel for that matter. And so we're still seeing hardline and hawkish leaders. Israel now will be front and Center. The U.S. president will have to put some pressure on them and really discipline Israel to ensure that this doesn't escalate any further. And I'm not convinced that will happen. I think, in fact, Israel will continue to fight the fight, and that could very well provoke Iran to take more actions.
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Tim Seymour
Hey, Matt, peace and harmony, that's not something that's existed in the Middle east probably in thousands of years. So when the President of the United States suggests this, what you just said about Israel, I don't know how Israel comes to terms with, you know, a major tenet of the Iranian government's view about Israel is that death to Israel. So we're probably a ways off from peace and harmony, wouldn't you suggest?
- [05:13]
Matt Gertkin
Well, there's got to be a damage assessment, you know, of what's actually happened. If Israel is satisfied that Iran is permanently off the path of a nuclear weapon, then they could probably listen to the president and say, okay, it's time to shift to negotiations. But the truth is the Iranians have taken the approach that they can weather the storm, they can sustain really severe attacks. They've moved around the enriched uranium. They've got the same regime in place that they think can survive and can suppress social unrest that will probably stem from these attacks ultimately. And so that means that we'll have a regime that's much more hardened in its conviction. It'll still have some of the intelligence and talent necessary, and it'll still be getting help over the years from Russia and China. So there will, from Israel's point of view, there's still a very good reason to continue to press against critical infrastructure, undermine this regime, and keep the Americans entangled.
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Julie Beal
Matt, the moving court. I'll suggest today's what retaliation maybe takes closing the straits off the table. Do you believe that or is that sort of a little bit getting ahead of ourselves?
- [06:20]
Matt Gertkin
It's getting ahead of ourselves. It's not entirely off the table. Closing the straight of Hormuz was always something that would only happen if the Iranians were convinced that the regime was absolutely going down and they had no other choice. But that could still happen if we had a series of bad events and a downward spiral. What that requires is effectively the way that would play out. It either the Iranians were faking it today and they're about to retaliate in a bigger way, or Israel could strike some of their own capacities. For example, Israel could strike their ability to export oil abroad, and then they would start to retaliate against regional oil infrastructure and the US Would get involved and things could escalate from there, or just the Lack of trust between the US And Iran. If at any point the Iranians look like they might make a move to mine the strait or take out some ships, or if the Americans look like they might try to preempt Iran and remove their ability to do that, then it could cause those itchy trigger fingers to move, and we could end up with a crisis. That was a miscalculation. So there's several ways in which this could still be on the table, but it is admittedly a lower probability now than it was, you know, just a day ago.
- [07:27]
Dan Nathan
Hey, Matt. So, Tim, as, therefore, as a geopolitical strategist, what is either your highest probability, negative, major volume event out there? What aren't we thinking about? I understand that this is a complex geopolitical dynamic, but again, and. And maybe. Maybe this is the wrong day to be looking at other parts of the world. But. But where are you most concerned? Because right now this looks like it could have been a bad situation, that at least as of the end of the day, the VIX is down, volatility is lower, markets went higher.
- [07:56]
Matt Gertkin
Yeah, it's extraordinary what's happened today, but we have to realize it's an issue of time. You know, what I've charted for three years is this destabilization of the Middle East. The Middle east was not able to produce its own balance of power. It really. And that's the norm, perennial. But the Americans need to get involved and be the actor that arbitrates and fixes a balance of power that usually is pretty precarious anyway. And when you're living through these kind of sequences, there's a fog of war. Things change on a daily basis. The market mood shifts really rapidly. What we know is that Israel is determined to deal a really significant blow to this regime that could ultimately make it very hard for the regime to survive because of social unrest stemming from their sclerotic economy, which will now be weakened. And we also know the Iranians are intending to survive and build back better in a way that would perpetuate the conflict. And we know that the US Will intervene. So I think what that tells us is we're not having a deal in the Middle east, and that unleashes Iranian reserves and creates peace and stability and a balance of power. We're still in an unstable environment, and over a period of months, that could continue to influence the markets in a way that would. That would cause a risk premium in the oil price and would help to foment some of the fears of stagflation.
- [09:18]
Melissa Lee
Matt, Great having you on. Thank you for your insights today. Matt Gert, thank you very much. Of bca. We want to have somebody like Matt on because you're trying to figure out what exactly are we not thinking of in terms of the market action, why are we fall down all these things that you wouldn't have thought we play that game. If I told you what had happened.
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Julie Beal
Yeah.
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Melissa Lee
Would you be able to tell me what the reaction, the percent now, none of this today I would gamble maybe.
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Julie Beal
Maybe yields. Maybe yields lower was the only one I potentially could have gotten right based on. But in terms of crude oil being down 6%, absolutely not. The S and P rallying the way it did. No. Given what we heard on Friday into Saturday or into Sunday, No. So that's why it becomes such a difficult game to play. And what aren't we talking about? To me, listen, loss of life is a horrible thing. I think we're all very respectful of that. But the market moving event, in my opinion is closing the straits. And if that were to happen, then we'll have a conversation about where does crude go, where does the S and P go. But short of that in terms of the market is sort of business as usual.
