← CNBC's "Fast Money"
CNBC's "Fast Money"
Stocks Rally As China Trade Fears Diminish… And Bank Results Ready To Go 10/13/25
00:43:43
Stocks bouncing back after Friday’s sharp sell-off. How President Trump mitigated investor fears over China Trade, and the sectors leading the charge in today’s rally. Plus Earnings season on deck, and big banks are kicking things off. What a top bank analyst sees in store for the group ahead of tomorrow’s reports, and how the financials will stack up when the numbers cross the wires. Fast Money Disclaimer
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- [00:00]
Tim Seymour
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- [00:30]
Melissa Lee
To live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones Member SIPC Live from the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Easy go, easy come markets rebounding sharply after Friday sell off. Did you already miss your chance to buy the dip or is there more volatility to come? And another ideal, shares of Broadcom surging after inking a new partnership with Open Air. All the details and what it means for the red hot semi trade. Plus we're counting down its bank earnings kickoff. Jamie Dimon goes my for rare earth investments and blooming opportunities powering the fuel cell provider to brand new highs. I'm Melissa Lee coming to you live from Studio B at the nasdaq. I'm the best tonight. Tim Seymour, Dan Nathan, Gaia Dami and Julie Beal. And we start off with the big market rebound on Wall street today. The S and P recouping about half of what it lost on Friday jumping more than a percent and a half for its best day since May. The small cap Russell 2000. The tech heavy NASDAQ seeing even bigger gains, each up more than 2% while the Dow added nearly 600 points. The action coming President Trump appeared to walk back threats of a new 100% tariff on China, posting on Truth Social yesterday, quote, don't worry about China, it will all be fine. Exclamation point. Tech and discretionary leading the way today with a recently beaten down semi soaring more than 4%. So was Friday's pullback just a blip in the now three year old bull market or will today's comeback start to lose steam Guy hello Melissa.
- [02:25]
Guy Adami
Well listen, I mean you mentioned 50%, 60% depending on what you're looking at, we recoup. But I'll say this, I think the technical damage done last week and in sort of the days leading up to last week are enough where I don't think Friday was necessarily a blip and I think the market was looking for an excuse to sell off. It found it in the form of the comments from President Trump. But I don't think it's the end of it is what I'm saying. I do think there's some legs to the downside yet to be seen. And you know, I think again the die was cast with some of the.
- [02:54]
Melissa Lee
Technical moves that we are yak to est as they would say in Latin.
- [02:59]
Guy Adami
Wow. And I took that is four or.
- [03:00]
Tim Seymour
Five years of Latin that went right over my head. Well, this happens a lot.
- [03:04]
Melissa Lee
This is just a rest, a rest in the selling, but it will continue.
- [03:08]
Tim Seymour
Interesting guys folks in that this isn't just a blip in terms of, hey, just kidding. There's no question. We saw from the market's reaction two things. One is that this is a nervous market. We had seen volatility creeping up towards the end of the week. Even without that move, it was a choppy week at best. We've kind of run out of gas. Although we're going to talk about OpenAI's new headlines today. But the dynamics of getting a lot of macro, a lot of headlines without a lot of bottom up substance. That's the great thing about earnings season which is coming down the pike here. But I don't think there's any question the reaction we had on Friday tells you that this is a market that is nervous. It also tells you, and I think we said this on Friday is I'm not sure there aren't a lot of people that want to buy dips out there right now. That mentality is I think well in place. But the news flow needs to support it.
- [03:56]
Melissa Lee
Well, we did. I mean we saw the open deal which we'll get to, but we saw real sell or buying, excuse me, in semis. The places that were hardest hit on Friday got the most buying in today's session. China stocks had really nice rebound.
