← CNBC's "Fast Money"
CNBC's "Fast Money"
Semi Stocks Diverge… And Jobs Report Impact On The Fed 9/5/25
00:44:14
Nvidia and Broadcom heading in opposite directions, as stocks wrap up the first week of September trading. What the chip stock divergence means for the broader tech trade, and if the jumps and drops will continue. Plus payrolls coming in lighter-than-expected in August, further solidifying hopes of a September rate cut by the Fed. What the data says about a weakening U.S. economy, and if a 50 basis point cut is on the table for the central bank. Fast Money Disclaimer
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Melissa Lee
Hi, it's Melissa. Before we jump into today's show, I've got something exciting to share. On December 11, we are hosting a special edition of Fast Money Live trading the holidays right here at the NASDAQ market site. You get to watch a live taping of Fast Money, meet and interact with the traders and of course, celebrate the holiday season with us. It's stocks and cheers in the heart of the city, Times Square in December. You will not want to miss this. Tickets are available now at CNBC events.com/fast money live from the NASDAQ markets out in the heart of New York City's Times Square. This is Fast money. Here's what's on tap tonight, a tale of two tech trades. Broadcom surging while in video tumbles. What the opposing moves say about the state of the semi stocks and can view concern shares. The Tylenol maker seeing their worst drop on record. The reports that have investors worried and the implications that could have on the entire vaccine space. Plus the new pay package that could make Elon Musk a Tesla trillionaire Lulu shares hit their lowest level since the depths of the pandemic. Is there any hope the stock can rebound? And a builder boom with a sharp drop in mortgage rates means for the housing trade. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Carter Worth and Mike Co. We start off with a big divergence in the two biggest semi stocks in the market. Broadcom surging more than 9% to a new record after announcing it had received a $10 billion order for AI chips from a single customer widely thought to be OpenAI the stock was the best performer in the S and P valuing the company at more than 11 1/2 trillion dollars. Nvidia meantime move sharply in the other direction. The stock dropping more than 4% at its lows, notching its six down day in seven sessions. Shares have now lost more than 8% since the company reported earnings just last Wednesday. The stock lower as well. So as Broadcom's gains so lead to pain for everyone else in the trade. I think that's a big question especially when you see this sort of transfer of market capitalization.
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Tim Seymour
Tim, it's, it's fantastic and I would argue that the numbers at least outside of the order you just discussed in terms of, of where Broadcom has now announced and it's exciting and is that Nvidia's numbers were fantastic but the stock has struggled and struggled certainly along with the broader semi space. If you look at the broader semi space wasn't a good day for amd. It was an okay day for, for Taiwan semi. And I think some of this differentiation is simply some rotation. I don't think there's anything in terms of the bottom up stories in both companies that have changed. I think the story in Broadcom is extraordinary. The price action as a, as a function of that order I think is ex what you wanted to see if you're an investor because we sat on the desk last night, we looked at those numbers, we looked at some of the dynamics on margin in terms of sales and where they were, their customer base and it seemed as if it was set to kind of hold serve. This latest, this latest round of news really pushes it higher.
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Melissa Lee
Yeah, Bernstein, Stacey Raskin was saying that, you know, on a callback with the company they basically indicated that the spend was actually accelerating and that's when they'll read staggering, staggeringly large numbers. The rotation, Mike, I thought was interesting as Tim mentioned that, you know, we saw that happen today and yet it is a rotation from Nvidia to a higher valuation stock. So it's not clear that that rotation should have happened.
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Mike Koh
It does if you think about it from the growth perspective. I think, I mean and this is really a result of Nvidia's comments when they reported and they basically said that, you know, we shouldn't necessarily anticipate that the pace of growth was going to be continued indefinitely. You know, they hinted that we were hinted, I mean they outright said it right that the growth rate was, was going to slow in the future. We should probably have expected that we're getting to A point where the amount that was being invested in their product, you know there is even the hyperscalers run out of money at some point. So the exponential growth was going to have to have some sort of functional limit to it. Broadcom just had a little bit more room and the growth rate that they're projecting right now is a little bit higher and that supports a higher multiple.
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Melissa Lee
This is the ultimate. Would you rather in the market today, Carter? The market spoke with the gain in Broadcom, but what do you say?
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Carter Worth
Yeah, well for starters, on a two year basis they're about even now, right? So one has come off and one has popped. But the intraday action is there are two ways to interpret a stock that gaps up on news and makes an important advance is in principle a bullish thing. But the stock close on the low which is say intraday, right. It couldn't stick its landing a great gymnast trips and then lands versus wobbles. It wobbled badly. Volume was heavy, about 26 billion in value traded. My hunch is that it will fill this gap that it left behind from today's news related pop. Long way to answer which one here now still a Vago because at least it's doing something positive in video has broken trend. And finally let's just say this and Tim makes this point. The SOX still has not exceeded its July high. That's a problem. What's left? News Bravago. Let's out news from Nvidia. We heard from Nvidia. What is it that pushes semis higher now below where they were from July of a year ago.
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Melissa Lee
And I think that you could even pose that you flagged the semiconductors a lot. But when you take a look at today's action, it wasn't just Nvidia. Microsoft also had a very difficult day. And so you know, I don't know if there's a broader question about this trade that had been so good, the trade which, you know, maybe that was a different phase of the story.
