Rates Rise After hot CPI data… And The Latest On China’s Property Crisis 02/12/25

Summary

CNBC's "Fast Money" Podcast Summary Episode: Rates Rise After Hot CPI Data… And The Latest On China’s Property Crisis (02/12/25)
Release Date: February 12, 2025
Host: Melissa Lee
Panelists: Steve Rosso, Karen Feiderman, Carter Worth, Guy Adami
Location: Studio B, NASDAQ Market, Times Square

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1. Market Reactions to Hot CPI Report and Rising Rates

The episode kicks off with a discussion on the significant rise in yields on 10-year Treasuries, which spiked above 4.6%—the largest jump in nearly two months. This surge follows a hotter-than-expected Consumer Price Index (CPI) print for January, where consumer prices rose by 3% year-over-year, and 3.3% excluding food and energy (00:00).

Key Insights:

• The higher CPI data diminishes hopes for imminent Federal Reserve rate cuts. Markets are increasingly pricing in only one rate cut this year.
• Although stocks initially dipped over a percent after the report, major indices recovered by day's end, with the Nasdaq managing a slight gain, reflecting market adjustment to the reality of prolonged higher rates (00:00).

Notable Quotes:

• Steve Rosso (04:08): "Worst case scenario, inflation spikes, we go into a recession, it cuts rates."
• Melissa Lee (05:18): "What do you see for rates?"

2. Implications for the Bond Market

Panelists delve into the bond market's response to the inflation data and the potential for future Federal Reserve actions.

Key Insights:

• Guy Adami (02:32): Expresses surprise at the market's resilience despite rising yields, suggesting that higher rates will eventually become a significant headwind for the markets.
• Karen Feiderman (03:05): Highlights the role of deregulation and pro-growth policies as double-edged swords—fostering growth but also contributing to inflationary pressures.
• Carter Worth (05:19): Discusses the stability of the 10-year yield, indicating it's unlikely to drop below 3%, framing the current environment as “Goldilocks” where rates are neither too high nor too low.

Notable Quotes:

• Steve Rosso (06:39): "What drives equities isn't inflation, it's valuation, which is driven by how easy monetary policy is and growth."

3. Corporate Earnings Highlights

The podcast covers the latest earnings reports from key companies, emphasizing their impact on the stock market.

Cisco:

• Christina Parts Nevels (20:26): Reports that Cisco surpassed expectations with strong subscription-based revenue, a $15 billion buyback, and an increased dividend. The company’s infrastructure sales surged, indicating robust demand for AI-related infrastructure (20:30).

Robinhood:

• Christina Parts Nevels (23:01): Highlights Robinhood’s impressive quarter driven by substantial growth in crypto and equity trading, with revenue doubling and assets under custody jumping 88%. The company is expanding its platform to include innovative asset classes despite earlier setbacks (23:01).

Chevron:

• Phil LeBeau (16:42): Announces Chevron’s plan to lay off up to 20% of its workforce to cut $2-3 billion in costs by the end of next year, impacting approximately 9,000 employees (17:26).

4. Auto Industry Under Pressure from Tariffs

Ford CEO Jim Farley criticizes President Trump's tariff policies, asserting that they threaten the American auto industry by increasing costs and allowing foreign cars to flood the market.

Key Insights:

• Jim Farley (14:04): Emphasizes the chaos and cost increases due to potential tariffs on steel and aluminum, estimating a $400-$500 cost increase per vehicle.
• Steve Rosso (18:04): Notes that Ford's struggles are part of a broader industry challenge, comparing them unfavorably to GM’s performance.

Notable Quotes:

• Phil LeBeau (14:04): "Jim Farley's message to Washington is clear: we need certainty."

5. China’s Property Market Crisis and Potential Bailout

Addressing the ongoing challenges in China's real estate sector, the podcast discusses the possibility of a government bailout for one of the country's largest property developers, China Vanke.

Key Insights:

• Shahzad Kazi (32:16): Explains that Beijing aims to stabilize the property market to restore consumer confidence, suggesting that selective stimulus measures are likely but may not be as extensive as market expectations.
• Carter Worth (35:03): Highlights the complex interplay of tariff risks, geopolitical tensions, and internal political maneuvers that could hinder the effectiveness of any bailout efforts.

Notable Quotes:

• Shahzad Kazi (33:12): "The question is how large the stimulus will be and how effective it is going to be."

6. Growth of Black Investors in the Market

The podcast features Sharon Epperson discussing the increasing participation of Black Americans in investments across stocks, real estate, and cryptocurrencies.

Key Insights:

• Sharon Epperson (38:06): Reports a rise in stock ownership among Black households from 31% in 2016 to nearly 40% in 2022, driven primarily by younger investors under 35 seeking financial freedom and short-term gains.
• Cultural Shifts: The influence of social media platforms like Instagram and TikTok, alongside educational initiatives, has empowered more Black investors to enter the market.

Notable Quotes:

• Sharon Epperson (38:43): "They're eager to make money in the short run, focused on financial freedom."

7. Spotlight on Matter’s Surge and the Magnificent Seven

Examining Matter's impressive 18-day winning streak, the panel compares its performance to the broader Magnificent Seven group of mega-cap stocks.

Key Insights:

• Carter Worth (41:10): Analyzes Matter's performance relative to its peers, noting that while Matter is up nearly 25% in the year, the overall Magnificent Seven index is slightly lower, suggesting Matter is outperforming despite broader market trends.
• Valuation Concerns: Panelists express caution over Matter’s rapid ascent, questioning whether the rally is sustainable and hinting at potential pullbacks.

Notable Quotes:

• Guy Adami (19:00): "It's not a timing tool, but if you traded evaluation and you don't knock the COVID off the ball, you're going to be punished."
• Carter Worth (35:25): "The market is sniffing out these trades and will likely correct soon."

8. Legal Settlement Between Trump and Elon Musk

The episode touches on President Trump's lawsuit against Elon Musk’s X platform, resulting in a $10 million settlement.