- [04:10]
Dan Nathan
I Wonder without that OpenAI Broadcom announcement this morning if you would have had that sort of outperformance by a lot of these names. Obviously, you know, Broadcom was up 10%, right? It wasn't down 10% on Friday. And I think when you know, you kind of just take stock of all of these deals that have been announced over the last month, whether it's OpenAI and Nvidia or the two of them together or, I mean, list goes on and on and on. Amd right. You have to say to yourself, they were coming in kind of white hot into earnings, right. So when you see all of these deals in the scale in which they're announced, you have to say to yourself, what, what are they going to leave? What else is there? Right. And so we're seeing some analyst days. Oracle has one this week. They're not going to report again for a couple of months. That's going to be really interesting what that company has to say, especially when you think about some of the stuff that's leaked out of the company about the margins in the group that is expected to get hundreds of billions of dollars in revenue over the next few years or so. And it just seems to be a lot of these companies are trading off of a level of enthusiasm that we know that we've seen before. But the scale in which we're doing it, you know, OpenAI has done $1 trillion worth of deals. $1 trillion. And they're going to take years and years to play themselves out. So that is one of the things that is fueling the this tech market.
- [05:20]
Tim Seymour
That's why I think earnings season is coming in the nick of time, because I think we're going to hear numbers out of banks, we're going to hear their business, we're going to get the Braema on the economy at a time we have a void of, of macroeconomic with the government shutdown. So I think it's really interesting though, you know, here's Gold having the kind of a day that would indicate, and I realize we've maybe we've carved through a new asset class, although we've been talking about this for a while. But Gold's move today tells you something and it tells you that even where you had a rally back in risk assets, Gold hasn't necessarily been trading well like a risk asset. But that's not today's move.
- [05:53]
Melissa Lee
Yeah. Julie Beal. I mean, Dan, I was worried about you, Dan, because I thought the glass half full kind of silver lining Dana was gone. But the silver lining to all of this, Julie, is that we didn't recoup all of Friday's losses and that it is a better setup going to earnings season.
- [06:06]
Julie Beal
Yeah, I agree. It's kind of an unusual setup going into third quarter earnings where the revisions have really been mostly higher. Oftentimes you see revisions kind of coming in and management's team just kind of meeting guidance where they are. I'm a little bit worried that if we've been raising expectations for the last three months that if we don't meet those raised expectations and we're at valuations that are pretty rich wherever you look, that you could see a more material correction. So I think it makes sense to be kind of thoughtful about the companies that you're buying. I don't think you want to be overly levered to too many of the themes going into this quarter because to me expectations look pretty high.
- [06:45]
Dan Nathan
You know, we were on the desk on Friday. Would you take the day off?
- [06:49]
Guy Adami
I was not that long weekend.
- [06:51]
Dan Nathan
I mean something like that. But Tim, Mel and I had a really good conversation, didn't we? And one of the things with the.
- [06:57]
Tim Seymour
Market, you say so ourselves.
- [06:58]
Dan Nathan
Yeah, well, no, but, but, but we were not sitting there on a Friday afternoon with the stock market down 3%, closing on its low, saying that we're going to get some massive follow through because we've been through this before, especially when it's sort of tariff related, especially when it's by tweet, that sort of thing. And so, you know, yeah, it took about a week and a half back in April to kind of sort this stuff out. I just didn't think this was going to be the sort of thing where we're going to kind of be piling on for a week or so. But it does suggest that if we can't go and take out the prior highs in the S&P 500 as we get closer to earnings, then expectations are still high despite being a couple of percent off those all time highs.
- [07:34]
Guy Adami
I'm glad Tim brought up precious metals because the gold move should be surprising a lot of people but should also be a bit of a warning sign as well. There's something going on clearly and now it's not just gold. Now everybody all of a sudden is a silver expert. But you have silver levels we haven't seen ever and ever is a pretty long time here, Mel. So the fact that gold can move the way it has in the wake of the dollar going up, dollar going down, all environments where historically it might not necessarily do well should be a bit of a warning sign.
- [08:01]
Melissa Lee
Yeah, yeah.
- [08:02]
Tim Seymour
I think the precious metals trade is rooted in a little bit of the unrest that has been. This is why you want to own gold. I do think there is an element of platinum and palladium and silver just as underperformers here that, that are really. We've seen this cyclicality. I'VE been investing in gold for 20 years. But platinum, palladium and the other PGMs tend to trade as a group. And even though you don't have some of the scarcity effects, I do think it's interesting. I also think it's interesting that that Copper continues to also have a bid. Today Copper had a very big bid and you've got a dynamic where we talk about the linkage to the build out of data center utilities and electric grid power consumption in this country. Copper is a big, big input. I think that's a trade you stay to.
