← CNBC's "Fast Money"
CNBC's "Fast Money"
Risk On Gets Wrecked… And What’s Behind The Move In Rates? 2/25/25
00:43:06
The risk on trade gets wrecked, as most of the Mag-7 stocks and the broader tech trade fall deeper into the red. Where investors are moving their money, and if there’s more pain ahead for the group. And that flight to safety helping push rates even lower… as economic uncertainty fuels the bond market moves. Where Treasurys are heading next, and the impact on the broader market. Fast Money Disclaimer
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- [00:01]
Edward Jones
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- [01:31]
Melissa Lee
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. Risk off from Tesla tanking to Bitcoin below 90k to rates rolling back, investors seem to be fleeing the momentum trades. Will the pain continue and how should you play the moves? And Nvidia on deck. The chip giant and darling gearing up to report tomorrow night. What can we expect to hear from the company and how will markets react? Plus, Home Depot breaks its comp sales losing streak. Lilly gets a boost thanks to a price cut for zepbound. And Instacart does not deliver on earnings. How to trade that stock now? I'm Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Dan Nathan, Guy Adami and Mike Koh. But we start off with the wreckage of the risk on trade. The tech heavy NASDAQ leading the market losses today, dropping for a fourth straight session, closing at three month lows. All but one member of the MAG7 was down today. The group losing a combined $300 billion in market cap during this session. And take A look at some other high tech high flyers, Applovin, Palantir, intel, all getting their wings clipped as investors begin a mad dash into safe havens. Even gold unable to escape today's carnage. The precious metal falling from all time highs as investors look for even safer places to put their cash. So does a risk off run from tech have even further to go?
- [02:49]
Tim Seymour
Guy first of all welcome back Melissa.
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Melissa Lee
It is great to be back, right to be back.
- [02:55]
Dan Nathan
John Sebastian Johnson welcome back Kotter in this case Melissa.
- [02:59]
Tim Seymour
Melissa Much, much better than I think Gabe Kaplan would.
- [03:04]
Dan Nathan
I think it's let's talk about, let's.
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Tim Seymour
Talk about the market now. Clearly a risk off day and the thing that really struck me the most was the fact that yields are now below, you know,435 which I thought should have been support. So flight to quality or perceived quality in form of the bond market. Gold sells off in an environment where it should have actually done well and then obviously these individual names but of all the things and the bond markets on the top of list, the fact that the VIX probably at its highest close in a while is something I think people should pay attention to. I've thought for a while that volatility is going to be a story and it's starting to rear its ugly head.
- [03:35]
Dan Nathan
Mel if you think about where the market was most concerned maybe a month ago was all about inflation. I think we say this a lot. What's more critical, what's more anxiety provoking for the market? It's not inflation, it's a growth scare. And so we talked about those, those names that we post at the top of show those are high growth companies. So they're going to be hurt the most. Also very interesting that in the craziness that we've also I think kind of chronicled in the market in terms of some of the go go stocks, the meme stocks. How about these levered ETFs that have been exposed to whether it's, you know, the Mag 7 or just in video or microstrategy. So these are, these are places where I think there's been a lot of pain. But look at the data that's coming through. It was a consumer confidence report out today that was the lowest since April 21st. I think consumer surveys are less important than real data in terms of retail sales. But housing, retail sales service, PMI have all been weaker. So again you get back to the market that we have and you look at the weakness in the mag 7 and I'll go again straight to the semiconductors which look like we're getting a bear cross, which look like we are back to essentially March of 2024. The places where you had the growth. The places. And this is going into an Nvidia print tomorrow. So it's a growth scare, people. It's not inflation.
- [04:46]
Guy Adami
Well, it's not only a growth scare, it's also a popping of a bubble. And I don't mean the whole market was a bubble, I don't mean the NASDAQ was a bubble, but there were some very bubble issues. Stocks, if you just pull up Applovin and Palantir, these are two names that we've talked a lot about. Most investors who have been buying these over the last few months or so don't even know what these companies do. They don't. You know, Palantir had a 300 billion.
- [05:06]
Dan Nathan
A man, but this was nearly a.
- [05:09]
Guy Adami
$200 billion market cap company that has been up 500% in the last year or so. Same thing for Palantir. So we're talking about a $300 billion market cap for Palantir at one point a $200 billion nearly for app loving. These two stocks, if you put them up next to each other, they look identical. They both just had these blowout quarters in guidance and the stocks gapped up 25%. They've since filled in both of those gaps. So you tell me whether it's going to find support here. There's no valuation support there. Support as it relates to these stories in a market like this that's trading at a valuation that it is broadly. So I think when you see this sort of thing, I think it's healthy to see this sort of action come out. I think it's healthy that Bitcoin finally broke that $90,000 or whatever you want psychological level because you still have an S and P that's up on the year, which is pretty shocking. Take a lot of that froth out of the market.
- [05:58]
Dan Nathan
Is. Is Metta an app lovin? I mean we're talking about the company that everyone could find every reason to own. It was the one thing that was impervious. It's down 13 and a half percent from that intraday high that it hit, I don't know, four or five days ago after it was completing a 16 day in a row run. So it's the pain within the mega caps that I think is the most interesting. It's the fall from grace. And again, a handful of these stocks are through their deep seek intraday lows. So remember, we all Knew you where you were when you heard that news and what the market was doing. A lot of those stocks, ironically, not Nvidia going into tomorrow's print, which may be a concern for people, but again, all the big boys that we wanted to see kind of rally from that, they did and they've given, giving it back and then some.