Key Insights:

• Steve Rosso (26:30): Details the lawsuit’s background, emphasizing its connection to Musk’s management of X and the broader implications for his business dealings and political influence.
• Political Nuances: The settlement reflects the intertwining of business and politics, especially considering Musk's significant campaign donations to Trump.

Notable Quotes:

• Steve Rosso (26:30): "This is Elon Musk's company, and we know Elon Musk's role in the White House right now. So a little strange settlement happening here."

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Concluding Thoughts

The episode of "Fast Money" provides a comprehensive analysis of the current economic landscape, highlighting the interplay between inflation, Federal Reserve policies, corporate earnings, geopolitical tensions, and emerging investor demographics. The panelists offer nuanced perspectives on market reactions, sector-specific challenges, and the evolving dynamics of investment participation among diverse communities.

Final Notable Quote:

• Melissa Lee (34:00): "Investors in the Chinese market are keen to know if there will be stimulus, and how it might impact their investments."

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For more detailed insights and updates, visit Fast Money on CNBC.

Transcript

[Melissa Lee]

What does it mean to be rich? Maybe it's about measuring life and laugh lines and time. Not by how much you have, but by how often it stands still. At Edward Jones, we believe the key to being rich is knowing what counts. Our dedicated financial advisors provide one on one support meeting you where you are through all of life's changes. Because what matters most is living a life you love. Let's find your rich together. Edward Jones, Member, SIPC what if your limited inventory had unlimited potential? What if your biggest risk was not taking one? What if you could make every move matter? Bank of America's business solutions can help bring your biggest what ifs within reach. Find out how our digital tools, cutting edge insights and trusted expertise can work for your business. What would you like the power to do? Visit bankofamerica.com bankingforbusiness to learn more. Bank of America is proud to be the official bank sponsor of FIFA World Cup 2026. Live in the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. All revved up. Ford CEO Jim Farley saying President Trump's early tariff moves are threatening to, quote, blow a hole in the auto industry and open the door for foreign cars to flood our shores. The details on this blunt assessment coming up +18 and counting met as magical run rolls on now up 18 straight days and more than 18% during this winning streak. Well ask the Chartmaster where the stock is headed from here. And later inside the numbers of Robinhood results, the details on Chevron's major job cut announcement and CBS mounting a massive comeback. What is behind the rebound? I'm Melissa Lee. Come to you live from Studio B at the nasdaq. On the desk tonight, Steve Rosso, Karen Feiderman, Carter Worth and Guy Adami. We start off with the great rate rise. Yields on 10 year treasuries spiking back above the 4.6% mark, seeing their biggest basis point jump in nearly two months. The move coming after another hotter than expected CPI print for January. Consumer prices rising more than expected 3% from a year ago. Excluding food and energy, prices rose 3.3%. That news slash hopes for a Fed move anytime soon. Markets now pricing in the central bank will cut rates just one time this year. Stocks initially sank on the report. Major indices all down over a percent at the lows. But end of the day well off the worst levels. The Nasdaq even managed to eke out a small gain. So markets come to terms with the Prospect that rates will be higher for longer, that maybe inflation could be stickier for longer.

[Guy Adami]

Guy today. Yes, absolutely. I'm surprised. Again, if you had told me what would have happened, I'd been S and p is down 100 handles easy, given a run. You know, Karen, I think it was last week, Thursday maybe, said she was short the tlt. She basically top ticked it. It's gone down ever since. And if you look at that trend line that we talked about in the TLT since September, that downtrend is intact, meaning I think yields continue to go higher. What does that mean? Well, I don't think it's particularly favorable for markets. Again, I'm surprised the market behaved as it did, but it's just a matter of time before rates become a huge headwind, so.

[Karen Feiderman]

Well, I've been short the TLT for a while, covered some back and forth, but I generally think, and I am still very much positioned for the CPI continues to be hot, I do think to bring back a word that is, you know, a terrible word, potentially transitory items in there, when you take out some of the effects and we don't know exactly what they're going to be. California fires, for example, maybe it'll be a little less hot going forward. But I do think that this administration has unleashed animal spirits. And the combination of excitement about that and regulatory changes is sort of pro growth, which is good, but also I think inflationary, Even though they hope to not have it be inflationary. I think it will be, yeah.

[Melissa Lee]

There were a number of items that saw their biggest increases ever on a monthly basis which were shot prescription drugs, medicinal drugs, parking, recreation, audio and video, video services. Then you had eggs. That was the biggest jump in a decade. I mean these, these things hurt.

[Steve Rosso]

Like I bought all of those things this month.

[Melissa Lee]

Everybody has. Who hasn't.

[Steve Rosso]

But you know, eggs are eggs. You had the, the bird flu, Right. So you had the killing of 30 million birds.

[Melissa Lee]

Okay, so that's a one off. Then there's also seasonality because people tend to raise prices the beginning of the year in January. So there might be some of that going on.

[Steve Rosso]

Yeah, but still there's a bunch of stuff. But look at, look at it this way. Worst case scenario, inflation spikes, we go into a recession, what happens? It cuts rates. So do you think we're going back to a Fed put back in play when you announced on the show, is the market just, you know, letting it roll off its back? Could that be the reason why the market is letting it roll off its back? That eventually, if Things are the worst case scenario, then he cuts rates.

[Melissa Lee]

So you're saying win, win situation.

[Steve Rosso]

I think it's a win.

[Melissa Lee]

And hot Fed cuts. Win.

[Steve Rosso]

Deregulatory environment.

[Melissa Lee]

Yeah, win.

[Carter Worth]

Yeah.

[Steve Rosso]

So deregulation, lower taxes, pro growth policies. I think Karen hit on a bunch of stuff. Could we overheat? I don't think we're going to overheat. I think we'll probably have a little bit of a spike and then maybe pull back.

[Melissa Lee]

What do you see for rates?