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Tim Seymour
Well, at some point labor weakness starts to. You could bleed it into enterprise weakness and you can bleed it into this place that I think certainly Microsoft has is been very comfortable and the resurgence in Microsoft to make new relative highs was something also that we'd been waiting for. And it was part of I think at least the most recent move in markets higher along with Nvidia. But again Microsoft which had been dead money for a year. And so some of the dynamics I think around the core business, around the margin profile of the company, I think people we're able to get comfortable with. I just think today's price action is tricky because today was such an important day in terms of how people perceive the impact of the payroll number, which will spend dice and sliced all day. We'll spend a little time on it. But ultimately what it means for interest rate sensitives, what it means for the growth trade, what it just simply means for market dynamics, which. Which had to take a breath, which this has been the probably of all the September we've come into. Boy, I feel like this is the one where we expected that September pullback more than any. The fact that the biggest stocks in the market have taken a breather for a couple of days. I'm not ready to call it a trend change, but I do think again back to we're coming off of broadcom numbers where 20 billion in revenues is more than people expected to see. You've got a multi year growth story and I don't think we have less than a multi year growth story at Nvidia, but we're a few, you know, we're now a couple word 10 days removed from that number.
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Carter Worth
Just getting into the granular since we're speaking in Microsoft on the day that it gapped up on its news, it closed literally on the low and that was the high. It's been drifting down since that point. So intraday action exhaustion is what it's called where you have this euphoria, a lot of money and then all of a sudden there's no one left to buy. There's a silence that's not good. And that is what happened right today with Avago.
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Melissa Lee
I love how he calls it Avago still, because you forget that the ticker.
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Tim Seymour
You know, Avgo, where did that say Alphabet or Google?
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Carter Worth
I still say Google.
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Melissa Lee
I know, me too.
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Carter Worth
Okay, how about Facebook? Exactly. There are of them.
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Melissa Lee
We have to have that. I mean we will dice and slice the jobs report, Mike. But in terms of the story, the narrative of lower rates, good for growth, good for tech, or are you worried about growth and which is the winner when it comes to driving the tech trade higher?
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Mike Koh
Well, I mean, it's interesting because, you know, when I was on the floor of the Nymex and we used to just trade commodities strictly off the price action, really. You know, one of the things that you didn't like to see was when you opened at a new high and then ended up closing lower. That was kind of an unhealthy intraday pattern. When I look at the S and P today, one of the things was that you Know, I looked at the jobs number, I saw the S and P up, you know, 40 handles or whatever. I thought, okay, that makes sense. Got on a call, came back and I said, wait a minute, it's down 20 or 30 now. Which means that people were starting to say to themselves, wait, there, there is some weakness in the labor market. It's not hugely pronounced. The unemployment number isn't really terrible. But you know, when the Fed has has to cut rates maybe earlier than they want to, you can't get overly enthusiastic about it. And I think that's what the intraday price action reflected.
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Melissa Lee
For more on tech's outlook and what to expect from Apple's iPhone event next week, T. Rowe Prices. Tony Wang joins us now on set. He manages the firm Science and Tech Fund, whose top holdings include Nvidia, Apple and Broadcom. Tony, great to have you with us. Welcome to the NASDAQ market site. In terms of the action that we saw today, maybe not surprising that we saw Avgo go up so sharply, hitting a new high actually in today's session. But in terms of the market capitalization transfer from Nvidia to Broadcom, or what looked like to be a transfer from Nvidia to Broadcom, what do you make of it? Should we draw out a bigger story based on this?
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Tony Wang
Yeah, I think, you know, the price action makes sense. I think in the near term, essentially Broadcom is expanding its customer list. You know, I think a few years ago only Google was the custom player and then now they're going to four players and with open air. And so I think that naturally they're coming off of a smaller base. They're growing, they're accelerating. I think that makes sense. But if you take a look at the longer term picture, I do think the TAM is expanding. Essentially we're moving from one shot kind of chatgpt models to now long reasoning. And so it takes longer, it takes more compute, but you have better answers. And so I think overall that's like very TAM expansionary. If you look, you know, over. We've had this debate, right, like over the last five, 10 years and both stocks have done really well as leaders in the market.
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Melissa Lee
Okay, so the TAM expanding, meaning total addressable market expanding US lifts all boats, lifts Nvidia and Broadcom only. I mean, how should we look at, look at that. Is the TAM expanding specifically for Broadcom?
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Tony Wang
Yeah, I think it's, it is lifting like a lot of boats, I say, but increasingly the computer is getting harder to do and so it really plays to the number one in GPUs and I think the number one in overall custom Asics. And so those are the two players I think that benefit from the scale and R and D in the flywheel that goes, goes with it.
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Tim Seymour
So that's Tony, great to be, great to have you here. And let's drill deeper into this, this whole idea of addressable market. Because one of the things that I sense on a day like today is when we talk about Broadcom, we're talking about not just AI and deep learning, but we're talking about data center, we're talking about wireless, we're talking about this is a more diversified chip play. Right. And, and after the kind of move that's been so AI centric on a day when people are starting to question at least some broader elements of the economy and the market, I'm not sure that we're supposed to do a whole lot more than just think about them on a payroll day. I don't think the world changed today. But is that the story? Is it that Broadcom really is broader and will this give more sustainability to this relative value trade today? That's not really relative value.