- [08:45]
Melissa Lee
Yep. Well, let's talk more about the trade. Broadcom, the latest chip maker to announce a major deal with OpenAI. The two companies partnering to build and deploy custom AI accelerators, sending Broadcom shares higher by almost 10%. Mackenzie Segalis has got all the details on this one. Mackenzie.
- [09:02]
Mackenzie Sigalos
Hey Mel. So this is OpenAI locking in its hardware advantage, striking a blockbuster deal with Broadcom to co Design and deploy 10 gigawatts of custom AI accelerators purpose built for its own models and set to roll out in the back half of 2026. It is a direct challenge to Nvidia and AMD moving beyond those off the shelf GPUs and into homegrown silicon. Now, Wall street had speculated that OpenAI might be Broadcom's mystery $10 billion buyer, disclosed in its latest quarter quarterly earnings. But Broadcom's president told CNB this CNBC this morning that it's not. This deal is separate and now makes OpenAI Broadcom's fifth major hyperscaler customer. Chip stocks broadly rallying on that news. OpenAI's push into custom chips puts it in the same league as Google, which also co designs chips with broadcom. And remember, OpenAI is also getting into the business of building the infrastructure themselves, all of it a play at becoming a hyperscaler in its own right. Broadcom CEO Hawk Tan put it simply this morning, if you do your own chips, you control your destiny. He's on Mad Money tonight with our Jim Cramer.
- [10:07]
Melissa Lee
Mel Mackenzie, this is very different from the other deals that OpenAI has signed with an AMD and in Nvidia. There's no stock element to this. There's no investment element to this. What is the importance of that?
- [10:21]
Mackenzie Sigalos
Well, that was the first question I asked whether any equity was changing hands. And the significance to me is that we keep having this conversation about a circular economy economy where the companies that are selling their chips to Open Air in some ways giving them a handout, whether it's $100 billion. $100 billion investment. In the case of Nvidia, taking an equity stake in OpenAI or AMD giving equity in its company to OpenAI virtually for free in order to pay for its chips. But this is a notable departure, which seems like a promising sign because so much of the narrative around this AI bubble comes from the fact that the value creation is, is not necessarily real. And so that was the big concern. And that's something that's not a factor here. We don't know the exact numeric terms of this deal. And that's something I'm trying to find out now.
- [11:04]
Melissa Lee
Mel. But then that begs the question of how open I will pay for this sort of deal.
- [11:11]
Mackenzie Sigalos
Well, it goes back to what Sarah Fryer, the company's cfo, told me a few weeks ago, that equity is very expensive and not something that they want to hand out. So it's all about debt financing. And we started to see more creative structures just last week with Xai an SPV, where essentially Xi would rent the GPUs from the special special purpose vehicle using the GPUs themselves as leverage. And Fryer was teasing at the fact that there are a lot of financial instruments that they haven't dealt with before that they're looking into in order to fund this kind of growth. Because at this point, my back of the envelope math, we're talking about 33 gigawatt buildout and commitments made over the last three weeks at roughly $50 billion per gigawatt, $1.65 trillion. They don't have that in the bank. In fact, they haven't even wrapped their $40 billion round with SoftBank. That needs to happen by the end of the year.
- [12:01]
Melissa Lee
Yep. Mackenzie. Thanks, Mackenzie. Seagallos. And so there's all this optimism about Broadcom and the impact of Broadcom. $40 billion in revenues per year. That's all fine and good, but then it is the question of will OpenAI? How will OpenAI finance this? How will pay for this? And is that going to be good down the road?