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Melissa Lee
Yeah. Julie Beal, your thoughts? Because most market strategists do say unless oil jumps, unless there is some sort of event that really causes a jump in Brent, a jump in WTI, etc. It hurts the pocketbooks of everyday Americans. We, we are not going to see a market impact.
- [10:29]
Guy Adami
Yeah, I think that's probably right. I think everyone is very, very focused on where oil is moving because it's been such a good guy for inflation. It's been so helpful in order for us to kind of move forward to a regime where we can lower interest rates. And I think if that is taken off the table, that really jeopardizes both what the, the path for the Fed is. But it also, I think it's going to really take a bite out of consumer confidence and that's what really a lot of our economy is hinging on right now. What I think is interesting is just, it really feels like in this market is like, oh, okay, this wasn't as bad as we were all worried about. We can manage through this level of uncertainty. It's fine. And I agree. I think we still haven't really cleared through enough to know how exactly it's going to impact us over the longer term.
- [11:14]
Melissa Lee
And we are so close to getting that first that cut. Right. I mean, we heard Bowman today, following up on Waller on Friday.
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Dan Nathan
I think we learned today and we didn't learn it. We were reminded today that the Fed is so much more important than any other factor out there and that this is a Fed that. I think after Powell, one of the observations was this is a Fed that seems to be okay with PC at 3.1%. And that said, actually, until the labor market falls apart, we're kind of comfortable here. But you know, even without the labor market falling apart, you've had two important voices, including Vice chair today. Bowman basically saying she saw July could be a possibility. Markets are looking through war right now. They are looking at the Fed. And if you look at some of the performance of the market today, you even had small caps outperforming, you had some equal weighted stuff. Outperforming wasn't just runaway for the tech growth trade. It really was stuff that would benefit from the Fed stepping in and finally moving, which may or may not happen. But that's, that's the more important headline out of today.
- [12:14]
Tim Seymour
Yeah, I go back six months, right. So we've had really two bouts of major volatility in the stock market. That was December 18th after the Fed, you know, I guess Fed Chair Powell came out a bit more hawkish than some folks felt going into 2025. And that, that, that was actually a really interesting day if you think about it, because I don't think that caught anybody by a huge surprise. It just pushed out rate cuts, you know, maybe six to nine months or something like that. So here we are. Now, nothing the Fed said really moves the stock market. Just think about that over the next last few months or so. And obviously Fed Chair Paul speaks tomorrow. Last week he was concerned about a lot of the things we're talking about. The uncertainty around geopolitical, the uncertainty about inflation. And you look at a day like today and you say to yourself, there's no concern. I mean, like, there's absolutely no concern. People are looking past geopolitics, they're looking past inflation, they're looking past a trade war. And that was the other of technology, about volatility. I was going to say just two.
- [13:06]
Dan Nathan
Months ago, but are you. I'm so, I'm not clear. Are you saying that you think that the Fed's influence now on the market in terms of being a catalyst is not significant?
- [13:13]
Tim Seymour
I think it's less significant. And I think to your point, once you start having this chorus of folks suggesting that rate cuts are going to come sooner than a lot of folks think, and then maybe there's more of them this year. I mean, I think it's amazing. We go back to September last year, they started with a 50 basis point cut because they were worried about the jobs market. Then they followed up with two more. Now, if you're telling me a PC comes in, cooler PC, if some of the stuff in and around geopolitics kind of settles down a little bit and inflation and growth and all this stuff, maybe they're too low on growth too. I mean, the way they kind of locked it lower last week. So again, I can see why folks are starting to think about cuts sooner than some might expect.
- [13:51]
Julie Beal
Terms of yields, again, I get it. They're lower today. It makes sense. I'm still probably one of the few people out there that think yields can go higher the end of the year. When I say higher, I think we can approach 5%. And I don't think it's going to be because growth is so robust. I think it's all the concerns we've had that by the way, the market doesn't seem to care about at all. But if you do get a hiccup in the bond market, whether it's over the next couple of months or early next year, I mean, at some point the market absolutely has to care at least.
- [14:17]
Melissa Lee
We've got a news alert on Starbucks. Kate Rogers got the details. She joins us on the fastline. Kate? Hey, Melissa. So we're getting some headlines from Chinese media catching that said Starbucks is considering a full sale of its China operations and that's a significant shift in strategy for the company. The report cites some people familiar with the matter saying that the companies held preliminary talks with more than a dozen potential acquirers, including private equity firms Hill House Capital Group, Stout Invest Partners and Trust Our Capital Now CEO Brian Niccol told the Financial Times in recent weeks of the Chinese brand here, Starbucks China. People see value in the Starbucks brand. They see the coffee category growing. And I think that they'd love to be partnering up with us and figuring out how we take this from 8,000 to 20,000 stores. And just a reminder on Starbucks China, it's its second home market, Melissa, they're looking to have about 9,000 locations there by 2025. And that market has seen many challenges as of late due to a softer consumer environment and of course, the expansion of lower cost competitors like Luckin Coffee. Same store sales were flat in China last quarter and they've been discounting drinks that are non coffee based because the consumer in China is more focused on those tea options. And they've talked about exploring these strategic options for the China business. But there have been very few details about the plans beyond that. So once again we're getting these reports from Chinese media reporting the company considering that full sale of the business. We're out to Starbucks for comment and more to come when we get it. But you can see the stock is slightly higher on this news headline. Back over to you, Kate. Thank you. Kate Rogers. Tim Seymour, is this shortsighted or is this a good move?