- [06:38]
Melissa Lee
I mean, there are questions about the trade that go back to deep sea. There are questions about the tariff environment, there are questions about export controls impacting tech. There's a question about enterprise spending overall, Michael, I mean if you were to sort of pinpoint the one thing that concerns you the most because it's not just, you know, mega cap tech, that's there's something bigger here going on in terms of sentiment in the market. Something is changing.
- [07:02]
Mike Koh
Well, I think there's two things really Dan was sort of talking about it and that is that there's a lot of stocks in here where the valuations are pretty questionable. I mean, Tesla obviously is another one. Pretty hard to get your arms around the valuation in that one. But even sort of mature big companies that are operating well but are trading at multiples that are hard to justify. I've mentioned Wal Mart before, I think is a good example and another thing to think about. If there's a risk off type of a market then, and everybody's been talking a lot about the fact that we have a lot of passive investing that tends to basically be a propellant for a lot of the largest cap companies. Well, the opposite is also going to be true. Right. If people start taking risk off the table, it's the biggest market cap constituents of the index that are going to feel it the hardest. So you know, I think probably if we take a look at a historical, you know, appropriate earnings multiple for the S and P, it could arguably be 20% lower than the highs that we saw recently. So, you know, if you were going to have a correction or worse, it probably makes sense from a fundamental perspective.
- [08:03]
Tim Seymour
You know, we talked about this last night, Mel, but if you look, you know, I would think I would have thought this as well except that I look at it all day every day. But the SMH is one of the things everybody looks at that made its all time high in July of last year and it's been trending lower ever since. If you want to pull up a chart, 235 is critical support. We're basically there now. And Microsoft, which again one of the most important companies in the world, let alone stocks in the world, is now below $400, another name that probably made its high around that same time. So below the surface with again the S and P effectively at all time highs, the damage is being done in what theoretically should be carrying the water here.
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Guy Adami
Well, I think the below the surface thing is really important. Go back to 2021, right? So we had a market at all time highs. The S and P made a new all time high the first week of 2022. But under the surface there was a lot of stuff that worked really well in 2020 and 2021 that started to roll over. It actually brings me back not too differently than the year 2000. And I know a lot of folks who are watching the show, they've been with gu that the show has been on here. But you know, it was a very similar sort of thing. I mean the market, the S and P had made a high. There was some stuff in the NASDAQ that started rolling over. They led to the downside. But the S and P is always like the Alamo. It's kind of going to be the last thing, the last man standing. If you think about what's gone on over the last 25 years, it's been tech that's always led the way, that's always done the heavy lifting. Some of the names have changed, but when you think about the sox Tim's been mentioning, it's been underperforming for like nine months right now. Nvidia has been the whole story. But Nvidia has been underperforming the broad market too. So I guess the underpinnings of this secular trade seems to be that they're ready to take a little bit of a breather.
- [09:40]
Melissa Lee
But this is exactly why Europe is doing better. I mean our tech weakness, right, is Europe spend. If you take a look at MSCI, all country ex US, it's up 7% for the year. The US, the S&P 500 is up what, 2% or something like that. China is doing better, Europe's doing better.
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Guy Adami
Tim, wait, are we trading the globe right here?
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Melissa Lee
We should be.
- [09:57]
Dan Nathan
We should be. Well, I'm glad you mentioned international because it's out from the S and P depending on what you're looking at. Europe, certainly. I run an international ETF id. So the dynamic for an SAP or a Siemens or a Barclays or a Mitsubishi. So these are dynamics that are really interesting. The days of US exceptional exceptionalism. On the GDP front, there's a. There's at least a few economists out there saying that the GDP gap between the US and Europe is going to be, you know, half a percent, which is as tight as it's been in a long time. So I think you can stay there. I think those valuations are really compelling and I think you have a dividend yield to go along with it. But I think you have to be careful about assuming everything is going downhill. I want to just put in a positive word for the market here. I think things are a little oversold. I think you've got a dynamic here where some of these defensive stocks were trading so well until about three weeks ago. And it wasn't just because there was growth opportunities elsewhere. Be careful jumping into names that have rallied that are staples and move 15%.
- [10:51]
Tim Seymour
So it's great when we have our emerging market specialist with us. But I will mention.
- [10:55]
Melissa Lee
In the House.
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Tim Seymour
In the house, yes. If you recall, when we were at the conference at the end of January, we talked about ewc, the Brazil etf, that is an emerging market that has been doing extraordinarily well for the last two and a half months. And that is about, I think, to break a 17 year downtrend. So keep an eye on that.
- [11:13]
Melissa Lee
Meantime, the Trump administration is planning to beef up Biden era chip export controls, further restricting what Nvidia can send to China without a license. CNBC's Eamon Javors has got more on this. Eamon?
- [11:26]
Guy Adami
Yeah, Melissa, this is a report from Bloomberg earlier today that the Trump administration is eyeing even tougher restrictions on semiconductor exports to China than the recent Biden administration had put in place. And those were deemed to be pretty significant at the time. Citing people familiar with the matter. Bloomberg reports that Trump administration officials are holding meetings to discuss new limits with key US Allies and working on a longer list of restrictions that could be put in place in the coming months. The goal here overall is to slow China's technological progress and especially so in sensitive areas like artificial intelligence. The Trump team is looking at three specific possibilities. Curbs on sales of chips that Nvidia designed specifically for China, reducing the computing power that can be exported without a license, and putting more restrictions on the types of Nvidia chips that can be exported without a license. Now, all of this is likely to unfold over the next several months, so we're going to have to wait and see how it plays out. No indication that any of this is immediate, Melissa, but it's something to watch.