- [12:21]
Dan Nathan
January 23rd Stargate member so we had Masa, we had Sam Altman, we had Larry Ellison, and right after that announcement, Elon Musk tweeted out something like, they don't have the money. Okay, so this is a theme that's now going on for like nine months or so. And we just said that OpenAI has done a trillion dollars worth of deals. Well, they don't have the money. And now they're going to private equity and they're doing this is all the hyperscalers. And you know, when you think about this, Mackenzie just said three 33 gigawatts. Now those numbers, you know, 33 doesn't sound like a big number. That would take like 35 million homes of energy just to power that. Okay, just think about that. So we don't have the money. We probably don't have the energy. But we're taking the debt and we're diluting equity to build out this infrastructure that's going to take three to five years that we don't even know if there's going to be demand for. The other thing is you could say, well, nuclear. Well, nuclear takes a day for nuclear.
- [13:13]
Tim Seymour
By the way, we forgot to say nuclear was, was limit up to that.
- [13:16]
Dan Nathan
Yeah, they take 15 years to build a reactor.
- [13:19]
Melissa Lee
Solar was up to.
- [13:20]
Dan Nathan
And then if you want to build 10 gigawatts. Okay, if you do a little math, guy, I don't know, you were kind of doing this on the back of the envelope. The math that could cost you $500 billion to build out 10 gigawatts. But a data center.
- [13:32]
Tim Seymour
What I, I listened to the valuation and also we got a new valuation benchmark for Open Air a couple of weeks ago. And we just, you know, she just talked about, Mac just talked about how the equities. So expensive. They don't want to, you know, they don't. I mean, I hear equity so expensive and I say, there's your currency. I would issue more equity here. I wouldn't raise debt. I would issue equity at a price level when there's no financial detail around these deals. And that's the one thing that we've known. But Dan's right. 26 gigs equals $1 trillion in debt. That needs to be raised. Like so many of these deals though, what's interesting here is this deal validates Broadcom's custom silicon approach and that they have five different massive clients and they're able to make adjustments to them. We also learned that we don't think that OpenAI was that that unnamed $10 billion client. It seems to be. That's anthropic. But again, I think OpenAI should be issuing as much equity here as they can.
- [14:30]
Guy Adami
I agree with that. And you think about. So this deal. So the market cap gain in Broadcom today was about rough back of the envelope math, about $150 billion. Think about have a market cap of $150 billion in the first place. And this headline creates that kind of value. And again, the circular nature of all this and the fact that all these companies seemingly rally on the same type of news, I think it should be concerning. And I'm with Tim on this. I mean, this is the time to use your equity as currency. Not necessarily equity means you sell equity.
- [15:01]
Melissa Lee
Yeah, but. So the 10% though, gain in Broadcom today, because it's not circular, is it more valid?
- [15:09]
Guy Adami
No.
- [15:09]
Dan Nathan
I mean, it's not. So think about this, okay? Nvidia makes all these GPUs. And Nvidia, they actually have to use this compute themselves. Right. To build out all this software and all this stuff that goes on. They're actually invested in Core Weave, which is a Neo cloud. They sell the GPUs to them and then they rent them back. So think about it. They don't want to own these GPUs that they make that they're trying to sell to every hyperscaler and anybody who wants them. And that's obviously global, too, because they don't want the depreciation of their own chips. So when you're talking about this build out of these data centers, that could take three to five years. Well, Jensen Huang and Nvidia has already told us that we're done with Hopper. We're moved on to Blackwell. Right. And we're going to be on Rubin. So what do you think? There's an acceleration of depreciation that is not being recognized. So when you think about custom silicon, all of these companies now are going to build the chips that they want for their specific tasks.
- [15:59]
Tim Seymour
Right.
- [16:00]
Dan Nathan
That they're going to be doing, which hopefully for them has a longer depreciation schedule. So I just think this is a. There's a lot of stuff going on here that I think is just. We haven't really scratched the surface yet.
- [16:11]
Melissa Lee
For more of the trade and where markets go from here. Fast money friend Jeff Mills, General Miles joins us now. He's chief Investor officer at Bessemer Trust. Jeff, it is great to see you. It's been a while.
- [16:23]
Jeff Mills
I know. Sorry, I'm stuck uptown here. Next time I'll make a visit to the studio.
- [16:27]
Melissa Lee
Please do, please do. How are you feeling about valuations here and now?
