← CNBC's "Fast Money"
CNBC's "Fast Money"
Stocks Close Out The First Half At Record Highs… And China’s Declining Data 6/30/25
00:43:42
The first half of the year is in the books, and stocks closed it out touching fresh record highs. But can the climb continue in the back half? Where RBC’s Lori Calvasina sees the market heading next. Plus Oracle’s next move after the company announces some cloud deals, and a check on the China trade after the country’s manufacturing data shrinks for a 3rd straight month. Fast Money Disclaimer
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- [00:00]
Melissa Lee
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- [02:30]
Karen Feiderman
Thank you.
- [02:31]
Melissa Lee
We are discussing how extraordinary this quarter.
- [02:33]
Karen Feiderman
Has been mind boggling. I mean so many just you know for obviously the April low was in itself extraordinary. So to bounce from that. But just you know the in video for example from 1 to 8 to 157 in the quarter, yes they had good earnings but that can't be all of what happened there. So I mean the sentiment change Metta up Almost, you know, 130% JP Morgan up almost 20%. It's really kind of insane. And if you think about what's happened, a lot of the stuff you could imagine this was going to happen where there was going to be a big bill. Right. They were going to look to extend the tax plan and you thought okay, they'll come to some deal on tariffs. But yet the intra quarter swings are just absolutely extraordinary. So I don't know what to do about next quarter. I hope we don't have anything like this. The idea that we ended this quarter with a Vix of 16 and change is really kind of amazing.
- [03:34]
Melissa Lee
Yeah. I mean does this tell you that the market's rally is able to withstand all of this and you're here. We still are, Tim. So does that give you more confidence in where we are?
- [03:44]
Tim Seymour
Well, sentiment is very different than than fundamentals. Louie's got some views on this. I know. And it's also very different than where the economy is. And I think we all have reason to be a little bit cautious on the second half. I will say this about the first half is that this was one of the worst first half dollar on record. Certainly one of the first worst first half for the dollar since the 70s. And you talk about just that 2Q was almost a 7% move lower in Dixie or the dollar index. So some of that is very good for markets frankly some of that is good for risk in the short to medium term. In the long term it's raised a lot of structural questions about about trade, the economy, deficits, the confidence, the United States of America. But for the stock market it's actually been positive. So I think about the second quarter and I think about the re emergence of that obvious trade which is that the biggest tech companies in the world have reasserted themselves. And if you're a market player this is exactly what you wanted to see. I mean we, we closed the 2Q and I've talked about how close we've been and we haven't gotten there just yet. But the NASDAQ's really on the precipice of making a new relative high against the S and P. That's the most important thing for me. I think the semiconductor trade is. It was, it was dented but not, you know, not knocked off its track. And I think that's another big part of this.
- [04:56]
Dan Nathan
Yeah, I just say the real risk right now is if you're looking at really the S and P, the Nasdaq, they've just made these brief new highs here. When I say brief, they've just gotten above the prior highs for just a very little bit. The fact that we closed the end of the quarter, the end of the first half right there at all time highs is pretty amazing. To Karen's point, you have a Vix, you know, below 17, you have crude oil, which basically is down on the quarter, which I don't think any of us would have expected given some of the geopolitical headlines that we've had. That for some, you know, for all intents and purposes, maybe are not resolved there. The dollar, to Tim's point, great for multinationals. Right. And it really does help that big tech trade. The one thing I would just say is, you know, if you think that tech's going to continue to kind of drag this market higher, well, you better be careful just a little bit because it might not take much for the dollar to move a little bit or crude to move back higher. I just look at energy, materials, homebuilders, retail, and I'm missing one. Oh, pharma. These groups can't get out of their own way. So it's not that broad of a rally. And you could say, well, industrials are doing really well. And there's some other. But if you just think about what the Fed just said to us a couple of weeks ago, they took down their growth target for the US for the back half of the year, right? Interest rates, you think about where your yields are. I can't remember another time where market participants and even the Fed were so confused about why the next move might be lower. Just think about that, okay? Because there's a scenario where they might be able to do it. Inflation gets towards their target, you know, growth kind of solidifies here. We don't have this stagflation area sort of environment. But then the flip side of it is if you want to focus more on where they're concerned, labor and growth, that sort of thing. Well then is that old playbook where you have to lower interest rates or there's something geopolitical. So that's the one thing I look at low levels of like the vix and then I think about the dollar trade, why it's being sold and then the lack of clarity why they might lower fed funds and what that does to the 10 year. So to me, I think that makes it a little bit more challenging in the back half of the year.
- [06:44]
Laurie Calvert
So look, it's been an incredible quarter. I mean, if you go back to April 8th, we had a classic growth scale, bottom right. We bought, we went down 18.9%. And if you look at the rebound since then, it's really mimicked. In some ways though, it's been accelerated. The rebounds off the lows of things like 2010, 2011, 15, 16, 18, and even the lows that were made in 2022 and 2023. Now if you look at the rebounds nine months out on all of those, it averages about 26% and that would get you to 6270. If I, you know, when I was talking about this stat like three weeks ago, 6270 seemed far off. And so what we were telling people was the market feels kind of fairly priced, a little bit over its skis in terms of fundamentals. But if you looked at it from a sentiment perspective, there was room to run. I'm going to have to amend the second half of that sentence right now. Right. Because we're starting to even look a bit full from a sentiment perspective. I think on the discussion, the tech discussion. One thing I noticed a couple of weeks back, I was marketing outside of the U.S. i was hearing investors, you know, expressing some concerns about owning the U.S. but at the same time they're like, look, with tech and AI, productivity is better in the US Anywhere else you're going to get. So that really kind of sucked international investors back into the US that's helped as well. But I think we've had just sort of a classic sentiment rebound and it's starting to get a little bit full in here.