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Tony Wang
Yeah. So I think that, you know, they, Broadcom has a lot of different businesses, they're very broad based and you're seeing the broad based business also recover too, meanwhile is actually accelerating. So you have these two growth engines that are probably working in a good way over the next 12 months. But in terms of what's really breaking the stock out, I do think is the AI number. I mean Hawk over the years has been pretty like, you know, he's been, he doesn't like to get you too excited about like semis all of a sudden growing. But like here, I mean, I think that growth is real. And so, you know, with adding a leg of growth here, it does sound.
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Melissa Lee
Like according to the analyst notes, I read that he was very positive, very sort of guiding people higher. Have you talked to Hawk? Is that the message that you're getting even away from the earnings call?
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Tony Wang
Yeah, absolutely. So, I mean Hawk is, has been incrementally bullish, I would say every quarter over the last couple of years. And usually they try. Hawk tries to keep us pretty tempered in our expectations. But I do think this is a change of tone just because it's become such a big market and they are so well positioned with custom.
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Melissa Lee
And on a day when we are seeing the markets cope with the possibility of a growth scare, how do you factor that in? How does that change your view of tech? Is it is the Trade defensive or will that be caught in a growth scare?
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Tony Wang
Yeah, I mean, I think that's a great question. Essentially. I think that you know, August and September are always seasonally kind of strange and like, you know, there's always a positioning and I do think that position could have gone a little extreme in some pockets. But you know, I think that is just sort short term noise and if you know the numbers continue to be good for. I think that if you want to own that these are like quality companies that are really compounding and for the, for the growth you're getting, it's actually not that expensive. I know a lot of people make comparisons with the tech bubble, but this is largely numbers driven if you look at it.
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Carter Worth
And then just in terms of semis versus tech overall, if you had to just. Would you rather for the next 12 months, General Tech or semiconductors? We know that semi's relative performance to the tech sector peaked in 1994. Incredibly. Right. They've been a very poor area of the market versus all tech because tech has big winners in it like Apple and Microsoft. If you had to make a one year bet semis bet one or tech ex semis bet two. Thanks. 12 months, which would it be?
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Tony Wang
Yeah, I think we are still in the build out phase for infrastructure and semis essentially is the backbone of technology. And like what's been amazing in semis is that Moore's law has been slowing. You know, essentially before kind of 2012. Semis are so easy to make. You know, you got free performance productivity because you could shrink them really easily. And now it's like inflating cost curve and things are getting harder to make and that's what and the while meanwhile performance demands are increasing. So I think that's a very attractive setup in the industry overall.
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Melissa Lee
Tony, thanks for stopping by. Great to see you. Tony Wang. Thank you, Michael. I'll pose that very same. Would you rather that Carter posed to Tony tech ex semis or semis?
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Mike Koh
Well, you know, I mean as I was just hinting before, you know, my attitude about Broadcom is that, you know, I understand why it performs so well when you see the growth basically that they're getting. And that growth also it comes from differentiated product. It's not commoditized that you're dealing with here. Which is one of the reasons why the margin forecast, the net income margin forecast for broadcom is over 50% which a few years ago was inconceivable for any business. Nvidia has shown us that this is possible, that you can get those kinds of margins, net of taxes on top of exceptional growth. And the other thing is that it is not as easy. You know, once upon a time, we thought about these as commodities, but now, you know, you build your infrastructure, you build these big platforms and data centers on this technology stack. It is not so easy. It's not like you can just simply pivot off of one technology, hardware technology, stack to another. And so they do end up getting a little bit of, you know, the benefits of scale and a little bit of a motor on them as well.
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Melissa Lee
All right, Meantime, the world's richest man could be in store for $1 trillion payday if Tesla's board gets its way. It is asking investors to approve a plan that would give Elon Musk more voting power and potentially by far, the biggest executive payout in history if it hits some, if he hits, I should say, some ambitious targets. The $975 billion package would include 423 million additional Tesla shares on top of his 13% ownership stake. But request requires the company reach a market cap of 8 and a half trillion dollars. Musk is also still in a legal battle to secure the $56 billion pay package that was originally granted in 2018 before being struck down by Delaware courts. We should also note that it's not just a market cap target, but it's also specific targets when it comes to number of vehicles delivered, number of robots delivered, number of robotaxis delivered. So it's not just a story about, let's get the stock up to a certain point, let's actually deliver on certain numbers.
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Tim Seymour
Well, fortunately, I think corporate boards have gotten a little smarter in terms of how they're trying to incentivize the C suite and in this case, the CEO. And it's not just about market cap, because goosing a stock higher has, in times been a recipe for a lot of things, including poor corporate governance. But I think this is a particularly interesting case of, again, those targets in places like Robo. I mean, Robo is the. The kind of what seems like the eternal, slightly moving target, even though we are getting closer and closer. So shouldn't be surprising to hear that this board may be consolidating more power in the hands of Elon starts to make you wonder who are the people that were appointed. And we've had different points over the last couple of years to look at the board members, how well they're compensated, where they come from, and. And question some of the independents. But for here today, if you're a Tesla shareholder, the Question is, is more Elon power and more consolidation a good thing? So far that has been the case for shareholders. I mean, let's not argue. There's no question that giving this man more control of this company has led to more share gains in the past.