- [16:32]
Jeff Mills
I mean, I agree with what Julie said in that I think you have to pick your spots. You know, this isn't about piling into the trade. I think that there are parts of the market that are still interesting from a valuation perspective. I think the move in health care might be early on here. So playing the resurgence there, we've actually leaned into a stock like, unh, for example, down a ton, bounced off support at that 288ish level. They have new management, probably still an important player in the space. So value there. Another company like Medtronic, for example, the valuation is reasonable at 16 times. They've sort of jettisoned some of the less attractive growth businesses focus more on things like robotic surgery. So I think overall, certainly you can point to areas of the market that are expensive. But if you do pick your spots and you are careful, I think you can be active and still find value.
- [17:23]
Melissa Lee
But in terms of, of getting exposure to the trade through big cap tech like Mag 7 plus, you know, maybe a dozen others. Jeff, you think that that's just a fool's trade at this point? I mean, is it to fully value these names?
- [17:38]
Jeff Mills
I think that as long as these models continue to improve, there's a good chance that money's going to continue to chase this theme for a while, maybe beyond the point that we think is logical. So I agree with what you're saying in terms of cautious, but you have to think about certain stocks that are going to be winners and losers and mispricings along the way. I think of a stock like Google in the beginning of the summer it was trading at a 3 to 4 turn P E discount to the S&P 500. So this market gives you opportunities to lean into certain names when the narrative shifts. Taiwan semi at 21 times, you know, certainly not a ridiculous valuation. Earnings are expected to grow 17% next year and with some of the demand just around AI that we're all talking about, I think there's a reasonable chance that they beat those numbers. So I think you can lean into some of the names again. You just have to be selective.
- [18:31]
Guy Adami
I was walking to the studio on Thursday and I saw Jeff Mills from afar and he really tend.
- [18:37]
Dan Nathan
Ask him, ask him before grabbed me on 6th Avenue.
- [18:41]
Jeff Mills
So disappointing large.
- [18:44]
Melissa Lee
You're lucky you didn't get pepper sprayed.
- [18:46]
Gerard Cassidy
Fair point.
- [18:47]
Guy Adami
But Jeff, it's great to have you back. We haven't talked to you in a while. So thoughts on the bond market here? Because it's been pretty tame since the last time you probably been on. I think I'm one of the few people to think rates are going higher. It doesn't appear that way now. What are your thoughts?
- [18:59]
Jeff Mills
Yeah, I think we talked about this the last time I was on a number of months ago and my mantra has been kind of sideways to down. And I think that's probably the case. You know, I think that, you know, somewhat slower growth at least over the next quarter or so. I'm more of a growth bull longer term. But I think when you think about government shutdown, trade uncertainty, at least the appearance of a weakening labor market, you still have fed rate cuts. That serves as some gravity on yields. The question really is at what point is the bond market signaling something more sinister with the economy and lower rates actually aren't useful. The short answer is I don't think anybody really knows, but I look to those lows in the 10 year yield in the April timeframe around 385. So I think as long as we trade between, you know, 406, where we are now and 385, we're probably okay if we start to push lower. I think the bond market is telling us that there's something problematic going on in the economy that I don't necessarily see right now.
- [19:56]
Melissa Lee
Jeff, you know there's always a seat for you here at the stable. You're welcome any time.
- [20:00]
Jeff Mills
The general appreciate that.
- [20:02]
Dan Nathan
Jeff Mill, by the way, he's got huge shoes to fill. The CEO of Bessemer now just left as the cio. That's what Jeff just kind of stepped into right there. And she's a rock star. That's Holly MacDonald.
- [20:14]
Melissa Lee
Wow.
- [20:14]
Guy Adami
Wow.
- [20:15]
Melissa Lee
Good for Jeff, good for the general.
- [20:16]
Tim Seymour
Rock star.
- [20:17]
Melissa Lee
General now is not.
- [20:18]
Tim Seymour
By the way, that was my nickname. Am I getting credit for that?
- [20:23]
Melissa Lee
I gave it to Jeff.
- [20:24]
Tim Seymour
Sure.
- [20:25]
Dan Nathan
I thought you meant rocks. General Mills.
- [20:27]
Tim Seymour
You're kind of a rocks.