[Carter Worth]

Yeah, I mean as a pattern. Right. It's what a pair of twos is. It's not.

[Melissa Lee]

You're going to.

[Carter Worth]

You knew I was. Because you know, that's what it is. What was that tell. But the, but the point is that we're looking for inflection points. We all are. Whether we're looking inflections on the income statement as a fundamental analyst or on the, the balance sheet. Wow. The debt's being paid or in the price action, the chart. And it just doesn't feel as though this is a great inflection point. We're about to really go higher or go lower. It turns out that the cost of ten year money has been at four and a half or one year and four and a half or two years. We're getting into almost three years. This where it's, it's Goldilocks and so it doesn't go to 5 and 6 and 7 and it keeps not dropping down to 3. Here we sit.

[Guy Adami]

No, it's fair. I mean equities and it has been, I mean, I mean the S and P is within what, half a percent of an all time high. So clearly the equity market cares about none of this. But you know it's interesting, inflation is a problem. I mean they were thrown around transitory three years ago, they were dead. They couldn't have been more wrong. And it's still sticking around and it's only, I think going to get worse on the back of all the things and Karen's talking about, which means almost by definition rates have to go higher. Now the Fed can do whatever they want in the short, at short end of the curve have added, as Dan would say, they don't control anything else and they're learning the hard way that they don't. And you know, you may want 10 year yields to go lower, you may want mortgage rates to go lower. They're not. And if they do, it's for the wrong reasons.

[Steve Rosso]

And if they, if they do, I think to Guy's point, what is the 10 year rely on Pro growth growth policies and people thinking that they have a better chance of putting money in the market now and longer term fiscal responsibility. What have we seen? First time anybody on either side of the aisle in my, in my lifetime, with the exception of Clinton, that we've seen somebody worry about deficits at this point. So that has more control over the 10 year than this.

[Melissa Lee]

So you mean the cost, all the cost cutting that's happening, all the cost.

[Steve Rosso]

Cutting that potentially could happen and the fact that we have pro growth policies could lower the yield on the 10 year and that's why it's been so tame.

[Karen Feiderman]

We haven't even started to see tariffs yet. Right. We are one day into tariffs. Right. Who knows? Could be reversed, maybe not. But I do think that's a wild card that we don't yet know how that's going to. You could see that being inflationary.

[Melissa Lee]

We saw this game before, right? I mean when their tariffs were on metals, it worked its way into finished goods, machinery, et cetera. Ford CEO worked. We're going to talk about.

[Karen Feiderman]

And if everything's make it in America, you could see how that would be very inflationary as well. But let's remember, I don't know that would really happen.

[Steve Rosso]

Trump left office, the inflation rate was 1.9% and we saw 1.0 on tariffs. Have we had a different backdrop to the environment? Of course we've had, we had the pandemic. You have a bunch of huge issues right now. But we've seen the 1.0 of tariffs and it didn't result in much higher inflation. He left with a 1.9 CPI.

[Melissa Lee]

But all of this, I mean, we talked to Paul McCully about this. Yes, this, this is uncertainty. It's not risk risk. You know the parameters of the game. Uncertainty is. You don't know what the parameters are. And that's where we are for both businesses as well as consumers at this point who are feeling this inflation in their pocketbooks.

[Guy Adami]

100% they're feeling without. I mean, that's why the, I mean there are a lot of reasons the election went the way it did. That was one of the big reasons, because people were feeling it in their pocketbook. And the Biden administration would trot these people out saying that they're winning the war on inflation. And most people with half a brain said, no, you're not, you're losing. And we're losing on the back of it. And people are still feeling it. I mean, it's not going away anytime soon. And that seemingly is manifesting itself in these numbers. These numbers today surprise a lot of people. There's no way to sugarcoat it. The trajectory is basically reaccelerating to the upside.

[Melissa Lee]

Our next guest says today's hot inflation report in Trump's anti growth policies might create opportunities in the bond market. Damp Spring Advisors CEO and Chief Investment Officer Andy Constant joins us now. Andy, always great to see you.

[Andy Constant]

Hey Melissa, how are you?

[Melissa Lee]

Which bonds?

[Andy Constant]

Well, so I think what's happening is, and I heard it in the, in the discussion before me, there's great policy uncertainty. And not only is there great policy uncertainty, there's not necessarily consensus on what policies will actually do. So for instance, I think it's without question that the deregulatory environment will be disinflationary and pro growth. On the other hand, immigration reducing the supply of labor is anti growth. Tariffs are anti growth and expenditure cuts are anti growth. Literally the government spends less. That means the economy contracts and those are the policies that I call the Trump policies that are anti growth. And so the question is what drives equities? That's what a lot of your audience cares about. And what drives equities isn't inflation, it's valuation, which is driven by how easy monetary policy is and growth. And so it's not surprising to me that when you get a hot inflation print, bonds sell off, but equities don't necessarily have to sell off until there's a negative growth impulse. And I think that's heading our way. For instance, last summer we had extremely accommodative financial conditions. We had government spend, robust government spending, and the Fed was signal signaling a cutting cycle. It's not surprising that the data that typically lags what are very easy financial conditions is showing up now as very strong data. However, financial conditions have aggressively tightened over the last since the September rate cut after the election and then subsequent with additional cuts, bond yields have risen a lot and that has tightened financial conditions. And the Fed is on permanent odds. Not only is only one cut expected this year, but the yield curve is entirely flat for three or four years. And so that means no cuts are expected beyond next this year. And so with tightening financial conditions and anti growth policies, albeit one policy is still a tailwind, which is deregulation. It is an environment where you might get a growth slowdown.

[Karen Feiderman]

So Andy, that's Karen, thanks for being on. We know the Treasury Secretary really sort of has the 10 year as the mark of success there. The President often seems to want the market thinks of the market. How at odds are those two things to get the 10 year where they want it to be. Does that have to be.

[Steve Rosso]

Yeah, I mean I think that and.