- [08:02]
Melissa Lee
This is based on institutional investors that you talk to, hedge fund investors that you talk to. There has. I read Jeffries had an interesting report out about the composition of the volume of trading these days. 20% is retail.
- [08:15]
Laurie Calvert
Yeah.
- [08:16]
Melissa Lee
So sentiment of retail may be very different or different from long only institutions. And I feel like the sentiment of retail investors is more positive, more optimistic.
- [08:27]
Tim Seymour
About where we are, institutional investors are paid to be cynical and to be more active on some level. And that's what they do. And that was wrong. I mean, you know, the, I think a lot of institutions, it's not, it's not all of them. And I would just say if you were in the long, short hedge fund community, outside of some global macro guys that were actually ahead of that curve, they really repositioned their books ahead of April. They were very quick to reverse field. And I think there's probably going to be some funds that when we look at two Qs, had a phenomenal, phenomenal year. But I, you know, it's interesting whether we talk to Caleb Silver where we have these conversations where we tap into the vein of what's going on with the retail investor. It's clear it's by the dip and it's long and strong, and it's been working, and it's been working a long time. I think the things for this market, though, that are, that are important is, is. Is the tech. And I realize you haven't had a lot of broadening, but I think the move in banks is very important. And I think it's very important both for the psychology of investors that for a long time have been waiting for banks. I mean, we'll talk more about this dynamic, but I think banks are very impressive, too.
- [09:29]
Laurie Calvert
So we've been tracking on retail investors the ETF flows and the passive flows generally as tracked by epfr. And you definitely saw a pop there, especially in May. It does that. Money is starting to slow. It hasn't turned negative yet, but it does look like maybe, you know, it's lost a little bit of its mojo. We're also watching the AI survey, which is just shooting up straight like a rocket. And that has given you the tell on every 5 to 10% drawdown we've seen since 2022. We are not seeing it yet, but this is, you know, the chart every Thursday, I'm harassing my team to update as soon as the data hits because it's, it's just shooting straight up.
- [10:03]
Karen Feiderman
What's a level you're looking at? That would be like, all right, this is really to super top euphoria.
- [10:08]
Laurie Calvert
You actually don't have to get to plus two standard deviations. That's where you want to sell the market over the next 12 months. If you get to plus one standard deviation since 2022, that's been calling these 5 to 10% drawdowns. It gives you a little bit of a lead. It's not coincident. And we're sort of rapidly moving back. We're between that minus one standard deviation mark but getting closer to the average and basically bulls and bears are getting close to parity again.
- [10:31]
Melissa Lee
So if there's a 10% drawdown standard, you know, garden variety, is it in tech what feels the brunt of that 10% drawdown?
- [10:40]
Karen Feiderman
Some of these, these retail names though have made all the superlives we talked about at the open look adorable relative to some of these moves. Right. If you look at things like core weave and circle and you know, pound 50%. Right. If April 2nd didn't scare the hell out of them, what will? I mean that was a pretty shocking event. I don't know. I feel like that retail would be there buy the dip has worked for so long that I think it will continue even if it shouldn't.
- [11:12]
Tim Seymour
Would you say that, that, that the bull market is totally, was it ever knocked off? Did we ever lose? I mean, is this a bull market trend that, that we have to say has been a bull market Trend since the CPI of October of 22.
- [11:24]
Laurie Calvert
I think we had a near death experience. Right. I don't think we quite, quite cross the Rubicon. And we did get a policy response that's also how we basically put in the bottom back in 2018. So it was, it was a scary event. But I do think generally, you know, we saw sentiment go down to two standard deviations below the long term average. So the sentiment perhaps got a bit worse than the fundamentals and that powered this snapback. But we came close. Near death experience is how I'd phrase it.
- [11:49]
Melissa Lee
Let's get to Apple. You're rising 2% after Bloomberg reported the company is considering a partnership with Anthropic or Open Air to power Siri, marking a reversal of its plans to develop AI in house. Cnbc. Steve Kovac's got all the details here. Steve.
- [12:03]
Steve Kovac
Yeah, Mel. And also by the way, Apple was on its way to close below a $3 trillion market cap and this boosted it right back over that mark. So up 2% as you see. And this, this is an interesting report because yes, Apple is still, according to this report, working on its own artificial intelligence LLM, but it's kind of giving itself an insurance policy here saying, you know, talking to these companies that if they can't get their own product off the ground, they though instead partner with Anthropic. That seems to be the leading one right now or OpenAI. And I'll just note like this is not a unique thing by the way, because there's perplexity is a really good example of companies that have built a layer on top of OpenAI and anthropic and had a really successful product. And we know just what this has been doing to the stock all year. Forget about tariffs for a second. It's this perception that Apple is behind in artificial intelligence. It made all these promises that it couldn't deliver or execute on and, and now it has this new target of 2026 to get this out the door. And this is just more insurance towards making that happen. So we'll have to see what ends up happening. If Apple can do it in house. We know Apple likes to do everything in house. We also know Apple doesn't like to make big acquisitions. Last week we're talking so much about Apple making a big acquisition in artificial intelligence and that just hasn't been their MO for so long now, with the exception of the Beats acquisition, of course. So you see Metta today going out there and making these big splashy hires, announcing a new super intelligence group right here. And Apple kind of taking a different, less capital intensive approach to artificial intelligence partnering either if they can't build it within and not acquiring as well now.