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Melissa Lee
And maybe that is why we saw shares of Rivian and Lucid also trade sharply higher. Maybe it is this notion that, you know, the last eye popping targets that were set within Elon Musk's pay package were actually hit. Even though at the time the pay package was passed, it seemed nuts to think that he would hit those targets.
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Mike Koh
It seemed inconceivable. There were so many hurdles that he had to hit. So as Tim was pointing out, it wasn't just about market capitalization. He had revenue targets, you know, he had volume targets. And then of course he had the, you know, the market cap target. And each, each of those on its own seemed hard to fathom. And yet he managed to hit all of them. I think there was 12 in total in that last pay package. This would make Tesla the largest company by a factor of more than 2. Based on current valuations. 8.5 trillion. You figure that Nvidia's roundabout for. It's hard to imagine that this could be done, but there really are only two companies in history that had the kind of growth trajectory that Tesla achieved for his first pay package. Tesla was the first, Broadcom was the second. Over that period of time, that kind of geometric growth that you saw over that period, those were the only two companies that managed to achieve it. So I think if you're going to try to do that again, you have to pick the person who is at the helm of one of those two businesses and he's already at the helm of this one.
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Carter Worth
Well, just to put that 8.5 trillion in context, in the 1987 peak before the crash, total market value of the S and P was 2 trillion. And at the dot com peak it was 11. It's a big number. I would say maybe so, but I doubt it.
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Melissa Lee
All right, coming up, mortgage rates seeing their biggest drop in a year. The implications for the homebuilders and an ever evolving housing market. That's next. The first Tylenol maker can view having its worst day ever. After reports the HHS is set to link the drug to autism, former FDA commissioner Dr. Scott Gottlieb will join us for a look at what it could mean for America's vaccine policy and its impacts on innovation in the pharma space. They it.
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- [19:57]
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- [20:31]
Melissa Lee
Welcome back to Fast Money, the Wall Street Journal reporting today that HHS Secretary Robert F. Kennedy, Jr. Is set to release a report linking autism to pregnant women's use of Tylenol. That news send the maker of Tylenol down over 9%, its biggest drop since spinning off from Johnson and Johnson back in 2023. Kenview standing by its products, saying in a statement it continues to believe there is no link between the drugs used during pregnancy and autism. For more, let's bring in former FDA commissioner Dr. Scott Gottlieb. He's also a CNBC contributor and serves on the boards of Pfizer and Illumina. Dr. Gottlieb, great to have you with us.
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Dr. Scott Gottlieb
Thanks a lot.
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Melissa Lee
This is a report that he's been promising for months. He said by September, we will finally reveal what the cause of the autism epidemic is. Do you believe, based on what you have seen, because there have been other studies on this, that this could be the cause of the uptick in autism cases we've seen in recent history?
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Tim Seymour
Yeah.
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Dr. Scott Gottlieb
Well, I certainly don't. And even the way it was reported by the Wall Street Journal, they reported that this is going to be one of the things that he suggested there may be a link between this product and autism. I suspect there's going to be other things in that report as well, including perhaps some vaccine ingredients. This has been a very carefully studied question, including a study that was done in Jahm 2024, I believe they looked at 2.48 million children. They looked at families, so children and their siblings, and established no causal link between Tylenol use and pregnancy and autism. But it is the subject of a lot of litigation. There's a case pending right now in the 2nd Circuit that involves 550 families suing for hundreds of millions of dollars. And if that case does prevail, and perhaps if HHS makes a pronouncement like that that could weigh in favor of the plaintiffs in that case, the litigation would expand dramatically. I do think that there is, you know, some pattern here where we see the secretary getting behind Some of these issues championed by the plaintiffs bar. The other one was talc. If you remember, there was some panels that they held trying to look at a link between talc and certain chronic diseases. Early on they were held by fda and HHS was involved in those as well. Those stopped. And you haven't heard a lot of the discussion around that. I believe that's because from what I'm told, there was a lot of lobbying at the White House by various parties that used talc, including makeup manufacturers, manufacturers, and they backed away from that. So you could see something similar here where there's, you know, some concerns and an outcry raised around this and they try to take a more careful deliberative process.
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Melissa Lee
What do you make? I mean, there's so much going on, let's put it that way, at HHS and its various agencies that fall underneath it, the CDC as well as the fda, which you used to head, in terms of the confusion that it may be causing amongst Americans and the doctors who treat them. Senator Cassidy at the RFK Jr hearing earlier this week cited a letter that he got from a doctor friend saying, we are not sure who we're supposed to give a vaccine to. And I'm wondering, as a doctor yourself, if all of this sort of activity has caused us confusion as to what the guidelines should be for the American public.