[Andy Constant]

I think the 10 year responds to disinflationary solid growth. Steve mentioned fiscal responsibility, expenditure, cutting, all of those things are what if I were announcing the policies that are being announced as we over the on the Trump agenda? What I would want to be measured against is falling 10 year yields. And I think that's what Secretary Besant pointed to. And I think he's attempting to point his only important constituent, the President, to something that would make sense, particularly when the policies themselves may not be that great for equities in the near term.

[Melissa Lee]

All right, Andy, we got to leave it there. Always great to see you and get your take constant of damp springs. So what do you see for equities? What do the charts say?

[Carter Worth]

Well, I mean what we know is that this has been a great run and equities are popular. The word expensive should never be used because valuation is the worst timing tool of all. And no one knows. You can pick any stock in The S&P 500 covered by 20 analysts. $50 stock. Some believe it's going to 90, some believe it's going to 10. Valuations out the window. There's a relationship over 10 and 20 years in earnings and the share price. But here and now, is the market expensive? I just think it's full. I think there's a lot of complacency. I think a lot of money has been put into the market. And I think caution is the, is the operative word of the day.

[Guy Adami]

You know, we're going to see, we've seen the last couple of weeks, big Companies are moving 5, 10, 15% post earnings up and down and there are a handful of them again tonight. The volatility is in the individual names. It hasn't gotten into the VIX yet. I'm not certain why, but I think it's just a matter of time before it does.

[Melissa Lee]

All right. Meantime, Ford hitting its lowest levels in more than four years. The automaker CEO seeming to break ranks with much of corporate America right now, delivering some harsh words about President Trump's tariff plans. Our Phil LaBeau's got the very latest.

[Phil LeBeau]

Phil and Melissa, Jim Farley, CEO of Ford, said yesterday at an investor conference that he would be in Washington today to convey his thoughts to the Trump administration. We have reached out to find out if he's actually meeting with the president or simply the president's staff. But one way or the other, the message will be similar to what we said what he said yesterday, and this is the quote that got a lot of attention in regards to a question about the impact or potential impact of tariffs if they were implemented. And he wrote, so far what we're seeing is a lot of cost and a lot of chaos. The chaos is because Ford, like GM and Stellantis, have a lot of exposure in terms of manufact in Mexico. And Even though the 25% tariff that was initially announced with Mexico and Canada has been put on hold, Ford has got to make its contingency plans. Even though it has more of domestic manufacturing than its rivals, it still has to prepare for what might happen. As you take a look at shares of gm, Ford and Stellantis since the President was inaugurated, the big question is how much will they potentially pay both in terms of future tariffs? What's the impact in terms of their components? And look at what's going on when you talk about steel and aluminum and 25% tariffs. We reached out to Alex Partners automotive consulting firm. We said, what's the potential impact of a 25% tariff? And they've gamed it out at $400 to $500 cost increase per vehicle because each vehicle has between 2,500 and 3,000 pounds of aluminum and steel in each vehicle. So that's why automakers like Ford and I've talked to Jim Farley about this as much as possible, they are trying to go with domestic sourcing quickly. Take a look at shares of AutoNation. One other note, and they had their earnings yesterday. And during the analyst call, they basically said, look, there is the potential here that you could see one to two years of tariff pain for consumers, depending on what happens with tariffs, if they're implemented, et cetera. And that's based on what they saw the first time around back in 2016-2020, in terms of potential impact there. So Jim Farley's message to Washington and potentially to President Trump is we need certainty. And all CEOs will tell you right now, Melissa, they want certainty. And you and I both know, everybody knows, as you watch the President, this is as much about negotiation as anything else. And I'm not sure they're going to get the certainty they're looking for.

[Melissa Lee]

What is the impact on some of the foreign manufacturers, particularly the ones that also manufacture here in the United States?

[Phil LeBeau]

Depends on what tariff is put in place. Let's talk about if there is a reciprocal tariff coming for vehicles being shipped over from Europe to here. It's about 5% of the US auto sales, though. We were told today, Eamon Javer said that the White House indicated there may be exceptions for the auto industry. What type of exceptions? Unclear at this point in terms of the reciprocal tariffs. So that's the key, Melissa. You need to know exactly which ones are being put in place. The steel and aluminum. I mean, that's a hit to the automakers. Even if you're domestic doing your domestic sourcing as much as possible, you're still going to pay. And I've talked with executives in the auto industry who said they're paying, they will pay in some fashion. Now, is it 400 to $500 for every vehicle? It's a little too soon to tell.

[Melissa Lee]

All right, Phil, thank you. Phil LeBeau. So how do we digest? We saw the reactions initially. Right. When it was revealed that there might be tariffs and we saw all of them sell off very sharply.

[Christina Parts Nevels]

Yeah.

[Karen Feiderman]

You know, and this goes to Ken Griffin's. Exactly what Ken Griffin was saying, that this sort of, you know, chaotic situation isn't good for CEOs. It isn't for just this reason. I mean, the first thing I thought though, I mean, good, that was a bold statement from Ford. And I thought, oh, this is good for Mary Barra. She doesn't need to be the one in the crosshairs. She's feeling the same. I'm sure it's just as chaotic. But let's.

[Steve Rosso]

She said that she can mitigate up to 50% of the tariff headwinds. So I don't think she's in the same position.

[Karen Feiderman]

They've outperformed, maybe not.

[Steve Rosso]

They've outperformed Ford. And I think, I think that Farley to a certain extent is using this as a kitchen sink approach. He's underperformed GM for quite some time. Right now. His EV strategy was nonexistent. Mary Barra has knocked the COVID off the ball at GM. Up 21%. One year performance for down 29%. That's all you need to know about this conversation.

[Carter Worth]

That says a lot. I mean, I'm just looking here. So if you pulled up the MSCI World Auto Manufacturing Index on a three year basis, that index is unchanged. Imagine that where the S and p is up, what, 37. The Q's are up. And this is every stock you can possibly think of, of course. So it's Volvo, it's General Motors, it's. It's Tesla, it's Ferrari, it's. They're all right here. Hyundai, BMW, Mercedes. So this aggregate worldwide, which is very important, speaks to global, is unchanged, 0.