- [13:40]
Melissa Lee
I mean, Apple doesn't do search in house.
- [13:41]
Steve Kovac
Yeah.
- [13:42]
Melissa Lee
I mean another part of ownership. So is this a knock to to Alphabet?
- [13:46]
Steve Kovac
It could be. On the Alphabet front though. What we're really watching for, Mel, is that DOJ antitrust case where that relationship between Apple and Google where Google pays at least $20 billion a year to Apple, about a fifth of all services revenue. If that relationship gets blown up, yes, Apple will either have to find a new search partner. Perplexity was mentioned by name by Apple as a potential partner there, or they have to build it in house. This would also help with search at the same time. But we're also seeing this already kind of in action right now, Mel. When you do a search query on Siri, if you have the Apple intelligence system enabled on a newer device, it goes to chat cbt and it searches the web that way too. So it's kind of hard to tell which way this is going to go. But search is one big part of it. But the promise that they made was beyond search. It was this personal assistant uses all the data within your phone, within your apps and so forth to work on your behalf. So it's kind of a mixed bag between the two.
- [14:45]
Melissa Lee
All right, Steve, thanks, Steve Kovac. For more on the story, let's bring in DA Davidson, head of technology research, Gil Lauria. Gil, great to see you.
- [14:53]
Gil Lauria
Good to see you.
- [14:55]
Melissa Lee
You know, this is obviously a report. We don't really know anything definitively. At the same time, if you're an Apple investor who is losing faith in Apple's AI ability, should this give you comfort that they are looking and plotting a plan B, so to speak?
- [15:13]
Laurie Calvert
Absolutely.
- [15:13]
Gil Lauria
They need to have a better model in order to facilitate Siri. Clearly the efforts to do that in house have gotten them nowhere. The technology is available. The models work great. They work great in the apps. If you use the ChatGPT app, you can have a conversation there. And so there's no reason for Apple not to integrate this. They still own the consumer, they still own the relationship, they're still going to get paid for it. And this way they don't have to invest those tens of billions of dollars to develop a model in what's an increasingly complex and competitive space. Let's not forget there's four American companies racing for the best AI models and another four Chinese companies racing to have the best AI model. Why would Apple want to jump into that race when they own the consumer and they can just pick and choose the best model at any given point to provide the better AI product?
- [16:07]
Melissa Lee
Let's say they, they form some sort of partnership and they, they have an a Siri agent. That's amazing. Is that going to power the super cycle that so many people were hoping for? Does that sort of reignite hopes for that?
- [16:22]
Gil Lauria
It has to be one element. Consumers are starting to notice the AI capabilities in the iPhone, the notifications, the stuff. Email summary. I don't know if you've noticed, but you could actually start recording your phone calls and getting a transcript now if you have a newer iPhone. These capabilities do matter to consumers. But instead of the big bang that we are expecting a year ago from worldwide developer conference of all these capabilities coming in at once, they're coming in gradually. Consumers are appreciating them and they can only be used on the newer phones. So we're not going to get a super cycle, but we may still get an upgrade cycle with iPhone 17, maybe next year. And that's all that drives Apple stock really, is if we get an iPhone upgrade cycle at any point. So these capabilities will help. They're just coming in a lot more gradually than we originally anticipated.
- [17:18]
Tim Seymour
Hey, Gil. Tim. Yeah, I think it's, you know, Apple's AI capability to knock. There was none. And I think this is, I think this is great news. What's interesting to me though, this is coming on a day when Apple loses a chance to dismiss an antitrust case. So in Apple of yesteryear today's news is like it's just like it's obvious it's Apple's consumer to own and you're going to pay us to be part of this and we're going to dominate and we're going to kick you out. Today's news combined with the dismissal really means not that you know it's a done deal but it means antitrust is a much bigger issue for Apple and status quo of Apple controlling the consumer might be in question. So your thoughts on that?
- [17:54]
Gil Lauria
That actually I would say that Google is the loser here. Right. Remember we just talked about the parallel between using Google and Safari as the default and now we're going to have maybe open air in Siri as a default and we mentioned that Google wasn't even in the running. The reason they're not in the running is because of these antitrust concerns. The antitrust concerns were about the partnership between Apple and Google and because Google has dragged its feet and hasn't resolved this, Apple can't go to Google for Siri because that would extend that non competitive relationship. So they're really the loser here. Apple by working with other partners can then go to regulators and say see how we play nice. We have a lot of different partners, we pick and choose, we move around between them, we let the consumer pick that will appease regulators while Google is still stuck trying to fight regulators.