- [15:57]
Dan Nathan
I think it's potentially thoughtful. I do think this is a company that if it was four years ago we were seeing this headline, this stock would be down 20%. I think we've digested a lot of pain and I think we, you know, when we talk about a turnaround at Starbucks, we don't talk about, we're not talking about a company that's necessarily broken. We are talking about operational improvements, but we are talking about, again, Brian Nicholl, he's a marketing guru. And part of what I think is the turnaround in Starbucks is getting the US market back to where it was. So not a great headline, but the stock seems to not care.
- [16:28]
Melissa Lee
Yeah, Julie, you think it's a better Starbucks without the China operations?
- [16:33]
Guy Adami
Been really, really challenging for them to find the growth that they've been looking for and be competitive. You know, a lot of it is based on the premise that this economy is going to move from one that's about production to one that's about consumption. We haven't really seen that, but we have seen lower priced peers really, really make it difficult for Starbucks to be successful. And I think it ends up being a distraction because I think it's a very different business in China than it is in the US and what really, really needs to be solved is the domestic business. That's really the problem right now.
- [17:04]
Tim Seymour
Yeah. There was a time though where a big part of Starbucks premium had to do with the expected growth in China.
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Melissa Lee
A lot of these brands premium had.
- [17:10]
Dan Nathan
To do with China.
- [17:10]
Tim Seymour
Yeah, but you guys remember like we were talking about this Luckin Coffee, this was the Chinese brand and I think Kate just mentioned it. I'm starting to see stores popping up here in the United States again, which is really interesting to me. Now obviously that was a big financial fraud. If you go back, I want to say five or six years or so. But again, I mean, Starbucks seems like they have multiple flanks they have to defend right now. And whether this marketing guru can fix it or not is another story. But if you think about nationalistic tendencies, you know, going on amongst Chinese citizens and it's probably only likely to accelerate. In my opinion, this could be a way to kind of get out of this business, take a little something, refocus on North America or rest of the western world.
- [17:48]
Julie Beal
CMG fix was I think a little bit easier than the Starbucks fix. And one of the problems that I don't think anybody can fix is the valuation, which I think at 31 times is probably a little expensive. Not historically expensive, but their growth trajectory in 2025 makes it expensive.
- [18:03]
Dan Nathan
No, I just, I think that the multiple is probably the place where we should start. It's not cheap and all the oat milk you drink in your coffee's guy isn't going to change that.
- [18:12]
Melissa Lee
They really should charge extra.
- [18:13]
Julie Beal
Well, they do charge me extra and I'm more than happy to pay it. Oat milk's a very important staple of my diet. Melissa Lee and it does wonders for my system.
- [18:22]
Melissa Lee
By the gallon.
- [18:23]
Dan Nathan
Yeah, your system.
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Melissa Lee
Let's get the cybersecurity stocks jumping today amid the threat of potential cyber attacks from Iran. CrowdStrike hitting an all time high up more than 3%. Fortinet Zscaler, Palo Alto Networks also climbing today. We are on high alert in terms of hits to the infrastructure, etc. After if we think that the only retaliation Iran was going to wage were those missiles, we might want to rethink that because everything is on the table at this point.
- [18:50]
Dan Nathan
I think every, every period of weakness or idiosyncratic event that the sector seen, whether it's crowdstrike obviously and their upgrade and their update, I should say that created havoc and mayhem and fines and whatnot. Has been a time to buy CyberSecurity and buy CrowdStrike, which is my favorite of the bunch. It's not cheap but that is that is north of 30% growth that I'm paying for.
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Julie Beal
Palo Alto is where I would go not cheap 54 times. Next year's numbers probably deserves it because I do think it's the best in class. But you know, the shape the secular shift into these names has been going on for more than five or six years now. Rightly so. This just adds to the reasons why you want to own them.
- [19:29]
Melissa Lee
Coming up, Lulu Lowe's shares, the athletic wear maker hitting their worst level in more than five years. What this company needs to do to get shares back off the mat but first we're watching shares of KB Home after its latest earnings report. The details and numbers from the quarter next do not go anywhere. Fast money is back into.