- [23:31]
Dr. Scott Gottlieb
Yeah, not just confusion around the guidelines, the clinical recommendations, and there's certainly a lot of confusion around that, but also friction in the marketplace. I think there's going to be a lot of pharmacies and doctor's offices that are unsure how they could dispense these products. There's about 2/3 of the state's tied decisions around dispensing in pharmacies to the FDA's decision. So now that the COVID vaccines in particular, I think that's what we're referring to, have been approved by the FDA for the season. Presumably those states can provide the vaccine at the point of the pharmacy. But about a third of the states rely on ACIP recommendations. So recommendations from the cdc and those haven't come forth yet. They're not going to come forth until the end of the month in a best case scenario. And there's a lot of speculation that a CIP is going to come in with more restrictive guidance than what FDA put out. So that could imperil access in those states. Now you're seeing some states move forward, like Massachusetts, Colorado, for example, trying to obviate their existing statute that ties their decisions to a SIP to try to create more flexibility to pharmacies. And I think that may happen. There's also a question of whether or not self attestation at the point of the pharmacy is going to be sufficient. I believe it will. But as you recall, the approval was for people under the age of 65 who are at high risk of a severe Covid outcome. And the question is, will patients be able to judge for themselves whether or not they're at high risk and self attest at the point of the pharmacy? I think they will, but that's still another open question. I think all of these things are going to create a lot of friction in certain places in certain states.
- [24:56]
Tim Seymour
Dr. Gottlieb, it's Tim. Thanks for joining us. In terms of the RFK Senate hearings yesterday, it felt like we had a different rfk, felt like we had a more combative rfk. And because I think you've always been very balanced and rational in your analysis here, are people are some overreacting to those hearings or do we think there's a slightly more aggressive agenda than his onboarding hearings? And I guess bringing it back into a market context for health care and for pharma, that's been almost uninvestable for the last year and a half. Do you think the market is overreacting? I know some of that's our job. But, but I just. Your takeaway from yesterday where there is a lot of hysteria.
- [25:41]
Dr. Scott Gottlieb
Yeah. Look, I wouldn't read too much into his style at the hearing yesterday. I don't know what his approach was to that hearing, but there is a belief generally within this administration, people who work in the administration, when I talk to them, that that more combative style, there is some favor for that in the White House. And so I think nominees who go before the Senate who know that they're going to face criticism and also the administration is going to face criticism before the Senate. I think taking a more combative stance among certain people in the White House is generally viewed as favorable, and that may be how Kennedy was approaching it. I'm speculating here he may have just come off perhaps as too combative with some of those members. I think in terms of the uncertainty, there's certainly pockets of uncertainty. I think that's going to persist. I think one of the big questions going forward is whether or not there's more things in this report. This was one item leaked out tonight around the secretary intending to say that there may be a correlation between Tylenol use in pregnancy and autism. I suspect there's going to be other things in that report that also try to link certain substances to autism. And the one that I'm concerned about is I believe the secretary is likely to say that Alem, the adjuvant that's used in most pediatric vaccines, is also linked to autism. He's intimated that he intends to do that. He's tweeted about it. There's been some speculation in the press that he intends to do that. And if he does, that could put at risk the entire pediatric vaccine schedule and the vaccine enterprise in this country because it could put at risk the vaccine injury compensation program. You'll get a lot of autism claims for injury against that program. And if that program does become bankrupted or comes under stress, that could put at risk the ability of manufacturers to continue to market pediatric vaccines. So I think there's a lot of uncertainty to go forward, particularly routing the vaccines, which is the focus of the secretary. I was going to say it seems to be the focus of the secretary, but I think it is the focus of the secretary and I think he would acknowledge that.
- [27:33]
Melissa Lee
Is that why Albert Bourla, the CEO of Pfizer, we used it on the board, said that Trump effectively should have been considered for the Nobel Prize. I mean, there's a certain amount of, you know, that is going on, and a lot is in jeopardy in terms of vaccine programs. Pfizer obviously makes vaccines, and there has to be a certain amount of posturing happening. Is that what is happening at Pfizer?
- [27:59]
Dr. Scott Gottlieb
Well, look, I think people want to remind the president what a stunning public health achievement that was. And it was. And I think that there's broad bipartisan agreement around that. One of the commentators at Fox News, Mark Siegel, was the first to really write about that, suggesting that the president should be eligible for a Nobel Prize because of his work around that. And obviously Kennedy echoed Cassidy, echoed that as well, and Albert did in that statement that Pfizer put out. I think there's an effort to really remind the president how important that achievement was and his role in it and not put it at risk with some of the policies that are coming out of HHS right now.
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Melissa Lee
Dr. Gottlieb, great to see you. Thank you.
- [28:37]
Dr. Scott Gottlieb
Thanks a lot.
- [28:37]
Melissa Lee
Dr. Scott Gottlieb. We've got a newsletter we want to get to on the newest additions to the S&P 500. Mackenzie Seagulls. Got the details? Mackenzie. Hey, Mel. So we're seeing a lot of changes to the S and P indices this month. Applovin, Robinhood and Amcor Group are all joining the index effective September 22nd. This is especially notable for Robinhood, which had been repeatedly passed over despite hitting a market cap of $100 billion in July, even when smaller peers like Block were added earlier this summer. Now, inclusion in the benchmark index is expected to drive pretty big flows from passive funds. Hood shares are popping after hours, up about seven and a half percent right now. Mel. All right, Mackenzie, thank you. Mackenzie Sagalos, my code. Do you like Robinhood here?