- [18:54]
Melissa Lee
Want to talk to you about Oracle which is the original reason why we invited you to the show. In an AK they revealed some pretty eye popping numbers when it comes to their multi cloud database revenue. It will grow more than 100% according to the CEO Gill Stifel upgraded the stock, highest price target on the street. Now I'm just wondering where you stand here in terms of how it's valued right now given what seems like, you know, prospects forecasts that are ratcheted higher.
- [19:21]
Gil Lauria
Yeah. So there is a lot to get excited here. Let's not forget Oracle for many years was stuck in mid single digit growth. It was really legacy technology. But they invested, they really doubled down on the hyperscaler business and the GPU rental business and that is absolutely taking off. What you do have to keep in mind though is that almost 60% of Oracle's business is declining and it's declining with 50% incremental margins. 50 While the hyperscaler business, the GPU rental business is barely profitable. So you have the situation where they may accelerate revenue growth into the teens this year. But earnings growth is going to stay single digits. So to pay 32, 33 times for that, when you can pay that from Microsoft, who by the way owns the customer and is offloading some demand into Oracle, which is why Oracle is growing, you're much better off doing it with Microsoft. Double digit revenue growth, margin expansion, even higher earnings growth. Microsoft is a much better bet at this point than Oracle.
- [20:27]
Melissa Lee
Gil, great to speak with you. Thank you. Gil Lauria of DA Davidson, he self, would you rather Microsoft, he picked my.
- [20:36]
Tim Seymour
Love when they do that?
- [20:37]
Dan Nathan
Well I think you also make the same argument for core weave too, right? So you have, you know, Microsoft's racing to build out their own data center business. Nvidia is doing the same thing. So these guys are sopping up this exit demand right now. The thing that I would really keep a close eye on with Oracle, like he just mentioned that they're seeing really just single digit growth on the EPS front and the revenue base that is actually, you know, the good revenue, the stuff in the high margin, I mean that's the stuff that capex is likely to have to increase dramatically over the next couple of years because kind of really capture that workloads that they're supposedly gotten, I don't know from who is this, the Stargate thing, is this probably a big part of that or.
- [21:12]
Melissa Lee
But they said, they, some analysts said it could be federal, it has to be open.
- [21:15]
Dan Nathan
I listen the whole landscape could change a lot between now and then. So if Oracle were to overbuild right now, I mean they're, they're like the number four, maybe five player in the cloud space right now.
- [21:26]
Tim Seymour
I thought Gil framed it perfectly. I mean they're trading a very high margin business for a very low margin business. And if you notice that the headline today was 50 billion in cloud, you know, essentially top line, didn't talk about the bottom line. And then they also fit something in there about essentially, you know, chain finance business that allows banks to, you know, more easily either evaluate credit, etc. It's a story that I think Oracle does a great job of getting the news flow out there. I mean this mark, this, this valuation is very expensive here. But I'll say it again, the market loves to reward Oracle every single time. And today after a huge move, had another huge move.
- [22:04]
Laurie Calvert
Just to round back to the discussion, one thing that's been coming out in my conversations again with international investors has been we've gone through a sloppy phase in AI evolution. Investors are coming to terms with that and actually are starting to view it as something that elongates the cycle. So I think there's also been an evolution in the patience with this trade.
- [22:23]
Melissa Lee
Coming up, a C suite shuffle for Boeing, the changes the aerospace company is making at the top and what it'll mean for the stock in the second half of the year. Plus Home Depot's distribution deal, how the retailer beat out another potential buyer and how they are hoping to build up sales. Don't go anywhere. Fast money's back in two. On WhatsApp, no one can see or hear your personal messages. Whether it's a voice call message or sending a password to WhatsApp, it's all just this. So whether you're sharing the streaming password in the family chat or trading those late night voice messages that could basically become a podcast, your personal messages stay between you, your friends and your family. No one else, not even us. WhatsApp message privately, Ryan Reynolds here from Mint Mobile.
- [23:16]
Steve Kovac
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- [23:24]
Melissa Lee
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Melissa Lee
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Melissa Lee
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- [23:33]
Dan Nathan
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- [23:33]
Steve Kovac
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- [23:37]
Melissa Lee
Of $45 for three month plan equivalent to $15 per month required new customer offer for first three months only. Speed slow after 35 gigabytes of networks busy taxes and fees extra. See mintmobile.com Earn a business degree on your terms at Capella University. Our Flexpath format is available in select programs and lets you learn on your schedule. A different future is closer than you think with Capella University. Learn more@capella.edu welcome back to Fast Money. Some news out of Boeing. In just the last hour, the aerospace giant announcing CFO Brian west will transition out of his role, be replaced by former Lockheed Martin CFO Jay Malavi. West has served as Boeing CFO for the last four years. He will remain with the company as an advisor to CEO Kelly Ortberg. And of course, course, this marks a period of it's amazing for Boeing if you think about what's happened since the Air India crash, the decline and then the full recovery basically of the shares.
- [24:31]
Tim Seymour
Yeah, and I think if you, if you think about the outgoing cfo, I mean, this is a CFO that was very in touch with the capital markets process that Boeing's. In other words, he was behind it. He was talking with the street, he was the guy. And it was really been about I know it's been about the planes, but it's been about the balance sheet. And so I think this transition is totally natural. I mean, you've absolutely changed out the entire management team. And you've also at Boeing at times had these folks that were on the board switched into CEOs chairs. I mean, the fact is that it's all still part of the same nucleus of people, but that you've brought somebody in that I think people have a lot of confidence and that this should have been expected.