- [19:50]
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- [21:21]
Melissa Lee
Meet you there on WhatsApp. Your personal messages stay private between you and whoever you send them to. So things like the passport numbers for your honeymoon stay between you and your fiance and that video call for your grand's 80th stays in the family. Even your streaming password stays between you and your college roommates, who still ask for it every week in your group chat. Because on WhatsApp, your personal messages are yours. No one else can see or hear them, not even us. WhatsApp message privately welcome back to Fast Money. We've got an earnings alert on KB Home, the stock dropping after hours despite the company beating both earnings and revenue estimates. CNBC's Diana Olek has got more Diana and Melissa. That weakness is likely because full year guidance was lighter than expected and homes delivered decreased 11% year over year, CEO Jeff Metzger said in the release. Though market conditions have softened, we remain consistent in our focus on optimizing our assets to offer the most compelling value to our buyers, maintaining pricing transparency and enhancing margins and returns. Now, the company's housing gross Profit margin was 19.7% compared to 21.2% the year before due to price reductions and other home buyer concessions. Higher relative land costs, geographic mix and reduced operating leverage, partly offset by lower construction costs. Now that average selling price did increase slightly to $488,700, but that's likely skewed due to more activity on the higher end as lower income buyers drop out. So they lower the prices a little, but higher end buyers, you get it, Melissa. Yeah. All right, Diana, thank you. Diana Olek, another disappointment out of kp.
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Julie Beal
It should be lower. I mean, and again, I think we've done a decent job with the homebuilders. But you look at the numbers, I mean, earnings were down 11% year over year, deliveries were down 11% year over year, and new orders were down 13% year over year. And obviously they guided lower. And this is on top of other guides that have been lower. It comes down to affordability. And if you look, I mean, things are changing. And if you ever see an uptick in the unemployment rate, which again I think we will see, I'm surprised we haven't gotten there. The homebuilders, you don't go near them here.
- [23:31]
Melissa Lee
Let's even say that there is a cut in July. Julie, I would imagine that's probably not enough to help these guys in terms of buying down those mortgages.
- [23:42]
Guy Adami
I don't think so. Right. And you know, the big challenge to them too is that their Inventories are up 11% year over year. So now they have this inventory they can't sell, they have no pricing power. And even if we get a 25, even if we get a 50 basis point rate cut, right. Mortgage rates are still quite high. And there is a limit to how much they can buy down. Right. Because I think it's people are starting to really recognize and internalize that we're probably never going to see 2 and a half, 3% mortgages again. And I think that that changes the dynamic where you say, okay, fine, you can buy down my interest rate for a year or two, but eventually everything's going to come back down. If it can't come back down, that changes the affordability question over the long term in a really meaningful way.
- [24:25]
Dan Nathan
But in terms of affordability of the stock, it's not expensive. And if I look at it relative to itself, over a five year, it's about 5% cheap. Over over a 10 year it's probably 20% cheap to where it trades and it's got almost a 10% free cash flow yield. I don't like homebuilders. I haven't liked them for a while. But I do think sentiment isn't great. And I do think the stock's not expensive. And I think it's something you should be keeping an eye on.
- [24:48]
Melissa Lee
I mean, in theory. Gushing. The stock turn before.
- [24:50]
Julie Beal
Yes.
- [24:51]
Melissa Lee
We see interest rates 100%.
- [24:53]
Julie Beal
And you know, you've had Vinnie, Vinnie and Porter and Danny Moses talks about the homebuilders and they do turn six to nine months before. I just don't think we're there yet. And especially if you haven't seen the unemployment rate move to where I think it's going, I think this is more about the employment picture than it is about the interest rate picture.
- [25:10]
Melissa Lee
All right. There is a lot more fast money to come. Here's what's coming up next.
- [25:14]
Advertiser
Lululemon goes even deeper into downward Dog.
- [25:18]
Tim Seymour
The stock hitting its lowest level since the pandemic.
- [25:21]
Melissa Lee
Will that slide continue or can shares bounce back?
- [25:25]
Advertiser
We'll debate. And it's not just retail. Novo Nordisk heading sharply lower as well. The latest data hitting that name and.
- [25:34]
Melissa Lee
Why it's cutting ties with him and hers on their weight loss drug deal.
- [25:38]
Tim Seymour
You're watching Fast MONEY live from the.
- [25:40]
Melissa Lee
NASDAQ market site in Times Square. We're back right after this.
- [25:51]
Gene Munster
Ryan Reynolds here from Mint Mobile.
- [25:53]
Angelica Peebles
With the price of just about everything going up, we thought we'd bring our prices down.
- [25:57]
Melissa Lee
So to help us, we brought in.
- [25:58]
Gene Munster
A reverse auctioneer, which is apparently a thing.
- [26:01]
Julie Beal
Mint Mobile Unlimited Premium wireless. Everybody get 30, 30, better get 30.
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Melissa Lee
Better get 20, 20, 20 better get.
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Dan Nathan
20, 20 better get 15, 15, 15, 15.
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Melissa Lee
Just 15 bucks a month.
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Angelica Peebles
So give it a try@mintmobile.com Switch upfront.