- [29:21]
Mike Koh
I do like it. You know, we obviously have a big holding in it. We have it in one of our single stock overriding strategies as well. And actually I'm going to be at the Hood Summit next week. So, yeah, I'm a fan of the business and what they've been doing lately. And, you know, it's probably overdue. And this is certainly a more appropriate addition, I think, than some of the other names that have been mentioned. I won't bother to throw throw out who I'm thinking of, but probably everybody else can guess that there were some other names that were thrown about that I didn't think were good candidates.
- [29:54]
Melissa Lee
Well, there's a lot more fast finding to come. Here's what's coming up next.
- [29:58]
Fast Money Promo Announcer
A mortgage rate meltdown, how the drop in borrowing costs is helping the housing market and the stocks making the biggest moves. Plus, all the reaction to the latest jobs report, what the weak numbers mean for the Fed and why. Our next guest says the economy is nevertheless showing signs of getting hot again. You're watching Fast MONEY live from the NASDAQ market site in Times Square. We're back right after this.
- [30:33]
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- [31:04]
Fast Money Promo Announcer
Celebrating 30 years of Squawkbox Monday. Michael Saylor, Tom Lee, Glenn Hutchins, Leon Cooperman Squawk Box 30, Monday, 6am Eastern and streaming on CNBC.
- [31:21]
Melissa Lee
Welcome back to Fast Money. Mortgage rates seeing their biggest single day drop in over a year. The average rate on the 30 year fixed mortgage dropped 16 basis points to 6.29% today, the lowest rate since last October. The move boosting homebuilder stocks like Lennard, Darrell, Horton, Pulte Group and Toll Brothers as well as housing related names like Home Depot, Lowe's, Zillow and Restoration Hardware. Tim, obviously very good for homebuilders who no longer have to buy as much of the mortgage rate as they did before.
- [31:47]
Tim Seymour
Yeah, that's the one brain cell. But I think the three brain cell is getting into Home Depot and Zillow, which are two names I'm long so I mean just to be clear, I've Home Depot to me has been one that has also worked in, in a period where people aren't moving around a lot. But there's no question that home equity loans or HELOC loans are coming down too. People have been putting a lot of that capital to work. Zillow is both a chart and maybe Carter's got a quick thought on that. But I mean I, I think the fundamentals in terms of transaction velocity, but this is a stock that's had a three year basing period and I, the stock's interesting. I'm adding here, you just heard it.
- [32:19]
Carter Worth
Three year basing period. Look at that.
- [32:21]
Tim Seymour
I just stole his job.
- [32:22]
Carter Worth
It's a bearish reversal. He knows that. But I mean combat has been a great area since the April 7 low. There's mostly small cap or mid cap and you're talking about something that's done well, better than the market since the low and looks like they've got more to run.
- [32:37]
Melissa Lee
Yeah. Mike, what are your thoughts?
- [32:39]
Mike Koh
Yeah, XHP is I think a diversified way you could play this thing. It's 4 times the average daily call volume. The 130s were the most active ones. They are 12 basis points is going to make a huge difference. I mean really, this is just about a theme and some, some delta and we need to see the delta of options of the mortgage rates dropping. And so that's a small step, but a good one.
- [32:59]
Melissa Lee
Right? Coming up inside the latest jobs report, the dismal numbers, the rate cut implications and why our next guest is still optimistic on the economy right after this.
- [33:12]
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Missed a moment of fast. Catch us anytime on the go follow the Fast Money podcast. We're back right after this.
- [33:26]
Melissa Lee
Welcome back to Fast Money. Stocks reversing off intraday records and falling into the red to close out the week as investors digest a weak jobs report. The Dow down 220 points. The S and P falling a third of a percent in the nasdaq. Basically flat today. Up a percent for the week though. Rates meantime dropping to multi month lows while gold hit a new record. For more on what the jobs report means for the Fed and markets. We're joined by Ben Emmons, Founder and Chief investment officer at FedWatch Advisors. Ben, great to have you with us.
- [33:53]
Ben Emmons
Hey Mills, good to be on again. Thank you.
- [33:55]
Melissa Lee
So we saw that record hit on the S&P 500 early in the session and then the market started really thinking like, oh, why do we really need so many cuts? Are you worried that there is a growth scare ahead of us now?
- [34:07]
Dr. Scott Gottlieb
Really?
- [34:08]
Ben Emmons
Actually, because I've noted from the GDP data and even from some of the ISE and regional PMI data, there's a little bit of a turn higher there. If you really look at forward looking indicators, the retail spending data was solid too. And then yesterday the productivity data that came out was actually really strong and that's a good signal. So it seems that the economy has moved out of the summer swoon, so to speak. But we're dealing with this labor market weakness which is traditionally a lagging indicator. And that labor market weakness I think troubled the market today. But the underlying economy shows some level of strength. So I think we're setting ourselves up for a stronger fall period. As the Fed falls through on these rate cuts, it will stimulate once again.
- [34:50]
Melissa Lee
The economy as long as inflation remains tame. And maybe that is the biggest wild card we're getting CPI next week and if it proves to be hot, that is really a quandary that the Fed will be in and the markets as well for that matter.