[Steve Rosso]

Results take a Tesla.

[Karen Feiderman]

Is it down?

[Carter Worth]

If you take a test, it probably worse. Yeah. You did an equal weight.

[Sharon Epperson]

Sure.

[Carter Worth]

Tesla's a big weight. It speaks a lot to a lot of things. Do the tariffs make it worse? But, but the point is this is an area to be having not been in for a long time.

[Guy Adami]

No, I think she makes a great point. I mean the conversation is we will try our best to operate in the environment of uncertainty, but quite frankly, I mean, when is it ever certain about anything? And Ford today, I mean, you want to pull up a 40 year chart, today's price is the same price it was in 1990. I mean, so you'll figure that one out.

[Melissa Lee]

Coming up, the earnings keep rolling in. A number of names on the move after hours of details out of Cisco, Robinhood and Reddit ahead. Plus Chevron slashing its global workforce. The oil giant planning to lay off up to 20% of its headcount as it looks to cut billions in costs. What it all means for the company going forward do not go anywhere. Fast money's back in two. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] credit card based on the February 2024 Nelson Report.

[Steve Rosso]

Check out the all new CNBC Sport.

[Melissa Lee]

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[Steve Rosso]

Catch the biggest business stories on the CNBC Sport podcast.

[Melissa Lee]

Listen on your favorite platform. Welcome back to Fast Money Earnings Alert on Cisco, shares are surging on a top and bottom line beat. The company also hiking its dividend and announcing a $15 billion buyback. Christina Parts Nebulous joins us with the latest.

[Christina Parts Nevels]

Christina well, the tech giant beat was powered by its Splunk acquisition, a software provider it acquired less than a year ago. Over half of Cisco's revenues right now stem from subscription based models. But here's what's turning heads beyond the dividend hike you mentioned and the $15 billion buyback. Cisco's infrastructure sales like silicon and systems to tech titans like US actually hit 350 million this quarter alone. Add that to last quarter is over 300 million and they're really racing towards their billion dollar AI target way ahead of year end on the earnings Call which is underway right now. The CEO said he believes customers are still in quote, early days for building out their infrastructure and that enterprise customers are only just joining the mix now. The company is pretty confident and that's showing in the numbers lifting both revenue and profit forecasts for the full year and telling analysts now too that those numbers do account for any proposed tariffs and they're actually not seeing any signs of demand pull through despite those concerns. So shares still up 6%.

[Melissa Lee]

Back with you, Christina. Thank you, Christine. Apart to Navalis guy, what do you make of the.

[Guy Adami]

It's not expensive, you know, the margins are improving. The guide was very good. I mean now you have a stock that all of a sudden it's like what IBM is doing, the stealth rally in these old technology and Oracle throw that in the mix as well that nobody's paying any attention to, I think. And I don't know if our crack staff and EC can do this, but you go back to 99 and we're probably approaching levels that we last saw 25 or so years ago. So good for Cisco.

[Steve Rosso]

Yeah, I think you know that point that we've been making around the table that people are moving away from Mag 7 names because they're just too volatile off of every headline. So what's the second derivative play? It's a company like a Cisco who now is actually making some revenue on AI infrastructure. So they're a habitual beater of EPS. Do you know they've beat for the last 10 years on EPS? These are fun facts that you always find out after because I would have bet on that. Then there's got to be MGM odds on something like that. Old tech is now new tech, safer tech, that dividend and the buyback gets people in that name versus the volatile tech sector.

[Melissa Lee]

All right, let's get more earnings here. Robinhood popping on strong results thanks to growth in crypto and equity trading. That conference call kicked off at the top of the hour. Kate Rooney's got more on this. Kate.

[Christina Parts Nevels]

Hey, Mel. Yeah. So booming crypto and equity volume drove this blowout quarter for Robinhood Co. Beat expectations across the board with strong deposit growth as well. Revenue for the quarter more than doubled at a record 1.1, 1.01 roughly billion, that is. Net deposits were up by roughly 16 billion. Assets under custody jumped 88% and then average revenue per user roughly doubled to 164 bucks. Total funded customers now topping 25 million accounts. And then transaction based revenue. This is pretty much a reflection of trading volume. It was up 200%. Crypto was the standout, growing 700% in the quarter. Options and equity is up 83% and 144% respectively. Interest income also up roughly 25%. We did also get some January metrics just now on the analyst call in the month deposits they said were the second highest month ever. Equities options and crypto volumes, they say we're also all up double to triple digits when you look at the growth rate from a year ago. And then options volumes they say are now at an all time high, at least in January. CEO Vlad Tenev also said they are going to be launching a quote, comprehensive platform for event contracts, calling it an innovative new asset class. That's despite the super bowl contracts being called off at the last minute. It does say they're excited to do more on that. It says they're going to be expanding the availability of crypto tokens as well thanks to the regulatory environment and new administration. We are going to be sitting down with CEO Vlad Tenev. It's walking the street here in San Francisco tomorrow. Guys, back over to you.

[Melissa Lee]

Kate. In terms of the assets that were collected, it was above what analysts had been expecting. They also have been doing a lot of promotional activity to get those assets, to get people to transfer their accounts to Robinhood. Is there any, you know, color on what those assets cost ultimately?

[Christina Parts Nevels]

So that's been interesting. The promotions as you mentioned, to get people off of the other brokerage platforms, they've been slowly rolling that back in previous quarters. Likely to get more of that on the analyst call and sort of the plans. They've sort of narrowed it down a little bit more and focused on specific promotions compared to probably six months ago. There are fewer promotions. But we also got some color from the cfo Jason Warnick about the type of customers. You said they're coming in at a higher base with higher net worth versus what you would traditionally think of as kind of the first time Robinhood traders. The demographic is slightly different. They're going after a more active trader. But again we'll hopefully get a little bit more on the promotions. Also the cost of that they did say marketing costs are going to go up significantly this year. So that could play into to some of the costs for this company going forward.