- [25:09]
Melissa Lee
All right. There's a lot more fast funding to come. Here's what's coming up next. Hammering out the distributor details, how Home Depot beat out another buyer in their latest acquisition and how they're hoping to corner the home renovation business. Plus mainland manufacturing.
- [25:27]
David Riedel
The latest read on China's economy and.
- [25:30]
Melissa Lee
How the country is positioned ahead of the key tariff deadline. All the details on the China trade coming up. You're watching Fast MONEY live from the national ag market site in Times Square. We're back right after this.
- [25:48]
Steve Kovac
Ryan Reynolds here from Mint Mobile. With the price of just about everything going up, we thought we'd bring our prices down. So to help us, we brought in a reverse auctioneer, which is apparently a.
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Melissa Lee
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David Riedel
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- [26:28]
Gil Lauria
Which state will take the honors this year?
- [26:30]
Melissa Lee
The list revealed July 10th and streaming on CNBC. Welcome back to Fast Money. Home Depot winning the bidding war for products distributor GMS, agreeing to buy the company for $4.3 billion. The retailer looking to attract more sales from contractors and other home professionals. The deal bests the offer from billionaire Brad Jacobs and his company QXO. Shares of GMS hitting a new 52 week high on this news. Home Depot little change on this news too, Karen?
- [26:58]
Karen Feiderman
Yeah, I mean, given the scale of Home Depot, it's not a gigantic deal to the them. To me, qxo, which I do own, is the more interesting one. Brad Jacobs, who's had a number of Tremendous successes. XPO Logistics, United Rentals he started. So that's interesting to me. And he believes that the whole building supply business is antiquated. Right. And, and could be so much more efficient and consolidating them is the plan. And that the stock already reflects some Sixes success there beyond what he's already been able to do, which isn't a ton so far, but this is someone you want to bet on. So I like you, Excel.
- [27:35]
Melissa Lee
Yeah, we were just talking about how they just did a raise for more money potentially to make a better bid for gms.
- [27:42]
Karen Feiderman
Potentially. Right. That's what I thought at the time.
- [27:44]
Melissa Lee
Now they have a lot of money to do something else.
- [27:46]
Karen Feiderman
Yes, they do. And they did have that other bid that they did, the Beacon one which closed, but they had raised money for that. So I mean I was just looking at the whole sector though is moving because of this expectation. Not only QXO out there, but Home Depot is out there and maybe Lowe's would be out there as well.
- [28:01]
Tim Seymour
Yeah, I didn't like this deal at first for Home Depot but I mean I have to say they may be not just a step ahead, they may be three steps ahead. And again a huge salesforce that would be tough to build internally. It gives them their last mile distribution. It's Home Depot. I, you know we already knew that the pro business was really important. Now again they have that, that, that client base.
- [28:22]
Dan Nathan
Yeah. It's interesting though. We've talked about the new highs in the S&P 500. You know a lot of retail has not kept pace. Specifically these big box retailers, Wal Mart, Costco, Home Depot, they don't act particularly well even if you pull up and down a big box retail. But TJX is not trading well either. So you know, when you think about the consumer, you think about this housing market that seems a bit stuck. We've been hearing that it's getting worse and I don't have any opinion on the deal and what that makes. I mean the integration of this thing. It might be great timing for Home Depot. You know, when the housing market kind of out turns returns or at least new new builds do. But I'd be concerned about what's going on, possibly the consumer based on what? Least through the lens of the stock market with retail stocks.
- [28:57]
Karen Feiderman
What happened to Sunshine Dan?
- [28:59]
Dan Nathan
You guys are all so geeked up. So I came in here, I had somebody email me, a listener, a viewer, whatever he said, just, you know, be.
- [29:05]
Tim Seymour
The extra we need.
- [29:08]
Dan Nathan
You continue to be the sober one. And I said Listen, I had a liquid lunch. I can't really do that today.
- [29:13]
Melissa Lee
Tomorrow I'm in consumer discretionary among the least favored sectors.
- [29:18]
Laurie Calvert
Yeah, we actually just downgraded it and you know, when I was looking at, we moved a bunch of sectors around today and we decided there was a better risk reward in consumer staples, which is a sector I have hated for a very long time. So it was a big deal for us to make this move, you know. But when I was putting the downgrade and the upgrade together, I actually realized that consumer discretionary or even if you just look at like the retail etf, we haven't seen underperformance but post the rose Garden. So the idea, you know, that it's this really beaten up area and we're going to see this pop once we get trade deals. I don't see that in the price action. But I would say there's another macro signal here that's really interesting to me which is that if you look at corporate confidence surveys, they've all been falling. We haven't seen the same kind of inflections that we've seen in things like NFIB or the consumer confidence indexes. And to get M and A start to trickling in when, when corporate confidence is so lousy, you know, kind of down around past growth scare lows, 2018 lows. You know, it's really interesting to me that we're starting to see these signs alive. So we'll see if this keeps up.