- [35:08]
Ben Emmons
Yeah, I agree with you there because you know, there's one thing of course that, that the market will pay attention to is that we had an uptick in the unemployment rate today. So if you're getting that hotter cpi, you get a bit of the stagflation there. That's coming quickly back in the market's minds and that is obviously the negative part of it. Now the recent PC data was comforting. There was not like a significant pass through from tariffs, not an acceleration on the underlying trends of inflation. So that's the good news. But it's obviously a bit of a wild card of going in there. It will not derail the record I think for September. But if it's a harder data then this 50 basis point cut may not actually happen, which still my view, but it's I think not likely then so, so it is, it is a touchy point next week for the market.
- [35:55]
Tim Seymour
Ben. Tim. But it does mean that the dollar, which is a little further away from this, the direct hard data, even though it obviously is impacted. And that's the point, I mean we had a weaker dollar today is weaker Dollar trade back on. And if so I think without, I think gold's got 30 to 40% in the next two years. I really do. I think the gold trade's not late in its, in its life and I think it's a trade that's picking up momentum. Your thoughts on either the dollar or gold?
- [36:25]
Ben Emmons
Well, the dollar definitely could get some more weakness because it would have the discount now that the Fed's not going to do just one rate cut. It's, it's likely going to be several cuts from here and it also seems to be within the fomc more the narrative building at this moment. So, so that would in itself bring I think the dollar broadly down against, against most major currencies. The gold trade is interesting because that always is that reflection of Fed easing as an expectation and perhaps some level of inflation still plays a role in people's mind. But it's also about the uncertainty itself. We still keep to deal with this tariff uncertainty. We got the actually uncertainty about the Fed itself too of how it will play out in terms of composition. So gold I think tends to be bid up also for those reasons. So you could play this long gold short dollar trade here. I think it's a good entry point here given that it's likely this Fed has no choice but to start me moving making move more moves into year end than what previously was priced in.
- [37:24]
Melissa Lee
Thank you Ben. And by the way, we're excited they're going to join us for Fast Money Live.
- [37:29]
Ben Emmons
I love the. Yeah, it's a great event. I'll see you there.
- [37:35]
Melissa Lee
Thank you.
- [37:36]
Tim Seymour
Just got smarter.
- [37:37]
Ben Emmons
Thank you.
- [37:38]
Tim Seymour
The room just got smarter.
- [37:39]
Melissa Lee
Exactly.
- [37:40]
Tim Seymour
A lot of, a lot of guys.
- [37:42]
Melissa Lee
Well by the way, since we're talking about Fast Money Live, we should mention that ticket requests for next Fast Money Live trading the holidays, they are coming in fast and furious. We now have folks signed up for a December 11 event from France, Canada, as far away as Alaska, 17 states in fact so far, three countries. So come join the party. The show will be chock full of stocky stocking stuffers the traders best ideas for the next year. And after you watch the live broadcast here at the Nasdaq, you, you can raise a glass of holiday cheer with our trader. So to join us for this one of a kind event, scan the QR code on the screen or go to cnbc.com/fast money for your tickets.
- [38:21]
Tim Seymour
How many shopping days are left for this?
- [38:23]
Melissa Lee
I mean, I mean we need like a countdown clock or something.
- [38:25]
Tim Seymour
Fast Money Trading, the holiday shopping day.
- [38:27]
Melissa Lee
I'm sure we can look forward to.
- [38:28]
Tim Seymour
Sound of sleigh bells too, right?
- [38:31]
Melissa Lee
That and the crackling of a fire. We just need a yule log. Coming up, Lulu lows a sportswear company downward dogging it to five plus year lows after rough guidance. How long with the stocks stay on the sidelines right after this. Welcome back to Fast Money. Shares of Lululemon dropping nearly 19%, hitting their lowest level since March of 2020. That after the athleisure company cut its earnings outlook for the second time this year, projecting a $240 million hit to profit from tariffs. CEO Calvin McDonnell telling CNBC this morning that results in the US in particular were disappointing. Lulu stock has now lost more than half its value year to date. What was really interesting to me was the acknowledgment that they didn't have new product, that they when they had new product, customers responded but also the notion that they will have new product next year in the spring and that's when they're going to revive growth. The confidence that they have in that when investors may not have confidence performance in management guidance on financials was interesting.
- [39:37]
Tim Seymour
I thought we were excited about silhouette leggings. Is that am I making.
- [39:40]
Melissa Lee
Are you excited? I mean who your own.
- [39:42]
Tim Seymour
No excitement. I'm transferring my own excitement onto everyone. I'm not excited here and I guess we were just having a conversation at break about other brands that have fallen from the stratosphere, including Under Armour. And I don't know if we're at our Under Armour moment, but I do think the part of this that I do worry about is just the saturation of the Athleisure trend. And I think as Randy Connick said last night to us a year ago and said a lot of other things last night, they went into this trend at peak margin. So where margins going to stop. And again Capex as a percentage of sales seems to be going higher. I wouldn't go near this one. And I think there are some other names out there that are not necessarily going to follow the aggressive path lower as Lulu. But I am worried about some of those higher names whether they be from Deckers or whether they be from Crocs or whether they be Birkenstock. I think these are things at least to watch because the valuations are not cheap.