- [20:28]
Melissa Lee
Anyway, getting down to what Jeff was saying, Julie, now is not the time to be bearish, be wary about the valuation of certain AI trades and be long health care.
- [20:39]
Julie Beal
Yeah, I kind of agree with all of that, genuinely. I do think that there's a lot still of good news to come probably. And I wouldn't be an aggressive fighter of the trade, but I would be really suspicious of anything that is AI adjacent and doesn't have strong earnings in the here and now. Part of the reason why you can be cough at something like a Metta is that even if their potential to sell AI goes away, the rest of their business is an unregulated monopoly and the AI that they have only makes it stronger. So those types of businesses I think you can still feel confident about. I think healthcare is kind of an interesting place. It's been so maligned. And Badger Meter, that's a cane holding for the last 14 years. So I support it too.
- [21:20]
Melissa Lee
What was the name of the company again, Julie?
- [21:22]
Julie Beal
Badger Meter. That's a small cap company. Badger Meter.
- [21:26]
Tim Seymour
I Could use a badger meter guy.
- [21:27]
Guy Adami
Well, you could use a meter for a lot of things, Tim.
- [21:31]
Melissa Lee
Meantime, check out shares of Microsoft lagging both tech and the broader market over the last few months. Microsoft down a percent since August, while the S&P 500 is up nearly 3%. The overall tech sector has rallied more than 6%. Dan, you flagged this one. What is ailing Mr. Soft?
- [21:46]
Dan Nathan
All right, one of the first beneficiaries, if you think about it, they made that $13 billion, excuse me, investment in open air starting I think in 22 and kind of leaned into in 23. And so they were again, you know, a lot of that market cap that they accrued over the last couple of years was because of that investment. But they don't have the model.
- [22:03]
Melissa Lee
Right.
- [22:03]
Dan Nathan
And they also have the same situation where if they're buying all these GPUs, they have to deal with this depreciation sort of schedule. So they've also been unloading a bunch of their compute to some of the Neo clouds too. So I guess the picture here is like what's the step forward? Until they start telling us that their customers are using this compute, which they are, but using the models on them and they're basically able to charge them. I think the stock is probably stuck in the mud for a little bit. But that's a story we, we're really interested in hearing on their conference call.
- [22:32]
Guy Adami
Yeah, at its peak, I mean, I think Microsoft is probably trading close to 32 times next year's numbers, which is obviously a lot more expensive than a broader market and far more expensive than Microsoft historically trades at. And a company that is not growing nearly, in my opinion, as robustly as they were at sort of the heyday about a year and a half or two years ago. So it's a valuation thing as well.
- [22:52]
Tim Seymour
And I think that's part of what struggle here. But just look at S and look at Microsoft versus the S&P over the last two years and you're flat and you would be expecting more out of the high growth part of the market. So agree with these guys.
- [23:03]
Melissa Lee
Coming up, Investing in America, how JP Morgan is looking to align its financial plans with U.S. interests and where CEO Jamie Dimon says the big bank is putting its money to work. Plus, a number of fast movers in today's market rally the headlines behind the moves in metals, makeup, media and makeup don't go anywhere. That's when he's back in two.
- [23:26]
Joe Moglia
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- [24:23]
Mackenzie Sigalos
Has changed a lot in the last 140 years.
- [24:26]
Melissa Lee
We know because Multicare has been here guided by a single making our communities healthier.
- [24:35]
Mackenzie Sigalos
That comes from making courageous decisions, partnering.
- [24:38]
Melissa Lee
With local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org what made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game One of my favorite pieces of advice Think about.
- [25:05]
Joe Moglia
What your boss's boss needs.
- [25:07]
Melissa Lee
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta.
- [25:13]
Julie Beal
Think big to accomplish big things.
- [25:15]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to fast money. JP Morgan pledging to invest $10 billion in areas key to US national security including critical minerals and so called frontier technologies like AI and quantum computing. Shares of rare earth stocks like Critical Metals, MP Materials and USA Rare Earth all soaring again today. Quantum stocks like D Wave and Rigidity also jumping by double digit percent. Of course the seeming off ramp between China and the US that certainly helped the rare earths trade today helped the rare earth trade.