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Melissa Lee
Payment of $45 for three month plan equivalent to $15 per month required. New customer offer for first three months only. Speed slow after 35 gigabytes of network's busy. Taxes and fees extra. See mintmobile.com, on WhatsApp. No one can see or hear your personal messages. Whether it's a voice call message or sending a password to WhatsApp, it's all just this. So whether you're sharing the streaming password in the family chat or trading those late night voice messages that could basically become a podcast, your personal messages stay between you, your friends and your family. No one else, not even us. WhatsApp message privately. Welcome back to FAST Money. Shares of Lululemon continuing to slide. The stock hitting its lowest level in more than five years. Lulu now down more than 33% since cutting its full year earnings guidance about two weeks ago. CEO Calvin McDonald saying on that earnings call that he is not happy with US growth and cited a cautious consumer. Tim, you pointed this out on our.
- [27:15]
Dan Nathan
Earlier call today because I think you've got two forces that are working against them. One is the fact that they have this intense competitive landscape. They have margins that are facing that I think are confronting them. And they went into this downward spiral and it really has been a spiral. Stocks, I don't know, down 46% off its 52 week high. And it did it also at a time when I think there's cyclicality for athleisure. I just think there are trends here and whether you're looking at deckers, whether you're looking at some of the other high profile apparel or, or footwear names, I think it's an issue. And again you get back to valuations in this name and I think they mean almost nothing at this point because it is trading 50% cheap to where it was on a five year. It's trading 60% cheap to where it was on A 10 year. And that to me doesn't mean anything.
- [28:02]
Julie Beal
Specialty retail. You know again, Jeff Mackie say it's where hope goes to die. And we are on the other side of that now. And it happens. Listen, you look what happened to Under Armour. I mean it happens to all these companies. They have these tremendous growth arcs. They dominate the space, their leaders are the innovators. Competition comes in, they rest on their laurels and everything goes away seemingly overnight. And that's what's happened here.
- [28:23]
Dan Nathan
But you are still wearing stuff to, to your yoga classes, right?
- [28:28]
Julie Beal
Boxer briefs are fantastic.
- [28:29]
Melissa Lee
Yoga.
- [28:29]
Dan Nathan
You go to hot yoga. Right? And I tell the folks your favorite.
- [28:33]
Tim Seymour
Yoga position really, really quickly though, Tim.
- [28:35]
Julie Beal
That doesn't want me to.
- [28:36]
Tim Seymour
Really quickly you. So have the guidance been cut a few quarters in a row? It's so like they're still expecting single digit mid to high single digit earnings and sales growth 15 times. You know what I mean? At some point these guys also get their stuff together and they turn around at some point.
- [28:51]
Dan Nathan
I think that I'm more worried about for a lot of these names, the, the cyclicality in the space. I think the consumer, the consumer is tapped. The only other than guy who needs 16 pairs of yoga pants. I think most people do not. Yeah, the leggings and that belt that you wear. Isn't there a belt that goes along with that?
- [29:08]
Julie Beal
I'm not saying that like you're trying to make fun of me, like I'm.
- [29:10]
Melissa Lee
Somehow supposed to be matter of fact.
- [29:11]
Julie Beal
I mean it's, I'm very proud of my leggings and my boxer briefs. Very comfortable.
- [29:16]
Melissa Lee
By the way, gmi just to keep this on a trade. Julie, a Nike or a Lulu? Because you could make the same, you can make a lot of the same arguments for Nike.
- [29:27]
Guy Adami
Yeah, it's a woof for both. Honestly, it's, that's a tough choice because I think a big problem that I see with Lululemon is that when they identified at their investor day, you know what they need to do to get their act together. A lot of it is resting on innovation. And my challenge is that I think there's a lot of opportunity for innovation in shoes and footwear, leggings. It's a little bit harder for me to see how innovation is going to dig them out of this hole, especially if we do see kind of a cyclical shift away from Athleisure Nike. I think you can make a better argument for, for there being a real opportunity for them in terms of innovation and stores. The productivity that a Lululemon store has is still very high. So there's not a ton that lets it stay there. It can go down quite a bit. The operating margins can contract. So I think that the valuation of 15 times is cheap, but that assumes that we have a good solid hold on earnings. And I don't think we have that year.
- [30:24]
Melissa Lee
Coming up, shedding pounds in partnerships. Why Novo Nordisk is cutting ties with Hims and hers and their weight loss drug deal and the latest data hit pharma stock. The details when Fast Money returns stick around the whole show.
- [30:43]
Dan Nathan
What else would it be?