- [12:28]
Melissa Lee
All right, Eamon, thank you. Amen jabber. So yet another pressure on the chip sector, something that Nvidia specifically will be forced to deal with if this comes to Fruition. We should note there is a Reuters report today or two. Right?
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Guy Adami
Yeah.
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Melissa Lee
That there is a pull forward basically on the 20, the chip that's made specifically for export to China from the major Chinese firms like Alibaba, Tencent, ByteDance ahead probably of these export threats.
- [12:53]
Gene Munster
Yeah.
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Dan Nathan
And there's an argument that Deep Seq did all they needed to with the A100 chips before the ban went into place. And but the other, and the other thing as part of that note that you're talking about from Reuters is that there's an. Apparently there's going to be an R2 release in deep Sea coming through which is going to be going to have better coding, is going to be multi language and I think it's a case where this is part of what has the market concerned. Every hyperscaler has kind of indicated we're going to continue to spend because what else are they going to say? I'm not saying that that's also failed in a theory and that it's been proven that Deep Seek is the answer. I'm just saying that the reality is there really is a tug of war out here and Deep seeks putting the pressure on.
- [13:31]
Guy Adami
Yeah, the more restrictions that you might find on exports, you might find the deep seats that are innovating in a way. I mean you could look at the EV market and look at the competition there. I mean BYD is finding a way to get around some of the innovations that we've had here by Elon Musk and Tesla and the like here. So again, we can either kind of figure out how to work with China or we can have this very adversarial approach. I'm not saying that what these, you know, both administrations have done with this chip, you know, kind of bans is the wrong thing to do. I think for national security reasons. I think we want to get our arms around this. But when it comes to things like EVs and you know, like microprocessors going into some useless consumer products, I think that's probably less interesting.
- [14:10]
Tim Seymour
74% gross margins to me. I mean, I think that's what you have to look for and I'm hard pressed to believe they're going to get there. And if you start seeing margins, I'm talking about Nvidia decelerate, I mean that's when you start to get concerned because then all of a sudden you start looking at their revenue vis a vis their eps and say, you know what, they've been out earning their revenue stream and margins are going to start to contract. That's when you get a problem with the valuation.
- [14:32]
Melissa Lee
All this, of course, Nvidia is reporting earnings tomorrow. For what to expect, let's bring in fast money friend Gene Munster. He's a managing partner of Deepwater Asset Management. Gene, always great to see you. Oh, hello. Wedbush is saying that they they're looking for a $2 billion beat and a $2 billion raise. That's what the market's expecting. Do you think they deliver expectations to Melissa?
- [14:54]
Gene Munster
Yeah, no, I think that they will deliver on that in part because supplies improved meaningfully over the last month. Months. And so that really is the bogey that kind of to 1.8 to 2 billion beat for the quarter. I would mention that I think there's something bigger at play here and just a kind of shortcut. What to look for when these numbers come out. Guy just mentioned the gross margin number. That's important. But I think what's even more important is we're going to see two press releases that come out. One, the earnings and second, a letter from their cfo. In that letter there, it will likely be some commentary about what is the demand, how far they're out with the supply demand equilibrium related to Blackwell. And I suspect that they're going to say we're four quarters out basically through all of 2020 calendar 25. They're going to be essentially sold out of Blackwell. If that language is in there. I think that that is going to be a reassuring comment for AI investors. If they maintain that it's just several quarters out, like she said in last quarter's letter, I think that's going to send kind of a shock wave. So that's probably the piece that I think investors are going to dig most into related to the Nvidia earnings.
- [16:11]
Melissa Lee
Do you think they address Deep seek?
- [16:15]
Gene Munster
Yes. I mean it's going to come up and I think that Tim had some comments about like, you know, these hyperscalers and what they're spending. They will reiterate that. And I think that I just want to emphasize a piece related to Deep SEQ relative to what the hyperscalers said going into Deep Seq just before it came out. The hyperscalers were expected to increase their capex spend by 20% in calendar 25. Now it's expected to be just above 40%. That's a meaningful move higher. And so I think that really is important. And I think the substance of that, and we may not see that in how Nvidia trades on Thursday morning, but I think the substance of this is that the AI hardware trade will last longer than most investors expect and understand kind of the apprehension about the funk that the trade in is right now. But if, if what these hyperscalers are saying is true, companies like Nvidia should have more upside throughout this year than investors are currently anticipating.
- [17:10]
Dan Nathan
So Gene, what's the other side of that though? So I hear you and I kind of agree with everything you just said, but Deep Seek introduced a level of, of at least uncertainty around what spend means and who benefits from Deep Seek. And have you gotten bullish because of Deep Seek in other directions?
- [17:28]
Gene Munster
I think that I would say what consensus is, is that consensus is Deep Seek has been a positive for AI hardware. It's Nvidia stock hasn't reflected it, market's not buying it. But that's what the. I think that's the substance of this. I think when it comes to the cost of AI inference, it's going to go through the floor. Sam Altman said after Deep Seek that they expect the cost of tokens to go down 10 to 12x per year for their second tier model. I mean that's basically through the floor. And I think the third piece to if those two happen, we get this hardware build out, we get the cost of compute or the cost of inference declining. I think you're going to see some just profound impacts. And so I'm still bullish on this market. I think that what we're seeing right now is a funk and I think that we still got two great years left of this trade.