- [30:17]
Melissa Lee
Coming up, a check on China mainland manufacturing contracting for a third straight month. Why? Beijing stimulus efforts are coming up short and the next move for the China trade do not go anywhere. Fast money's back into the. Welcome back to Fast Money. Stocks closing out the first half with some record closes. The S and P and Nasdaq both notching fresh all time highs each up about half a percent. The S and P also seeing its best quarter since 2023 while the Nasdaq saw its best in five years. The Dow up 275 points. Shares of Moderna up nearly 6% at its highs but closing off its best levels. The company's experimental flu vaccine showing positive late stage drop trial results which could also pave the way for a combination Covid and flu shot. Meanwhile, China's manufacturing sector contracting for the third straight month as deflation fears rift through the world's second largest economy. Inventory and employment data also declining. For more in China and ongoing trade tensions, let's bring in Riedel Research founder and president David Riedel. David, great to have you with us? Thank you. We've gotten a few more economic readings under our belt, so to speak, since the China U. S Trade war reopened with President Trump. And I'm just wondering what position is China in now as opposed to, let's say, even a month ago in these trade negotiations?
- [31:39]
David Riedel
You know, they're, they're treading a very fine line. They need to keep their factories busy, to keep people employed and keep things the, you know, economic engine running. So they need to create domestic demand that can take up some of the weaker demand from the US in the face of these 55% tariffs, which are clearly unsustainable for all sides. So they're diversifying, sending cheap goods into a bunch of other markets. Germany complaining about this. Southeast Asia, you've seen a little bit of UK uptick and you've seen quite a lot of activity, especially in the auto sector, a lot of demand domestically in China. So they see this, they know it's happening, and they're diversifying pretty quickly in terms of sopping up some of this excess, excess production given the weak US Demand.
- [32:27]
Tim Seymour
David. Tim, always great getting your views on China. I guess I'm kind of bulled up on Macao. I'm just cut and I'm long, I'm long Melco and I'm long Las Vegas Sands. And I just feel like this is one of the, the COVID trades that is yet to come back. And it didn't really, doesn't really require China stimulus for this. Am I wrong?
- [32:46]
David Riedel
No, I think you're exactly right, actually. We're bullish on domestic travel as well, which we think is going to be a great beneficiary of Chinese staying home. Beijing playing a little bit the naturalism card and people staying home to, to travel around. So we're, we're looking at each world group, which is one of the hotel companies. But I could be right alongside you on Macao. I think that Chinese are going to stay home and they're going to spend money at home, both sort of on the business side as well as the travel side.
- [33:13]
Laurie Calvert
Dave. Laurie Calverto. One question I've been getting from investors is just exactly how much inventory did companies in the US Pull from China? What's your gauge on how long has that been going on? Did it start last summer? Did start recently. And how much inventory is your best guess that US Companies have to still work through here?
- [33:30]
David Riedel
I think you've brought about two months more of inventory for US Companies. I don't think they started as late, as early as last summer. I think some of them wish they had, but I think you're starting to see that that run out here towards the end of the summer and certainly going into that critical holiday season. That's what kind of worries me. I don't think the US Consumer is ready for the kind of uptick in prices going into Christmas that are going to be embedded if this 55% tariff stays in place.
- [33:57]
Karen Feiderman
David, it's Karen Feiderman. So first of all, thanks for being on. From time to time we hear stories about delisting of Chinese stocks and sometimes they feel more relevant or close by. What's your current take on whether or not we could see that happen?
- [34:11]
David Riedel
You know, if you'd asked me a couple of years ago, I would have said absolutely, you're going to see some delisting of U.S. u.S. Listed Chinese stocks. But I, you know, it seems like the pressure is off that for now we could see the current administration make a quick decision to do something on that side. But I just don't see it happening with the kind of pressure or impetus and momentum that we saw a couple of years ago. They solve the issue of the audits with the sec, and I think that really takes the pressure off. I think China is okay to let those listings not get increased and focus on increased listings in Hong Kong and Shenzhen and Shanghai. But I don't think you're going to see delisting unless the US Chooses to do it, which I think would be a terrible idea.
- [34:53]
Melissa Lee
David, in your view at this point, what is China's greatest point of leverage over the United States? I mean, we saw rare earths as one, but then they sort of backed out. And apparently rare earths are now flowing back into the United States.
- [35:06]
David Riedel
Right, but only for six months and very much on their schedule. So I think that remains one of their big points of leverage. The other thing that I think the US Is not recognizing is the fact that so many of these supply chains to China diversified during COVID and afterwards. You know, the U.S. was 23, 24% of Chinese exports pre Covid. It's now about 15%, about the same size as the EU. And they've got a lot of other markets around South Asia and Africa and other places that they've developed for the last 15, 20, 25 years that they're really targeting now with this excess capacity. They've also been very good at developing domestic markets. So I think their ability to absorb a 30% drop in exports to the US by diversifying into domestic as well as other markets that they have supply chains to. I think that's a point of leverage that I don't think the US Is fully appreciating. But I think rare Earth is going to be back on the table. It's only six months, and that's a very, very powerful point of leverage.
- [36:04]
Melissa Lee
Yep. David, thank you. Great to see you.
- [36:06]
David Riedel
Thank you very much.
- [36:08]
Melissa Lee
DAVID riedel RIEDEL RESEARCH and that, of course, means the US China trade war could go much longer than any of us think, if China can actually withstand that for longer.