- [30:44]
Melissa Lee
I mean, welcome back to Fast Money. Stocks climbing as Iran's retaliatory strike on a US base and Qatar resulted in no casualties. The Dow S and P and NASDAQ all jumping about a percent. Crude and Brent both settling more than 7% lower. Shares of Circle Internet Group and fintech firm Fiserv higher today after Fiserv announced it will launch a stablecoin relying on Circles infrastructure. Shares of circle now up 750%. That's all since its IPO earlier this month. Well, Novo Nordisk down five and a half percent for its worst day in over two months despite giving positive updates on its next gen weight loss drugs at this year's ADA Scientific sessions. The company also announcing an end to its direct to consumer partnership with Hims and Hers Health sending Hims and her stock down 34%, its worst day on record. Angelica Peebles has got all the details. Angelica? Melissa, really ADA was not a great meeting for Novo. Now, going into the weekend, we knew that its next closest weight loss shot, Calgary SEMA produced similar weight loss to Lilly's Zeppelin. And we know that Calgary summer comes with slightly more side effects after this weekend. And we also learn more about Novo shot another one in the pipeline, Amicretin, and that showed promising weight loss. But concerning rates of side effects in a small early trial, they are advancing it. But there's now some more questions there. And then this morning, like you mentioned, Novo announcing that it's ending its collaboration with Hims and Hers to sell discounted WeGovy on its website. And that's just one month into this partnership because of hims quote deceptive promotion and selling of illegitimate knockoff versions of WeGovy that put patient safety at risks. Now him CEO Andrew Dudham firing back saying that Novo quote, increasingly pressured us to control clinical standards and steer patients to Agovy regardless of whether it was clinically best for patients. And HIMSS will continue to sell compounded GLP1s and the brand name WeGovy, just not at that discounted cash price that they were getting from NovoCare. A Novo executive telling me that they expected hims would eventually pivot away from compounded drugs over time. And then hims pointing me to a statement, statements that they've made in the past that they never planned to do that. So a really messy breakup here, Melissa. All right, Angelica, thank you. Angelica Peebles Amgen, by the way, also dropping almost 6% today after disappointing results for its once monthly weight loss shot. Maritide patients without type 2 diabetes losing an average of 20% of their body weight after one year. But the company reporting a high rate of side effects and discontinuations. It plans to adjust its dosing schedule in a phase three trial. For more on the obesity drug race, Jared Holz joins us here on set. He's a healthcare sector strategist at Mizuho. Jared, great to have you with us. Novo seems to be getting punished repeatedly for disappointing cargrassema data. And at the same time, we also got, you know, the disappointment from Angen, but also positive news out of Eli Lilly when it comes to the oral candidate which has a safe and clean liver profile and then also the injectable amylin, which gives you weight loss with less muscle mass loss loss. So it makes it look like Eli Lilly is the king of the heap here.
- [33:47]
Gene Munster
I think so. I mean, I Think that's the takeaway from this weekend. You know, we all kind of went into it trying to ascertain whether there were, you know, different disparities in the market that we could kind of glean from. From a data standpoint, it just doesn't look like anyone's even close to Lilly at this point. I mean, Novo is the second best, I guess, because they've been on the market the longest and they have 33% of the market. But based on the oral data from Lilly, looking pretty clean and everything else in the pipeline, I think it's Lilly and then everybody else.
- [34:15]
Melissa Lee
So for Cargrassema, how much do you just sort of write down that pipeline, or is there still hope they will produce great, you know, the promised 25% weight loss in a later trial?
- [34:25]
Gene Munster
I just don't know who's looking for 25% weight loss.
- [34:29]
Melissa Lee
That is like a 22 or something.
- [34:31]
Gene Munster
Exactly. Like when you. When you look at the difference between the weight loss statistics, I'm really not sure anyone is seeking that out other than people who are just definitively obese beyond kind of a normal 30 BMI. Someone much higher might want to go for something like that.
- [34:47]
Julie Beal
Last time Jared was on, I asked him if Novo was out of the woods. He said no, the Stock is down 10% since. Well done by you. So here, let's pivot to Amgen. Even if you back out this business for them, it's a company with a tremendous pipeline. Trading now maybe 12.5 times next year's numbers. My question is, is the stock just too cheap here, despite this news that Mel just talked about?
- [35:09]
Gene Munster
Yeah, I don't think it's cheap at all. I mean, pharma multiples have come down. The average is right around 10, I want to say. And they have a massive cliff, too. I mean, we always talk about Merck and Bristol, but over 50% of their revenue goes away by the end of the decade or shortly after, in addition to those other peers. So I'm not really sure. 12, 13 times is actually cheap. I think on a historic basis, for sure. And we talk about this a lot, relative versus absolute. But I would rather wait for Amgen to come in because all the other peers have sold off tremendously. This one is kind of hung in there.
- [35:40]
Dan Nathan
So I guess that gets me into the biotech discussion versus traditional pharma. I mean, biotech actually has had a pretty decent run. It's been under some pressure, but there have been performance, and there is some sense that there are more catalysts to M&A. And whatnot. So for a lot of investors, not buying a particular name, but buying either XBI or ibb, I mean, I mean, just some thoughts on that, because it was a storm, it was a winter storm for a long time, and it feels like the environment's changed.
- [36:03]
Gene Munster
Yeah, Tim, I think that's right. Don't love biotech by any means. I think we still have a lot of things to kind of clean up. But when we consider, you know, just the revenue degradation at the pharma level and what these biotechs offer, there must be more M and A. Even if we don't believe that the assets that are out there are that superior to what, you know, pharma may have in its pipeline, there needs to be some sort of, you know, appreciation that we're going to see.
- [36:30]
Dan Nathan
And big Pharma, I mean, a lot of these guys need to do something.