- [18:17]
Guy Adami
Jane, you've had a great call on this, the trajectory of the demand for this over the last couple of years. It doesn't seem like you're pulling back at all. What excites you? Like we don't spend a lot of time talking about Apple, Apple intelligence. I think we all agree to date it's not predictably particularly exciting. Do you see an opportunity for an Apple if the cost of compute is coming down, the cost of inference, doesn't that make it that much more attractive for developers? And talk to us a little bit about what that could mean for Apple.
- [18:41]
Gene Munster
Yeah, we saw a little bit of that too in terms of how the market reacted when deepsea came out. Apple tended to do pretty good because that piece of the cost of inference goes down, that should help, should help the likelihood that developers come and build these AI applications. And so, so I think that Apple is a beneficiary today. I think their shareholder meeting was, was largely scripted. There wasn't much of anything that came out of substance beyond the fact that the company continues to believe in this opportunity, it's going to take longer. I think the cost of AI declining is going to be a positive for Apple. Probably six months out before I think we get a really compelling Apple intelligence. But I think it is around the corner.
- [19:23]
Melissa Lee
All right, great. Thanks Gene. Great to see you. Gene Muntz, thank you. And do not miss CNBC special report tomorrow. Following in video's earnings, John Ford will speak of CEO Jensen Huang covering the numbers strategy, chip demand and more that 7:00pm Eastern Time right here on CNBC. Mike, if you expect some trouble in Nvidia's report, how do you protect yourself here?
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Mike Koh
Yeah, I think, you know, one of the things you can do right now the options market is implying a move of about 8 and a half percent after they report, which is not that surprising when you consider I think 8 spot 15 or so is what the company has averaged over the last four reported quarters. I will say that two of the bigger drawdowns we saw were at this time of year in 21 and in 22 when they reported. So I think one of the things you could do is try to minimize your premium outlay by a downside put spread. I was looking at the 125, 115 and then sell an upside call at the 140 strike. That's going to basically have no net debit or credit it and it gives you, you know, meaningful protection. It's about a 7.9% worth of protection to the downside if the stock should fall by the implied amount. But you still have upside to almost 10% up to that 140 strike. But we took a look and over the last 44 reported quarters this would have helped you about 16 times, would have been a knock against you about eight times and the rest of the time it wouldn't have had any net impact to hedge yourself this way. So in general I think this is probably the best way to do it it.
- [20:47]
Melissa Lee
All right. Well we got some breaking news you want to get to on Supermicro, the company following their long delayed 10k in time for the NASDAQ filing deadline. Christina Parks Nebulous. Got the details, Christina? Well, delinquent no more.
- [21:00]
Dan Nathan
The server summer like you mentioned, finally filing their delayed quarterly and full year results.
- [21:05]
Melissa Lee
A quick recap though for Q1 and Q2, revenues were amiss and we're not going to compare earnings per share numbers because analysts use an adjusted figure. Supermicro doesn't provide comparable numbers.
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Dan Nathan
This is a company though, just a Quick recap.
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Melissa Lee
They had a short seller go after them last year. An auditor quit. There's an ongoing DOJ and SEC investigation. And yet the stock has jumped what, 50% into the close today year to date. In the risk section of the financial filings tonight, Supermicro saying that there is no material impact on the company's consolidated financial condition, results of operations or liquidity as of December 31, 2024. So as seen as a sign of strength. And then the company also assuring investors that their current cash and cash equivalents will be sufficient to support their business operations and interest payments for this entire year. So those are two positive notes in the risk section. And shares are jumping 17% on this, guys. All right, Christina, thanks. Christina Parsonevolis, this is a crazy story. I mean that we've been following and they're back on the NASDAQ now, I guess. Or they, they're not delinquent prior to.
- [22:09]
Tim Seymour
Your trip, you know, we had told I think the stock was trading 46 and we said listen, you, you don't can short the stock. It probably has room to 72. Actually think you got to 66 and then backed all the way back down. Here we are. So personally I think you're looking for a level where you pull the ripcord on this thing and I do think it's in the low 70s. I don't think it's fixed by any stretch. But this could create a real huge short covering opportunity.
- [22:33]
Melissa Lee
Coming up, a lot of earnings action to bring you still instacart Caesars workday much more all on the move after hours. The details and the numbers in the quarter ahead. And speaking of results, Home Depot heading higher on the back of its report this morning. And for a store known for fixing things, retailers breaking a key losing streak, how the sales are stacking up and fast money returns say you've always wanted to take a spontaneous trip to the Caribbean. Here's the thing. If you get smart with your money, you can do things like that. With Empower you can start making the most out of your money so you can get out and live a little. Isn't that why we work so hard to have some fun with our money, like treating yourself to something special or spontaneously doing something extra for a loved one. So use Empower and get good at money so you can be a little bad. Join their 19 million customers today@empower.com not an Empower client, paid or sponsored business. It's all the things that keep this world turning.
