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

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."

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."

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