[Melissa Lee]

All right, Kate, thanks. Keep us posted. Kate Rooney in San Francisco. It's interesting transformation of this company in terms of his Kate Men had mentioned higher net worth individuals having accounts on Robin and not the traditional, I mean.

[Karen Feiderman]

We think of them. You know, Gamestop was a pivotal moment there. But I mean, good for them. They're in the right place. They put themselves in the right place at this time. It's not by chance. I mean, that quarter was very impressive. I think that, you know, it's just too expensive for me. But they seem to be doing all the right things. And remember, this is a stock that has a beta of almost two. So as you know, they grow assets, but if the market's good, the assets grow as well. And the trade, the option trading looked enormous. So good for them, but too expensive for me.

[Melissa Lee]

We've got a news alert on President Trump's lawsuit versus Elon Musk's X platform. Steve Kovacs got the details on that. Steve?

[Steve Rosso]

Hey there, Melissa.

[Melissa Lee]

Yeah.

[Steve Rosso]

According to the Wall Street Journal reporting just now, the X is going to pay and it's a settlement for the lawsuit that Trump filed against the company. $10 million or about $10 million. This is based on Trump's lawsuit back when before Elon Musk took over X. And it was still Twitter after he's booted off the platform following his posts and tweets during January6. We've seen a number of these settlements come out in the last couple of weeks. We saw the one over similar allegations with Metta, that was settled. And we saw another one with ABC News that was settled. The difference of course here is this is Elon Musk's company and we know Elon Musk's role in the White House right now. So a little strange settlement happening here. You think they'd be able to work it out without any money changing hands, but there you go, Melissa, especially considering.

[Melissa Lee]

How much he donated to the campaign.

[Steve Rosso]

280 some odd million plus another $10 million here. So he's still paying Trump.

[Melissa Lee]

Steve, thanks. Steve Kovak. There's a lot more fast money to come, including a massive after hours move for a coffee company and a casino giant.

[Steve Rosso]

Plus this slashing at Chevron, the oil.

[Melissa Lee]

Giant announcing some major layoffs as cost cutting takes center stage. What it means for growing the American energy patch and how it could impact the stock.

[Steve Rosso]

Plus, too big to fail. China reportedly considering a bailout as one.

[Melissa Lee]

Of the country's last real estate giants faces billions in debt.

[Steve Rosso]

You're watching Fast Money live from the.

[Melissa Lee]

NASDAQ market site in Times Square. We're back right after this. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it Pays to Discover. Learn [e-mail] credit card based on the February 2024 Nelson Report.

[Steve Rosso]

Check out the all new CNBC Sport.

[Melissa Lee]

Podcast where sports business and investing collide from media deals to team valuations, private equity moves and more.

[Steve Rosso]

Catch the biggest business stories on the CNBC Sport Podcast.

[Melissa Lee]

Listen on your favorite platform. Welcome back to Fast Money. A bunch more after hours earnings moves we wanted to bring you Shares of trade desk plummeting after missing revenue expectations and posting light Q1 guidance. Reddit meantime dropping despite a beat on EPS and revenues daily active users coming in lighter than expected. Shares of MGM higher after beating revenue estimates App Love and also up beating on the top and the bottom line. With Q1 guidance coming in better than expected and coffee chain operator Dutch Bros surging after their beat on the earnings and revenue line guy, where would you go?

[Guy Adami]

So choose your adventure.

[Melissa Lee]

Ttd, I would guess for you seriously in your head because that's I'm looking.

[Guy Adami]

At TTD right now.

[Melissa Lee]

I know you are.

[Guy Adami]

It's actually scary. This is when valuation gets in the way. And Carter said it earlier in the show, you can't trade on the back of valuation. He's right, it's not a timing tool. However, if you traded evaluation and you don't knock the COVID off the ball and or guide higher, you're going to be punished. And that's what we're seeing now because on the surface it's not a disastrous quarter. It's a valuation thing. I'll say this though, and I can't believe I'm about to say this. 90 bucks. If you go back and look, this is where we topped out at in the summer of 2023 so that past resistance becomes support. We're going to probably trade tomorrow. 4550 million shares you hold 90. I think you play this from the long side.

[Melissa Lee]

I rattled off a lot of stocks but Carter which chart looks most troubling? Their big moves.

[Carter Worth]

I mean their big moves. But it just shows how one precarious the whole proposition is. And and you'll note that a lot of people who are operating on behalf as fiduciaries were running long short beta neutral dollar books. They don't go in ahead of idea risk. They don't go ahead of earnings. They basically trade after because you can't afford to get that wrong. You're short that and look at that. But you see that thing? One's up 28, 129. It turns out that momentum is a powerful tool. And the two that are up the most are the ones that were up the most. Applovin Palantir. And so the question is, do you fade them? I think at this point, fate them.

[Melissa Lee]

All right, coming up, the latest on China's property crisis. Talk that Beijing may be coming to the rescue for one real estate giant. Is this a sign that even more stimulus is coming? And what could that mean for the stocks? Fast Money's back into. Welcome back to FAST money. Stocks closing mostly lower after this morning's hotter than expected CPI report, but closing well off the lows. The Dow falling 225 points. The S and P down a quarter of a percent and the Nasdaq virtually flat but squeezing out a small gain. Shares of CVS jumping nearly 15% after posting earnings and revenues that beat expectations even as higher medical costs dragged on its insurance unit. CBS also issuing full year 2025 adjusted profit outlook that came in in line with estimates. And Chevron down 1.6% today after announcing plans to slash up to 20% of its workforce. The oil giant looking to cut 2 to 3 billion dollars in costs by the end of next year. At the end of 2023, Chevron had more than 45,000 employees. A 20% reduction would impact about 9,000 people. Well, Chinese authorities could be getting ready to bail out China Banking, one of the country's biggest property developers. According to a Bloomberg report, regulators preparing to allocate 20 billion yen of special local government bonds to buy unsold real estate from Banke as the government stares down a funding gap of about 50 billion yen or 6.8 billion USD for more China Beige Book managing director Shahzad Kazi joins us here on set. Shahzad, great to have you with us. I mean, putting a floor in the property sector would mean a lot. I mean, not just for the property sector because we did see the developers across the board rally in Hong Kong trade, but also in the confidence, I would imagine, of the Chinese consumer.