- [36:33]
Gene Munster
They must. I think almost all of them have to do something. I mean, even Pfizer, that's done six deals since the pandemic, has spent $60 billion, is on record saying that they're looking for more assets potentially in this obesity area.
- [36:46]
Melissa Lee
And last question on Amgen, going back to that stock, is today's decline, does it basically wipe out the potential of merit? I mean, they are going to launch new studies to look at sleep apnea as well as cardio and the impact there. So is there hope for this as a commercial drug or is that just.
- [37:03]
Gene Munster
I mean, I wouldn't assign too much hope to it. Again, like, the market I don't believe is demanding another modality. Like, do we need a monthly injection? It would be great if the data were better, but I don't really think patients are asking for it. I think the weeklies are very good, the data from Lilly is good. And then next year we're going to have an oral. So unless the side effect profile changes with this new dosing that they're working on, I'm not really sure there's much value here. Not to say that there isn't in the models. I think we'll have to see over the next 6 to 12 months what the valuation looks like as analysts adjust their numbers.
- [37:36]
Melissa Lee
Right. Jared, great to see you. Thank you.
- [37:37]
Gene Munster
Thank you.
- [37:38]
Melissa Lee
Jared Holz. All right, Tim, you bought Novo thinking that it was too cheap. Cheap? Do you regret it or no?
- [37:45]
Tim Seymour
I don't.
- [37:45]
Dan Nathan
I don't regret it at all. I mean, I'd like to see better price action, but this, this type of response to, to these announcements doesn't surprise me. I Still think the first of all the price kind of elasticity dynamic of where you're going to see more supply and where there are sensitivity there. The GLP market is probably going to double between now and 2030 and even if they lose 20 points of market share, their sales are going to double by 20, 20, 30. So I just think this is the largest stock in Europe. It's a stock that I think people should own and it's, it's been less about a valuation call than I think the stock's been overly punished for that same conversation we had. Some of the results in terms of percentage of weight loss I think are overly scrutinized.
- [38:23]
Melissa Lee
Julie?
- [38:24]
Guy Adami
Yeah, I think it's a really difficult situation where this company was not really set up for the success that it enjoyed. And I think you really see that in the management that's shake up that we're seeing. It makes it really hard to feel super confident that directionally they're where they need to be. I agree at a base level that for them they should be where they need to be in terms of having GLP ones being part of the, that, that exploding growth that I think we'll continue to see. Right. It's endless. But I really do wonder if what the pricing dynamic is going to look like. And so you could say that there would be two or three times as many people on GLP1s in five years but if the price is cut by, you know, BY it's only 10% of that, it really changes the dynamics for them.
- [39:10]
Julie Beal
We had the CEO of Insmit on, I think it was June 11, William Lewis. The stock I think closed around 94, had a ridiculous move that day and we collectively said it probably wasn't over and it's just built on that move. So there are places at work. I mean despite this move in sm, I still think goes higher from here.
- [39:29]
Melissa Lee
Coming up, a Robotaxi rally. Shares of Tesla charging higher after the EV maker rolled out its latest tech in Texas. Details from the launch and when you can expect to see driverless cars on your streets when fast money returns. Welcome back to fast money. FedEx shares jumping 2% today. The transport giant reports quarterly results after the bell tomorrow. The company also saying goodbye to its founder and longtime CEO for Fred Smith who passed away over the weekend at the age of 80. He's been on the network many times. Yeah, Fred, great guy. In terms of earnings obviously this is a bellwether for lots of things. Economic indicator. Dan, you pointed this out on the call.
- [40:14]
Tim Seymour
Yeah, just I think the earnings this week are so interesting. There's little bits and pieces. We have Micron, obviously, we have Nike and this one in particular. You know, you hear headlines. You saw the volatility that we've seen in the, the airlines just over the last few weeks or so in and around this geopolitical situation. So obviously a company like this has a mulligan, right? The volatility that you see in oil, the volatility that you see, you know, about trade, I mean the list goes on and on. So I think if it's the sort of thing where they actually can materially guide up and make investors feel a little bit better about this past year, I think it works on a whole host of levels.
- [40:45]
Julie Beal
We just traded down to the third point of a six year uptrend line starting in 2019 when this stock was probably $125. It has not traded well. I mean I've tried to make a case on valuation. Most of the time wrong because it's dirt cheap. But I actually think this is a quarter you can be long into the numbers for.
- [41:04]
Dan Nathan
I do too. I think it's a case where it's not about valuation because it's very cheap. And I think it's a case where there is some, excuse me, cyclicality here that can be bought. So I'll just.
- [41:15]
Tim Seymour
Well, just really quickly, you're a little verclemp the fact that the three of us like this thing. You gotta have it. You might want to go the other way. I'm just saying.
- [41:23]
Julie Beal
Can I just say one thing? Mrs. Seymour is watching right now. Tim's mom, who's lovely and she's concerned about me and she reached out to her son because I'm. And Tim's making fun of me and she knows that her son was raised better than that. So thank you Mrs. She's a caring.
- [41:38]
Dan Nathan
Woman and thanks for tuning in. Mom.