- [23:27]
Dan Nathan
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- [23:31]
Melissa Lee
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- [24:14]
Melissa Lee
Bitcoin plunging below $90,000, hitting a three month low. The cryptocurrency now nearly 20% below the record high hit on inauguration day. That's bad news for strategy formerly known as MicroStrategy, the Bitcoin proxy play falling nearly 13% today. Our own Tenaya McKeel has more of these moves. Tenea yeah, Melissa, bitcoin sort of at a critical juncture here. If you're not a long term holder, hovering under 90K which is the bottom of the range. Bitcoin's been trading in for the past three months. And then MicroStrategy, you said it, lowest close since the election after it just bought more bitcoin yesterday. And what you're seeing here is definitely part of the overall risk off move in markets. I know that there was a huge crypto hack last week, biggest in history. And it is interesting because bullish sentiment in crypto and the enthusiasm around our new pro crypto administration is still very high. And the thing is that since we got Trump's executive order on crypto at the end of January, which I think was widely anticipated and for the most part very well received, crypto investors haven't had a clear catalyst to get them through this macro uncertainty now. So investors I spoke with today say there's certainly room for bitcoin to pull back maybe all the way to 70k if it doesn't retake 90k until we get that catalyst. Melissa, today I'm just curious what your thoughts are on strategy. The average holding of their the average price of their bitcoin holdings is 66,000 and you mentioned 70,000 as a key level that investors are watching. I'm wondering, you know, if there's no coincidence to those levels. Yeah, certainly something on a lot of people's minds. I was talking with Mark Palmer from Benchmark today and he was looking at that contract and was Basically explaining that strategy has it set up in a way so that there's no trigger clause. So, you know, there should, there should not be any fears about a new low in bitcoin, you know, in terms of forced liquidations or anything like that. Okay, Tenaya, thank you. Tynea McKeel on Bitcoin's massive move. You know, we had Rebecca Patterson on I think like a month ago talking about bitcoin, saying that all these things that are proposed by the Trump administration, there'll be catalysts for bitcoin. They take months to do, they take months to enact at the SEC level or at the federal level. So what are investors expecting here?
- [26:30]
Tim Seymour
Yeah, I'm hard pressed to believe we'll get a bitcoin strategic reserve through treasury or through Congress. So. And to your point, even if it was, it would take months, if not longer than that. So the, the immediacy of this whole thing and the reason why I think bitcoin went from maybe 75,000 to 109 or so post election was on the back of that. Now we're on the other side. But your question about the price and their average price strategy is exactly right. And with each passing week, they'll buy more, their average will go up and if the price continues to go down, they will meet at some level level, probably 72,000. And that's when things, I think, get really interesting.
- [27:06]
Melissa Lee
Mike, your thoughts on strategy or the bitcoin move?
- [27:10]
Mike Koh
Yeah, I mean, one of the things we're certainly seeing, you know, when you have a risk off situation, there's a lot of participants in, in crypto that are, you know, day trading this or, you know, using this as a short term trading instrument. And those kinds of participants, you know, are probably weak hands, as they say, in the crypto space. I mean, I still like it in the, in the long term, but you know, volatility is definitely a part of the reality of this asset class. And you know, as far as microstrategy is concerned, you know, with their, with their bonds essentially as zero coupon bonds, I mean, they basically are able to hang in there for, for quite a while. But I mean, it wouldn't surprise me to see further weakness if the rest of the market's selling off as well.
- [27:50]
Melissa Lee
Meantime, we've seen related weakness in the exchanges like Coinbase as well as Robinhood.
- [27:55]
Dan Nathan
Yeah. In fact, you can make an argument that some of these ancillary plays have, if they've even had more, they obviously have more leverage, as they always do. And it gets back to where I just think liquidity in markets and where the momentum has broken. And there's no question that some of these things were part of a hysteria that was tied to leverage. It wasn't just, you know, folks that were investing through cash.
- [28:16]
Guy Adami
You know, it's funny when you speak of leverage trading platforms and like you just mentioned, some that are not trading particularly well, look at CME Group. It's trading at 52 week highs, near all time highs. You think in a macro sort of environment where we have lots of risk assets moving around down, that makes sense to me. I can see if meme stocks are getting killed, why you might want not to go the meme stock machines. But maybe on the future side that's a little more interesting.
- [28:39]
Melissa Lee
Coming up, improving sales for a home improvement giant. Home Depot getting a boost after its latest results. We'll drill down on the corner what it says about the housing sector next and economic uncertainty or a flight to safety. What is moving the bond market right now? Our own Rick Santelli says it could be a little bit of both his take on the rate route and where yields could be headed next. You're watching Fast MONEY live from the NASDAQ market site in Times Square. Back right after this.
- [29:04]
Edward Jones
Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single purpose, making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@ multicare.org find your hustle CNBC.
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Guy Adami
Make it's new online course how to.
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Dan Nathan
Start a side hustle.
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Guy Adami
Three industry experts break down proven paths to success.
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Melissa Lee
Get out there and do it.
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Guy Adami
Go to CNBCmakeit.com Sidehustle special offer ends April 1st.
- [29:51]
Melissa Lee
Welcome back to Fast Money. Shares of Home Depot getting a pop after the company just barely beat analysts expectations for the quarter. The home improvement retailer posting positive comp sales after eight straight quarters of declines but still offering weak guidance for growth in the coming year. The CFO telling CNBC this morning that housing is still frozen by high mortgage rates, but that he expects consumers will stop putting off big projects until rates fall. He said basically that they're going to come to the realization that those low rates are not going to come back. So they're going to just go ahead with their project.