[Shahzad Kazi]

Yeah, that's exactly the plan here. Right. Beijing wants to put a floor under the property market, especially with China Vanke because if you're trying to encourage folks out there to go out there and buy apartments again, well, having one of the biggest apartment builders fail isn't exactly the right move.

[Melissa Lee]

Right. But you make the point that we've already started seeing a turn in the property. More things are actually getting better there already.

[Shahzad Kazi]

There have been a lot of positive signs over the last several months and we're certainly seeing it in our proprietary tracking. You know, we're either getting better sales results some months, we're getting better pricing results some months as well. The indices now as a property market completely turned the corner and things great again, obviously not, but they're not getting worse and they possibly could be near the cusp of a bottom.

[Melissa Lee]

When you take a look at all the data points, does it look like there will be additional stimulus? Because that's what the equity investors want to know. Investors in the Chinese market, there will be stimulus.

[Shahzad Kazi]

The question is how large? Probably not nearly as big as whatever estimates the street will ultimately come up with. And then of course, the second question is where do they target it and how effective is it going to be? More money for manufacturing and commodities producers? Well, that's not really going to cut it, you know, More money for households. Yes. Are they politically willing to do that? We don't know.

[Steve Rosso]

The numbers are what they, what they say they are. Right. So their growth rate, everyone wants to always debate their growth rate or not. They hypothetically will never or realistically will never run out of the potential to stimulate their, their economy. So do we, to Melissa's point, do you start buying that basket full of Chinese related stocks now as a proxy, or is there going to be a disappointment in the next couple of weeks slash months?

[Shahzad Kazi]

There's always going to be disappointment. I'll tell you why. Right now you've got tariff risk, you've got geopolitical risk. When you don't have that, you've got Chinese, you know, political risk internally with the CCP moving in and cracking down. Because at the end of the day, they don't care about the stock market, they don't care about investors, they care about political power. If you can come up with a formula and then invest based on that, that's probably the way to move forward.

[Karen Feiderman]

So sort of following up on that same point, when we had our housing crisis here, we had tarp, and first it failed and then they passed it and then that wasn't enough. It wasn't remotely enough. And so the market didn't really bottom until six months later. Where do you think they are if this is analogous to that?

[Shahzad Kazi]

Look, I again think that things are starting to improve. What they're trying to do is provide doses of stimulus, pare back the restrictions, you know, not all in one go, but do it sequentially over, you know, several months or a couple of years at this point. So I think we're probably going to see better results out of the property market this year than we had last year. Again, as I said, the pain is already starting to ease.

[Guy Adami]

I was going to say, and this is for Carter and this is all part of this conversation, but you talk about Investing and looking ETFs, K Web, if you could put up like a five or six year chart this to me and Carter, I'm curious as you thoughts. Classic bearish to bullish reversal. And it speaks to, you know, Karen bottoming on the economy. I get it. But you got to be in front of these trades and I think that's what the market is sniffing out here.

[Carter Worth]

That's right, the market is. And if you, whether you do FXI or K web, they've had about 95% correlation. Obviously one's heavier in tech, but the principle is something that was very, very bad that is not only starting to stop going down has actually turned up a bearish to bullish reversal buy.

[Melissa Lee]

Right. Shazadi made an interesting point in terms of consolidating political power. And yes, that is absolutely true, but isn't part of that? I mean for the Chinese consumer, many are invested in the stock market, many are invested in the property market, many, you know, they're in all of these asset classes that have been hit so hard. And so in order to bolster and consolidate power, they also have to make these people happy. Right. I mean so that's, that's all really part of it.

[Shahzad Kazi]

You would think so. And they would have done a far bigger bailout because that's the quickest way to restore people's wealth, get them to go out there and start spending again. Secretary, she doesn't seem super concerned about that though, from what we've been able to see so far.

[Melissa Lee]

Shahzad, great to see you. Thank you. Thanks. We've got a news alert here on Elon Musk's bid for Open Air. Kate Rooney's got the details. Kate.

[Christina Parts Nevels]

And we have a new court filing coming from OpenAI, the company now responding to Musk's $97 billion takeover bid. This is the first official response we've gotten from OpenAI, aside from CEO Sam Altman's tweets. Lawyers for OpenAI argue here that Musk is contradicting his own legal claims with this proposal. They say, well, Musk's filing, I'm paraphrasing here, but the Musk filing, they say, asserts OpenAI's need to remain within a charitable trust and should not be transferred for private gain. But they make the point here that at the same time his proposed acquisition seeks to transfer all of OpenAI's assets to himself and to his private investors for his economic benefit and to that of his competing business X and handpicked private investors. In the filing here, OpenAI lawyers calling Musk's efforts, quote, an improper bid to undermine a competitor. Musk has been suing Open AI to block its transition to a for profit from a nonprofit. Musk is also a co founder of OpenAI. And Sam Altman saying yesterday in a memo to staff that we obtained the board does plan to reject this bid and does have a duty to the mission, as he called it. Altman did say that OpenAI is not for sale. Melissa.

[Melissa Lee]

All right, Kate. Thanks. Kate Rooney, Coming up, new research showing black investors are becoming a bigger part of the market where they are putting their money. What it could mean for the investment to buy. Don't go anywhere. Back into welcome back to FAST money. New research shows that more black Americans are getting more invested in stocks, real estate and crypto currencies. For more on this investment trend, let's bring in CNBC Sharon Epperson to break down all the data and what it could mean for black investor.