- [36:17]
Tim Seymour
I think so. And I think China's always been more focused on their own economy from, from on the inside. I think David's point on exports to the European Union, I think it's great for Germany, I think it's great for China. I think China's figuring out where bilaterally they're doing deals. The they need the U.S. let's talk about leverage. We have it, but, you know, China's not necessarily running policy around what's best for us.
- [36:38]
Dan Nathan
Well, we had it, but we blinked. That was the taco trade.
- [36:40]
Steve Kovac
Right.
- [36:40]
Dan Nathan
So you go back what is a month and a half ago right now. And so when you talk about leverage, I think that's something going into this trade war that are easy to win, we probably took for granted. And so when you think back to what the Chinese have been doing for their own economy, I feel like that they've been kind of like readying themselves for this trip. Remember last September, they started, you know, stimulating their own. They've been stimulating for four years now, like trying to prop up that consumer. And they're not going away. Right. They have deflationary pressures over there, but they're still hanging around. And a lot of that data just doesn't get any better. But I don't think that's going to put so much pressure on them because what David just said, they have been diversifying their export supply chains. And so this will be interesting. I just go back to, you know, March of 2018, we slapped tariffs in on China. We didn't have a deal until January 2020. And that was a framework for a deal.
- [37:27]
Laurie Calvert
As I talk to the investors who are bullish or talking themselves into being bullish lately, increasingly, I'm hearing, you know, there's no inflation in the data companies are managing through. And I think this inventory point is really, really important because is it a question of the tariff impacts are just getting pushed out a bit as opposed to we're skipping them entirely? I think this view that we're starting to See, get baked into the market is the idea is that we're just not going to have inflation, that we're just not going to have economic potholes. But listening to Dave makes me think they're coming up.
- [37:57]
Melissa Lee
Robinhood at record highs of brokerage going all in on crypto. What the CEO had to say about the new products they are launching and the blockchain bet helping that stock surge. Got the details next plus a full court press. The WNBA is deepening its bench. The expansion plans, adding teams to the roster. All that when Fast Money returns back into welcome back to Fast Money. Robinhood shares hitting a record high, up nearly 13% today. The company announcing that it will allow European customers to trade over 200 U.S. stock and ETFs. CNBC's MacKenzie Segalos is in Cannes, France with the details. Mackenzie.
- [38:38]
Laurie Calvert
Hey Melissa. Robinhood just launched what may be its.
- [38:41]
Tim Seymour
Most ambitious crypto push yet, offering tokenized.
- [38:44]
Laurie Calvert
Shares of OpenAI and SpaceX to users across Europe.
- [38:48]
Melissa Lee
Now this is a landmark move because.
- [38:50]
Tim Seymour
Neither company is publicly listed and access.
- [38:53]
Melissa Lee
To their equity has been limited to insiders and the ultra wealthy. So these tokens are part of a broader rollout.
- [38:59]
Tim Seymour
Robinhood plans to scale to Thousands of.
- [39:02]
Laurie Calvert
Tokenized US stocks and ETFs with 24.5trading.
- [39:07]
Melissa Lee
In Europe by the end of the year and eventually go to 24. 7 or once its own blockchain launches.
- [39:13]
Laurie Calvert
Now it's just not just about listing assets anymore.
- [39:15]
Tim Seymour
Robinhood is really trying to rebuild the.
- [39:18]
Laurie Calvert
Financial rails with this own blockchain project.
- [39:21]
Tim Seymour
And this comes as staking just relaunched.
- [39:24]
Laurie Calvert
In the US Letting users earn crypto.
- [39:26]
Melissa Lee
Yield in the app. We'll continue to work with regulators and.
- [39:31]
Gil Lauria
Bring the entire Robinhood ecosystem on chain.
- [39:35]
Melissa Lee
Starting with tokenized assets like stocks, perpetual.
- [39:38]
Gil Lauria
Futures, defi, of course, spot crypto trading. And from there we're planning to open the doors much wider.
- [39:46]
Laurie Calvert
That stock is now up nearly 140%.
- [39:49]
Melissa Lee
Year to date, just narrowly missing that.
- [39:52]
Laurie Calvert
S&P 500 inclusion earlier this month.
- [39:55]
Melissa Lee
Melissa Mackenzie, thank you. Mackenzie Seagalos in Cannes, France, where this is just announced earlier. What do you, what do you think about this move?
- [40:03]
Dan Nathan
Well, it's interesting. It's we were just saying how far they've come in five years. You know, a lot of stuff that Vlad's talking about there, it's like, you know, I mean, I don't even get it. But I think one of the things I think is really important is that this is not just a consumer driven app. They've announced some products. I know guys who have gotten off like interactive brokers who are starting to use their platforms because of the breadth of products and the quality of the new platform. So to me I do think it's interesting. The other thing I'll just say is I don't know if you guys saw so far today made a new phone 52 week high. They reintroduced crypto I think about a week ago. So it seems like investors want the thing that a lot of other investors are doing to speculate right now.
- [40:40]
Karen Feiderman
The one thing is sort of an interesting man is the lack of crypto, the lack, I'm sorry of bitcoins following along with the just I mean the stablecoin thing obviously look at circle. That's kind of insane. But you know this really transformation happening very quickly and yet bitcoin itself seems to have stalled a little bit. I would think it would have reached an all time high again and beyond.