- [30:21]
Dan Nathan
This was an important quarter, as you said. I mean this, this positive comp inflection. And is it that I Think the street is still waiting to prove me and their outlook for again, their full year on 24 at minus 1 means they're implying more housing headwinds here. I like this story. I like this story. Again. When you think of who their consumer is and at least the strength of that consumer, they're running their business. They've never been. I actually tried to return some stuff that was sitting in my garage for like a little over a year over the weekend. I had a receipt. I had a receipt and they dinged me. They just kicked me to the door. I should be able to take anything back to Home Depot.
- [30:52]
Melissa Lee
Over a year. What were you trying to return?
- [30:54]
Dan Nathan
Nails, LED high hats and a couple grill covers.
- [30:57]
Melissa Lee
You know, I mean, I don't want.
- [30:59]
Dan Nathan
To get too technical. I mean, you're a scofflaw. I'm just totally. I'm not a scoffer. I paid for the stuff. I had a receipt. A year later I had a receipt.
- [31:08]
Tim Seymour
You might have been using it for a year.
- [31:10]
Dan Nathan
No matter what, whenever you're gonna rent.
- [31:11]
Tim Seymour
A Runway and then you bring the.
- [31:13]
Dan Nathan
Dress back, whatever they give me in credit, I'm gonna spend even more than that, Alex. But dresses we talking about.
- [31:18]
Melissa Lee
Same type of thing about lights and stuff.
- [31:21]
Dan Nathan
Anyway, I love Home Depot.
- [31:22]
Melissa Lee
But Mike, I mean, rates coming down today, that doesn't necessarily hurt.
- [31:28]
Mike Koh
Yeah, it doesn't hurt. I mean, I think you guys were just talking about the really important point, which is that, you know, obviously the thing's been under a lot of top line pressure and you know, seeing that at 14% increase, you know, year on year for the quarter was, was an important, important sign, I think that things could be stabilizing and I think that's really the way we should be looking at this. Not that it's going to suddenly resume extraordinary growth trading 25 times forward. So, you know, the way I look at it, it's probably fairly valued here. It's not, I'm not getting terribly excited about it. And Tim, if you want to make some returns, I think Costco is the best, best place for that.
- [32:07]
Dan Nathan
Yeah, I don't know. They don't have the power tools there anyway need. But I mean, you know, I, I'm, I'm, I'm going to check that out.
- [32:13]
Guy Adami
Mike.
- [32:13]
Dan Nathan
Thank you.
- [32:13]
Guy Adami
Speaking of power tools guy, where do you sh.
- [32:16]
Tim Seymour
I mean, what does Tim do? What is Tim doing with power tools?
- [32:19]
Melissa Lee
Was the stuff was I go to Home Depot.
- [32:21]
Dan Nathan
I was still in the package.
- [32:22]
Melissa Lee
Original packaging.
- [32:23]
Dan Nathan
You're acting like I'm. There's some kind of a fraud.
- [32:25]
Melissa Lee
Over a year.
- [32:26]
Dan Nathan
I'm bringing back goods that haven't been open. Sometimes I just buy more than I need. I mean, in this world. Why didn't you return?
- [32:33]
Melissa Lee
I'm a busy guy all the time.
- [32:35]
Dan Nathan
Got a family. I mean, there's a lot going on.
- [32:37]
Melissa Lee
We've got many more things.
- [32:38]
Tim Seymour
I mean, if Ken Langone is what, Ken's a fan of the show.
- [32:40]
Melissa Lee
Yeah. Okay.
- [32:41]
Tim Seymour
No, but Ken would be taking it back.
- [32:43]
Dan Nathan
No, he wouldn't take it back any.
- [32:45]
Melissa Lee
Anytime he wants, like two years later.
- [32:49]
Dan Nathan
They're very loyal to their customers, to the professional community. And I am one of them. I'm not the professional community, but I, I am.
- [32:56]
Melissa Lee
Okay. Anyway, let's get to Boeing. Hammer Filiboe standing by with the details. Details, Phil.
- [33:03]
Mike Koh
Hey, Melissa. Take a look at shares of Boeing. Not doing a whole lot after hours announcement just coming from the company that Stephanie Pope, who has held dual titles at the company, both as CEO as well as the head of Boeing Commercial Airplanes will be giving up the role of CEO. She remains in charge of Boeing Commercial Airplanes. And this is essentially CEO Kelly Ortberg doing what he probably should be doing, which is bringing in more leadership. COO and head of Boeing Commercial Airplanes. That's a lot for any one person to handle. Well, that's what Stephanie Pope has been doing since really early late early last year. Now she will focus just on Boeing Commercial Airplanes. Kelly Ortberg will now focus on bringing in a coo. And that's the change at Boeing, by the way. They are also reducing the size of their board by one member. One of the directors will be stepping down. Those are the headlines from Boeing after hours.