- [41:39]
Melissa Lee
I didn't actually know that you were worried about Guy. I don't give you all my tolerance, but lactose. Coming up, Texas. Tesla's new Texas Tech details from the company's Robotaxi rollout and the big reaction the stock. That's next. More fast money into. Welcome back to Fast Money. Tesla shares surging to kick off the week after the EV maker finally rolled out its Robotaxi service in Austin, Texas this weekend. Some of the vehicles were autonomous while others had in person drivers or remote monitors. But Sunday's invite only debut marks the first step toward fulfilling a huge technological promise. Let's bring in Fast Money friend and Deepwater Asset Management Managing Director Gene Munster for more. Gene, great to have you with us. Was it worth 8%? I mean there's a guy sitting in the front seat. It was a very limited amount of Austin, Texas and the only people who got rides were stock devotees and social media influencers.
- [42:45]
Angelica Peebles
I think the answer, Melissa, is yes it is. And stick with me here is that if we look at just today's event, it doesn't add up to that 8% move. But we put in the context of what's happened over the past five years and seven years and as somebody who believes in everything they're building, this comment is going to seem harsh, but this company has largely over promised and undelivered on these big milestones. And so when the fact that they got it off and well, it was limited I think is an encouragement that they are moving towards the right direction. And the other piece about that 8% move is this direction is not a small direction in terms of the impact that it could have to the model. I mean it could fundamentally change the profit picture. I mean the vast majority of this company's income could come from autonomous services, whether it's FSD or Robotax or Optimus. And so. So in that context, and we're still at a $1.1 trillion market cap, it still feels like there's room to go if you believe in that vision. And so I see this as an appropriate move to the stock today.
- [43:50]
Tim Seymour
Ed Gene, at what point do you think that contribution actually starts to happen for this stock? Because if you look at the EV business, it couldn't be worse. It's literally at the worst spot that it's ever been. If you go back a decade or so. So to believe that it's worth a trillion on its way to two or three, you have to believe in sooner than later that there's going to be a material contribution. And I just can't imagine that the margins for the first couple of years are going to be any good. You have to assume they're going to be losing money on this sort of trade. So I'm just curious thoughts there.
- [44:20]
Angelica Peebles
On the maybe start with the second piece of that on the losing money, a different obviously set up versus what's going on with Waymo and that 100,000 plus per vehicle. This is an asset light approach. They're funding the initial vehicles probably for the next year, but most of this is going to be funded. So I think that this business could be profitable probably within a year or two, albeit the revenue is going to be Pretty modest too. Which gets to the first point of like when does this actually, you know, we've been waiting and waiting and this was a big step forward, but when is it actually going to be impacting the model? It probably isn't for 2030. And to put some context around like how what potentially could be the impact by 2030 is that if they're on a path by 2030 to get to 70% share of the ride market, actually in 2030, if they hit like a 30 or 40% share of that market, it's going to basically double their operating income. So this is still way out there. And, and then how does that jive if we're still talking five years out there? How does that jive with my feeling that this is a justified move? And I think the answer is that yes, it's five years out there, but it's an undeniable truth, is that this market is going to be fundamentally changed and it's a big market, $90 billion a year in the US alone. And it's really going to come down to Waymo and Tesla and Uber and Lyft are largely going to be irrelevant in that future. And so I think that's the piece that nugget, that carrot that's out there still is not going to go away, despite what I agree is going to be a really, this is going to be an ugly year on their car business.
- [45:50]
Melissa Lee
Gene, great to have you with us. Thank you.
- [45:52]
Angelica Peebles
Thank you.
- [45:53]
Melissa Lee
Gene Munster, Deepwater Guy, hundreds of thousands.
- [45:57]
Julie Beal
If not a million self driving Tesla's by the end of 2026, I think is what Elon Musk said. And maybe there's some existential risk to Uber. I just don't think that's it. Uber sold off on these sidelines before. I think you own Uber on the back of this.
- [46:10]
Melissa Lee
All right, up next, final trades, final trade time. Julie Beal.
- [46:23]
Guy Adami
You know, I always think of the guys on the panel as solid and reliable and so is FactSet, especially after.
- [46:29]
Melissa Lee
The most recent earnings this panel.
- [46:32]
Dan Nathan
Tim well, Guy, my mom doesn't think I'm salvage. My mom has said you've been mean to Guy today. And then she said thanks Guy, and there's a little heart next to it. So, you know, but I love GDX by the way. Gdx.
- [46:44]
Tim Seymour
Dan yeah, I agree with the facts that it's underperformed this year, but probably that guidance should be encouraging.
- [46:49]
Melissa Lee
Lulu.
- [46:50]
Tim Seymour
Tim's Lulu popping dear. A cleanup.
- [46:52]
Julie Beal
GUY well, I'd like To be long, Mr. And Mrs. Seymour, if I could. But in addition to that letter C.
- [46:58]
Melissa Lee
Melissa Lee thank you for watching Fast Money. See you back here tomorrow. 5 for more fast mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer get ready for.
- [47:51]
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