[Sharon Epperson]

SHARON well, you know, Melissa, it's younger generation that's really leading this growth, particularly in stock ownership among blacks, although still far behind the nearly two thirds of white households who own stocks. Nearly 40% of Black households own stocks in 2022, up from 31% in 2016. And that's according to the most recent Fed data. Nearly half of blacks who are investing are under 35. Most are new to the market with about half starting to invest in the last two years. And they're not just long term investors. They're eager to make money in the short run, focused on financial freedom. Now, I think a lot of our.

[Melissa Lee]

Older peers have been taught it's either be a day trader or stay in for 10 years. And there's so much in between. And I think the exposure of the.

[Sharon Epperson]

In between is what's garnering more people.

[Melissa Lee]

To the market, especially younger investors.

[Sharon Epperson]

Now that 30 year old investor Tiffany James, she's the founder of Modern Black Girl, It's a digital platform and community that teaches investing mostly to black women. And this wider access to financial information on social media, on Instagram, on TikTok, it's really contributed to the growth of Black investors. HSBC's Raquel Odin tells me that education, employment gains, greater home ownership and business ownership, all of those rates driving higher are also driving more blacks to invest, be able to invest.

[Karen Feiderman]

So Sharon, thanks for being here. First of all. So this younger generation having been more bigger participation, are they teaching their parents or you know, how to invest or.

[Sharon Epperson]

If it's different from parents? So their parents, even if their parents were investors, often real estate is the place to go. Start with real estate, maybe you get some life insurance as well and that's going to protect you for the long run. In terms of investing in equities, the younger generation is saying, no, I want to be able to make money now. I don't want to have to wait 10 years. I don't want to have to wait until retirement to focus on what I want to do.

[Guy Adami]

Sharon, how important is crypto been since for Scottie Pippen was way out front?

[Sharon Epperson]

Yes.

[Guy Adami]

In terms of that, how much do you think that's impacted this?

[Sharon Epperson]

I think that's impacted it quite a bit because when you look at crypto and the people who have bought crypto been the first users, often blacks, surpassing other groups in terms of getting into it. The question is the financial education around it, understanding how it could be the short term win, but how long is it going to last? So that is some of the things that some of the wealth managers that I talk to who say yes, even though my clients want it, we're putting it in there, but a small percentage that they understand the volatility.

[Melissa Lee]

Sharon, always good to see you. Thank you.

[Sharon Epperson]

Great to be here.

[Melissa Lee]

Sharon, efforts and coming up from Mag 7 to Meta versus the rest, what's next for the best performing stock among the mega caps this year as it notches an 18th straight day of gains? We dove into the charts next. More Fast Money into welcome back to Fast Money Matter continuing its record setting win streak today, notching an 18th consecutive day of gains. The stock far outpacing its Mega Cap peer so far in 2025, up nearly 25% already this year. The Max 7 as a whole is slightly lower. But can the rally keep running? Let's get the technical take with the chartmaster Carter Braxton Worth, what are you seeing here?

[Carter Worth]

Well, just to start out with Matter before we get to the charts, it's not that steep. We can see a lot of steeper stocks. But let's go to the charts. This is an actual equal weight basket of the Magnificent Seven removing Meta. So it's not the Magnificent Seven, it's six stocks given an equal weight and you see that dip over the past month, month and a half by contradistinction. Take a look at matter what it's done over the Past month, next chart. It is hooked up. And so if we looked at a comparative chart, next chart which would give us the two instruments together, you see that matter is up some 25%. And the magnificent six, if you will, equal weight is on. And that's quite a spread. Now if we do the same thing on different time frames, you'll see not three, three, but six months. Here is a comparative chart. It's essentially one's up 40, metaverse up 20. Look at a one year and so forth and so on. And so the question is, is this getting too far, too fast? Well, I think this last chart, and you see it here, take a look at the five year. The five year is dead even. So Metta versus the magnificent seven without matter have done the exact same thing over the past five years. Which is to say on that timeframe frame, matter is hardly ahead of the group.

[Melissa Lee]

Hmm. Your biggest position is matter.

[Karen Feiderman]

My biggest position is better trade. I put a collar on today. I just think the chance mathematically of the 19th day in the row is actually very, very slim. And so I do want to put a collar on. I just thought, all right, well here's a good opportunity. 18 days in a row weren't the right day. Perhaps this one is in tomorrow, trades down.

[Melissa Lee]

What do you think?

[Guy Adami]

Math makes sense. I'll say this. You know their margins the last couple of quarters suggest again we've said this, they're leveraging AI as well as any company out there, which to me makes their valuation despite the run still very reasonable.

[Steve Rosso]

I think I agree with the premise that it's overextended the outperformance. He's been in the Oval Office or I should say he's been at Mar a Lago that he got the Trump bump. He's at the sweet spot for advertising. It's shown to be more resilient and the bullseye has been on in video and all of these high growth semiconductor plays. I think it's gone a little too far where Karen said the 17th day, maybe too, maybe too much. I think at this point take some chips off the table, look for a pullback.

[Melissa Lee]

Up next, final trades for the final trade, let's go around the horn.

[Steve Rosso]

Steve Steel. I'm still in this name Nippon. What was the deal price? 55. I think it goes higher than that.

[Melissa Lee]

Waiting for that chairwoman.

[Karen Feiderman]

Yes. So Cisco's earnings today. I really need to take a look at this one. If the revenue mix is changing more subscription. This P is too low.

[Carter Worth]

Cbw Large cap industrial aerosol ran reports tomorrow. I think the pattern is poor. If you're long I would trim or play short.

[Melissa Lee]

Haven't mentioned IR in a long time. That's old school Fast money.

[Guy Adami]

Remember that 1k web bear bearish to bullish reversal.

[Melissa Lee]

Thank you for watching Fast Money. See you back here tomorrow at 5 for more fast 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 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.