- [41:03]
Tim Seymour
That makes sense to me. And again, who needs to own bitcoin? We can own Robinhood. I mean this has been like a 10 bagger but I mean the entire space stands, right? I mean so far look at the move Coinbase has had is up 35% a month, 90% in three months. I do think that the breadth of this trade is becoming not just again the ramp on but the other ways to play it.
- [41:24]
Melissa Lee
Coming up, expanding the roster, how the WNBA is broadening its reach and how new franchises could help grow the game. The details next, more fast money. And two, welcome back to Fast Money. Exciting news for the WNBA today. The league announcing new franchises will be coming to three cities. Cleveland, Detroit and Philadelphia. That will bring the total over the next five years to 18 teams. Let's bring in CNBC sports reporter Alex Sherman. Alex? Yeah. Big news. A historic day for the WNBA today. You mentioned three new teams coming. Really? The WNBA is in full on expansion mode right now. Golden State was introduced to the league this season. Toronto and Portland will be getting teams starting next season. And now we have a longer timeline here with Cleveland coming in 2028, Detroit in 2029 and then finally the final team in 2030. So you've got Cleveland, Detroit, Philadelphia, the final team in 2030. You know I spoke with WNBA commissioner Kathy Engelbert today and I said that is a lot of expansion in a pretty short amount of time. What gives you the confidence that you're not moving too quickly with this? And she pointed to the talent influx coming to the league. Take a listen to what she told me. Every city I go to, they I.
- [42:51]
Karen Feiderman
Get talked about around if Kathy, you should see the U17 level of play, and I went to the McDonald's All American Game this year. These are high school seniors. A bunch of them could come right.
- [43:01]
Melissa Lee
Into the W today, but they have to go to college first. So it's.
- [43:06]
Karen Feiderman
And the talents, the talent pool coming in over the next five years, from what we can see, I think is extraordinary.
- [43:14]
Melissa Lee
So she's sort of laying out the bull case for investment in the wnba. I think critics or skeptics have said, you know what, yeah, there's been a lot of renewed interest in this league or even first time interest as Caitlin Clark has come into the league. We've seen a surge in TV ratings. But what Kathy Engelbert is saying, there is basically no, this is more than Caitlin Clark. Caitlin Clark is a stepping stone to a complete revitalization in the entire sport of women's basketball. And that the younger people, people in high school even take a look at Caitlin Clark and that is stepping up the level of play throughout the ranks, high school, college and beyond. And that's why she says, look, we're not moving too fast here. We're going to have this huge talent influx coming into college basketball and, and then later coming into the wnba. Alex. Thank you, Alex Sherman. So we have the talent side of things, but at the same time, you need the sponsorship side of things. You need the ticket sales, the crowd demand for these kinds of games. Does that match up with this sort of expansion? Karen?
- [44:17]
Karen Feiderman
Yeah, that part is going insane. I mean, the, you know, the ticket sales are huge. The Valkyries, the new expansion team, Golden State, just started this year. Their ticket sales were off the charts. You also have sponsorship up gigantic numbers, like up 70%. And that was for last year. That doesn't even get to this year. Right. And then you have huge media deal changes and then you're also going to have the collective bargaining agreement, so all of the players will be paid more, which everybody wants. And then, you know, Kathy talked about this sort of inventory of great players, not just younger here, but also international. They've done an extraordinary job. It's on fire.
- [44:54]
Tim Seymour
How do the sponsors compare versus, you know, NBA, men's and what's going on. The wnba, as we know from college basketball, women's college basketball, ncaa, the draw there, and the TV sponsorship around that, you know, every year that's going up, it almost seems like exponentially. It should be based upon the who's there. Can you name some of the sponsors.
- [45:15]
Karen Feiderman
That are Liberty Mutual for the Liberty, for example?
- [45:19]
Tim Seymour
Yeah, that makes sense.
- [45:19]
Karen Feiderman
That makes it, that's a good one. J.P. morgan. I'm getting a quick we got.
- [45:23]
Tim Seymour
Yeah, I know we can talk about.
- [45:24]
Melissa Lee
The biggest of the sponsors out there. Yeah. Up next, final trades, final trade time.
- [45:36]
Laurie Calvert
Laurie Materials cheap. My analysts love it and benefits from the weaker dollar.
- [45:41]
Melissa Lee
Great to have you Laurie.
- [45:42]
Tim Seymour
Tim Great to have Laurie here. Melco I think that trade in Macao is alive and well.
- [45:48]
Melissa Lee
Karen yeah, so if rates go lower.
- [45:49]
Karen Feiderman
This is great for the for real estate trade. ZG the A class of Zillow.
- [45:54]
Dan Nathan
Dan yeah, I was surprised Apple rallied on that headline here. I'd be probably more excited to hear them buying perplexity, but I'd fade Apple here.
- [46:01]
Melissa Lee
All right, thanks for watching Fast. See you back here tomorrow at 5 for more Fast. Mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer which American states.
- [46:51]
David Riedel
Are Driving Business Surviving and Thriving? America's Top States for Business is back.
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Melissa Lee
Which state will take the honors this year? The list revealed July 10 and streaming on CNBC.