- [34:02]
Melissa Lee
Melissa, back to you. All right, thank you, Philibo. Coming up, the rate route continues. The 10 year yield hitting its lowest level since December. What's behind the decline? Our own Rick Santelli and his legendary whiteboard will join us to dig into the moves in the bond markets. Don't go anywhere. Fast Money is back into. Welcome back to Fast Money. The S&P 500 and Nasdaq dropping for a fourth straight day. The Dow heading higher though, up nearly 160 points. Shares of Starbucks higher today. The second best performer in the Nasdaq 100 now up nearly 26% this year and trading at its highest level since May of 2023. Shares of Trump Media dropping more than 7%. Its worst day in nearly a month. And now in a seven day losing streak. DJT down more than 40% since Trump took off office. Crude oil dropping more than 2% today now below 70 bucks a barrel. And some after hours action. Instacart dropping after profit forecasts came up short. Caesars beating EPS estimates but missing revenue expectations. Intuit beating earnings and revenue expectations. Kava meantime missing earnings estimates and lucid jumping after reporting better than expected earnings and revenues. The company also announcing its CEO will step down. Well, the benchmark 10 year treasury yield hitting its lowest level since mid December as a slew of worries seemed to weigh on investors. Investors the Conference Board's consumer confidence survey seeing its largest monthly decline since 2021. The Philly Fed reporting its services index tumbled to the lowest in almost two years. And there's a promise of tariffs starting next week. CNBC on air editor Rick Santelli joins us now with the rate impact. Rick, how, how much farther do you think the yields go on the 10 year?
- [35:39]
Rick Santelli
You know, it's always hard to catch that falling knife. But considering the momentum to the downside, I wouldn't be surprised to see a violation of four and a quarter down to maybe around 417 to 419. But I look at it a little different. I think 417, 418, 419 is a good area. Should we get down there to start establishing more of a short bias? But another way to look at it is over the next three to four weeks I look for the high frequency yield to be traded to be around 435. So even though I think there could be more room to the upside in price, the downside in yield, I think we're getting close to an area where the consolidation is going to be at a slightly higher yield. Now what is really the dynamic here? And I think this is really important. Treasury yields, you know, they're based on what's going on in the economy and safe haven. So it's kind of a versus and we consider what's going on with the economy. We have to look at two areas. We need three actually, the balance sheet of the country, debt and deficits. We need to look at prices, inflation, deflation. We need to look at growth. Now growth is the one that I think is under review right now because nothing's really changed on the balance sheet. We talk about tariffs, but it certainly isn't showing up prices. You know, PPI was hot, CPI was hot. But what's moving the market? Squishy numbers. Squishy numbers. Uncertainty is the issue these days and the confidence numbers are showing us some movement like I've never seen before. So what's that telling me? That's telling me that the uncertainty from growth, which is probably more temporary than permanent, is coming into the safe haven area. So it's all about shocks to the system, right? Well, not anymore. It's more about stocks. That's where the shock is coming in. So to me, it's pretty easy. We're going to question growth. Most of the data actually hasn't shown me a huge reversal in growth. Uncertainty remains and everything is half empty with this administration because of that. And I get it, you know, whether it's regulation or energy, there's a lot of positives, the growth aspect based on the current administration. But this is going to continue to affect that. And today we did see a bit of reversal. We saw green in the Dow. But what we need is we need solid green, we need the NASDAQ to join and then that will change the treasury outlook dramatically.
- [38:00]
Tim Seymour
We got PC on Friday, as you know how. How much of a monkey wrench can that throw into this whole thing, Rick?
- [38:08]
Rick Santelli
Well, you know, it can throw a monkey wrench in, but Honestly, look at February 11th and 12th. CPI was hot. PPI wasn't that cool. It was on the warm side as well, but yet we hardly had a reaction. And to me, that's very telling. What I would consider is the most important area for viewers is to watch real time how the market moves in on what it moves on. That's key. It didn't move on the work week shrinking in the last jobs report. Now all of a sudden that's a big talking point because many analysts are trying to match what's going on with the market in the fundamentals. But to me, the things that have moved the market are squishy. We have University of Michigan, Michigan. We had conference board numbers. We had Philly Non Fed, squishy, squishy, squishy. We have quant numbers coming up. To answer your question, I don't think we're going to see a huge cooling in PC, but there's no doubt in my mind to probably be a little bit cooler than the CPI rates that we had not that many weeks ago.
- [39:10]
Melissa Lee
I want to ask you about a note that I read today from bank of America saying that if the stock market, if the S&P 500 specifically dropped, dropped roughly 6, 7% or so, that they would expect Trump to have fiscal intervention. And I'm wondering how the bond market would take that, if that would be a positive thing in terms of bolstering growth or if that would be a negative thing in terms of fiscal irresponsibility.
- [39:33]
Rick Santelli
Yeah, you know, I have a hard time dealing with the what if like that because I'm not sure what kind of fiscal intervention the president would have at this point. I think the administration must understand that uncertainty is just a code word for the process of change. I think this administration has an idea where they're going, but the eggs are going to break on the way. I think that's something we're just going to have to live with and it's going to remain an unknown. I wouldn't think that the president should do something like that. I think that would accentuate some of the negatives more. But I think what he could do obviously is give us more information to reverse or at least ameliorate some of the uncertainty in the tariffs and some of the negatives of this administration with respect to what's making investors run from their stock position to take a new attitude. Safe haven and capital preservation.
- [40:27]
Melissa Lee
Rick, always great to see you. Thank you.
- [40:30]
Rick Santelli
Thank you.
- [40:32]
Melissa Lee
Rick Santelli, where do you think rates go higher?
- [40:35]
Tim Seymour
But I've been wrong. I mean I was right for a while now. Wrong. I'm surprised they're down here, but I think Rick's levels are probably right. So, you know, you have this, you have this on Friday. I think it's going to be a market moving. We actually a good auction today. I'm not confident the auction is going to be that good going forward. I think rates go higher for the wrong reasons.