- [40:37]
Carter Worth
Well, it's always so remarkable to think the stock is down 68% from its peak of what two years ago and it's dropped in gap three quarters in a row. Right down 15, down 19. This one was down 19 and one could say, well, surely it must be over. But just to put it in context, Here it is, what, $167? It was $2 in 2009. The financial crisis low makes you think maybe there's more to go to. The downside point being it's never over until a stock bases and bottoms, cures and heels. But when you're in an established downtrend, you're dropping and gapping. Just resist the temptation to buy.
- [41:12]
Melissa Lee
It's still a brand. And granted it's having trouble in its core North America, I mean that that is the source of all its problems internationally. They were actually fine. China was up for instance, but off a small base. Mike, is this a turnaround story that you're keeping an eye on at least?
- [41:26]
Mike Koh
Well, it's really disappointing that they're not filling in that product gap ahead of the Christmas buying season because that's usually when I'm going over there to pick some stuff up. For our household, that's a bit of a big problem. But 9% in the E. Commerce side and 20% growth in China is not enough to make up for the gap in North America.
- [41:45]
Melissa Lee
Coming up, the Chartmasters taking out the trash. What he sees in the charts of the RSG and why this stock could be garbage. That's next. Oh boy. Welcome back to Fast money. Waste Collection company Republic Services racked up some big gains in the first half of the year. But now the Chartmaster thinks this stock might belong in the dumpster, boy, not in your portfolio. So Carter, what are the charts saying?
- [42:16]
Carter Worth
Sure, let's get right to it. Got four identical charts and then a fifth and final long term chart. So the first, as is always the case, there are no lines here, there are no drawings, which means you can see or judge it however you might. Next chart. This is the first judgment that I would make. We have a well defined trend line and a well defined topping formation. You can call it a head and shoulders, you can call it whatever you want. But we've broken trend. Take a look at the second of four identical charts. This will be third. Excuse me. Now we have converging trend lines and we've broken to the downside out of the apex of that formation, the final of the four identical charts. You can call that what they call a cup and handle in reverse. It's a topping affirmation depicted another way. Final chart. This now is interesting. This is the all data chart going back to the company's IPO in 1998. We touched the upper band of that channel to the penny and the stock hit its head. Perennially expensive. I'm a seller here.
- [43:13]
Melissa Lee
Okay. Well, it is Friday. I have Cohen Carter. So I will go to Mike Co and say what is a trade based on that chart, Mike?
- [43:19]
Mike Koh
Well, you know, one of the things about the garbage business is it tends to be stable. Stable businesses have low options premiums and that happens to be the case here. Now, these options don't trade a whole lot, but they are trading at about a 15% implied volatility. That's very low, folks, for those keeping track at home. So, you know, careful with your limit orders. But I think you could buy puts on this one.
- [43:39]
Melissa Lee
Have you ever traded Republic?
- [43:41]
Tim Seymour
No, but I was just looking at the chart and I was looking at some of the metrics and I would argue that this company is not only expensive for a garbage company, but it's expensive relative to itself. It's trading about 30% expenses to its 10 year, about 20% to its five year. The forward on this is 33 and a half. I'm listening to the experts on this and not touching it.
- [43:59]
Melissa Lee
You would think that this is defense. I mean, at a time when there is a growth scare, you think everybody has garbage all the time.
- [44:04]
Carter Worth
Time. It's probably expensive. Waste management, the other big one, they're both about 80 billion market cap. But you know, price action is price action. And as the old time expression goes, these stocks don't act well.
- [44:15]
Tim Seymour
All right, as they say.
- [44:17]
Melissa Lee
Up next, final trades. Another reminder. Fast Money Live is coming back. A special trading the holidays live event happening right here at the NASDAQ market site. The date December 11th. So put it on your calendar, scan the QR code on your screen, head on over to cnbc.com fastmoney to get your tickets. Imagine this, New York during the holidays. Front row seat to the show. We're trading 2026 in December. What could be better? You got the whole weekend. So do this, guys. Scan the code, check it out. Time for the final trade. Let's go around the horn. Mike Koh.
- [45:08]
Mike Koh
Yeah. Gold and stocks both rallied as rates fell this morning. But only gold continued to shine by the close. So I still like it. And if you're looking for an options trade, think about call spread risk reversals on gld.
- [45:21]
Tim Seymour
College football or NFL football? Opening opening weekend.
- [45:24]
Melissa Lee
I mean, last weekend was opening weekend.
- [45:26]
Tim Seymour
Well, not of NFL.
- [45:27]
Melissa Lee
I mean this is NFL college football.
- [45:29]
Tony Wang
There, she's right there.
- [45:30]
Tim Seymour
Zillow. I think these housing stocks actually, those peripherals, especially those with great charts are actually worth owning here.
- [45:37]
Carter Worth
Carter lrsg, Short and Waste Management, but most people are long only, so if you've got them, trim them.
- [45:43]
Melissa Lee
Thank you for watching Fast Money. We'll see you right here on next on Monday, 5pm Jim Cramer starts right now.
- [45:55]
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- [46:37]
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The right skills could make a difference. That's why our business programs teach you relevant skills you can take from the courseroom to the workplace. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.