- [40:51]
Melissa Lee
Coming up, Tesla in a tailspin. Shares down nearly 30% since the inauguration and now losing its spot in the trillion dollar club. One of our traders says the company could be overTaken in the EV fast lane. More on that when fast lane returns. Welcome back to Fast Money. Tesla sinking more than 8% for its worst day since October. Weak European sales numbers giving way to deeper concerns that CEO Elon Musk's political activity could be turning off customers. The stock now back at its lowest level just since after the election. Today's move taking the stock out of the trillion dollar club to its market value now sitting at $974 billion, more than 500 billion off its mid December peak. We talked about this in terms of, you know, Germany for instance, Europeans in particular not liking Elon Musk.
- [41:38]
Guy Adami
Well, it's interesting that this happens right after the election. Right. And this basically the election didn't go with the candidate that he was backing. And so when you think about just the price action today or really this week in general, the news about European sales was out a couple of weeks ago. Right. So investors are basically hitting the sell button because I think they're looking at the fundamentals of this company. And if you've just been looking at their earnings reports over the last two years, you can see the fundamentals have been deteriorating. And I think what happened in Europe over the last few months or so is really a tell on just the competition. It's a tell on that consumers have other options right now. Obviously what's going on in China. China, with the tariffs and the trade war and all this, it's not going to benefit them. You know, so 50% of their sales come from here in the US and market here seems pretty saturated. When you look at California sales that they were down, you know, year over year. That's a great market market, you know, normally for EVs, I just think that the stock is right about ready to trade on its fundamentals again. And I cannot imagine this quarter coming up is going to be particularly good. And if you think about that change that they had, that bitcoin accounting where they took a $600 million gain, that was like a quarter of the net income on a GAAP basis in that quarter. That's how they made the number. If they have to actually change that and mark it down, what do you think that's going to do for the earnings in the quarter?
- [42:54]
Melissa Lee
Mike, what do you think?
- [42:56]
Mike Koh
Yeah, I mean, Dan, sort of hitting on a couple of the key points. I mean, the hockey stick for EV sales in North America and Europe. I think we're, we're over that first bit of that. You know, this was a name that was always trading on its promise. And so if you start to see any, any signs of slowing sales, that's going to be obviously going to put some pressure on the stock. And of course there is this specter, at least in Asia, of competition from China. BYD is a formidable foe, though they did outsell Tesla at times. And, you know, it's a much more compelling product on a price basis over there. And they have an advantage because they were formerly a battery company and that's one of the biggest input costs. So you put all of those things together and it is a difficult environment for sure.
- [43:39]
Melissa Lee
Coming up, truly tipping the scales. Eli Lilly is upping the dosage but slashing the prices of its blockbuster weight loss drug Zepbound. How is impacting, impacting the stock market? Next, more fast Money into. Welcome back to Fast Money. Eli lilly jumping over 2% as it bulks up its direct to consumer weight loss offerings. The company announcing today it'll start selling Higher dose versions of Zepbound in single use vials on this Lilly Direct platform. The company also cutting the price of the lower dose vials that were already on the market by $50 each. If you take a look at the stock prices of Novo versus Eli Lilly, they seem to be getting farther and farther apart part as the year progresses here. Novo's not participating in this sort of lower cost discounted version of of their drug.
- [44:22]
Guy Adami
No doubt. And you know it's not too different than we're talking about compute in the AI space as the prices come down. You know we're hearing about demand weakening before we saw you know, some of these Lilly Direct deals and the like here. So I just think that this is a market that probably hasn't found its equilibrium. I think that you're going to continue to see demand kind of meet supply especially at a lower price point and I think think that's good for Lilly.
- [44:43]
Melissa Lee
There's a lot we don't know in terms of the trajectory of sales here too. I mean there's one for Mount I think two weeks ago saying that there's probably an element of seasonality in demand. We've seen inventory issues with Eli Lilly in terms of not being able to predict sales property. We just don't know how this uptake remains.
- [44:57]
Tim Seymour
All fair, but I'm glad you brought up novo because that's one given the move. I mean this one from 150 down to 90 just on valuation alone. I mean you back out the whole story. I think Novo is really interesting here. I'm surprised Lilly's rallied this extra $40 from that 725 bounce but here it is. But I think Novo is the play.
- [45:13]
Dan Nathan
I couldn't agree more. I mean to me I'm really surprised Nova has been pushed out. We've even gotten data from them in the last month. I mean we've had dynamics. I understand where they may be not in the same place with Lilly in terms of oil but they are still delivering a. They are more the bigger supplier to the world right now in terms of GLP and I just think valuations somewhere around 2010 times forward is pretty interesting.
- [45:37]
Melissa Lee
Up next, final trades, final trade time.
- [45:41]
Mike Koh
Mike, I think Nvidia's numbers will be good but you can use put spread collars to hedge in case they aren't.
- [45:47]
Dan Nathan
Tim, I almost forgot about my final trade because we're talking about Roscoe, Bed Bug Dog, Honeywell.
- [45:53]
Melissa Lee
Dan.
- [45:54]
Guy Adami
Yeah, Zoom. I think it's getting to a good level at 70 or so.
- [45:57]
Tim Seymour
It's Great to have you back Melms. I'm going to celebrate with a McDonald's hamburger.
- [46:02]
Melissa Lee
Thanks for watching.
- [46:02]
Edward Jones
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 Our state has changed a lot in the last 140 years. We know because MultiCare has been here guided by a single purpose making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org.