- [25:54]
Tim Seymour
It should help JP Morgan too. I mean if you think about the smart money, you have to believe JP Morgan has been in circles where first of all Jamie Dimon, I thought, I thought he's done a masterful job of trying to position around the challenge for him of embracing blockchain and crypto, but then pointing out where blockchain was critical to where the financial industry is going. The fact of the matter is that JP Morgan, you would expect, could be some of the smartest money in this space. And investing alongside of them means that they could actually have a multiple that starts to represent higher growth. If in fact you believe this is where they're going to be.
- [26:28]
Guy Adami
We have a lot of those Quantum stocks. I'm picking one out. But it's all pretty much the same rigidity. For example, which had a huge move today, it makes it now an 18 billion with a B, an $18 billion company sitting on tops of revenue. And I'll be fair, maybe $25 million of revenue they'll do next year. So you just about price to sales. It's just an astronomical number. They would have to make those sales go from 25 million, in my opinion, to somewhere north of 2 billion to justify. And it's just we're nowhere close to it. So good luck with this. I mean, these, the momentum can continue, but the valuations make zero sense.
- [27:05]
Melissa Lee
You know, Julie, when the government was investing in rare earth companies and critical minerals, you know, you thought, oh, invest alongside the government, that's a good move. And here you are, you've got Jamie Dimon. Now you can invest alongside the US government and one of the best bank CEOs in the history of bank CEOs. Does that make you think like.
- [27:25]
Julie Beal
No, not on Quantum, anyway. I mean, I think I'm just really uncomfortable with the idea that these earnings, real earnings, are probably 10 years away for most of these companies. This is still really unproven technology. And I don't think it's really a place for a traditional equity investor, not when there's lots of other places where you can be investing. But I do recognize more that there is a role for certain banks like a JP Morgan to be taking, you know, that kind of risk. But I think it's going to be pretty incremental and at the margin. To me, this feels much more like a placating kind of press release to the Trump administration. I don't think there's a ton of meat here, candidly.
- [28:04]
Melissa Lee
Coming up, a lot of single stock action. Today's market rally. The details behind the Johnson Newmont, Estee Lauder, Warner Brothers and Tesla. Next. You're watching Fast Money live from the NASDAQ markets at in Times Square. Back right after this.
- [28:25]
Joe Moglia
Tom Blythe returns in the MGM plus original series Billy the Kid.
- [28:31]
Dan Nathan
Sheriff's on our backs from the creator of Vikings.
- [28:34]
Gerard Cassidy
I'm sick of being on the run.
- [28:36]
Joe Moglia
From now on, you and me are the hunters. The legend ends here.
- [28:39]
Tim Seymour
They want to ride together, they can die together.
- [28:44]
Joe Moglia
Billy I told you all, I ain't being taken alive.
- [28:49]
Dan Nathan
Tom Blythe is Billy the Kid.
- [28:52]
Joe Moglia
Watch now only on MGM plus what.
- [28:55]
Melissa Lee
Made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game One of my favorite pieces of advice, Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta.
- [29:14]
Julie Beal
Think big to accomplish big things.
- [29:16]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money. Stocks rallying to kick off the week, erasing more than half of Friday's steep losses. The dow jumping nearly 600 points, the S&P up 1 1/2% and the Nasdaq leading the charge up more than 2%. Shares of Estee Lauder getting a glow up. Analysts at Goldman Sachs upgrading the stock to a buy saying the stock has 30% upside. New on mining also jumping thanks to Goldman, the stock raised to buy from neutral with a new price target of $161. That's up from 119. The firm citing production growth, free cash flow and attractive relative valuations. Shares of Warner Brothers higher after reports the media company rebuffed Paramount's takeover approach as too low. Paramount reportedly thinking about upping its $20 a share offer and Tesla charging higher. The company ramping up production at its Shanghai factory. Melius also initiating the company. The stock with a 200 $520 price target and a news alert on the life of a showgirl. Guy, you're going to be interested in this. Taylor Swift's new album posting a record over 4 million US and five and a half million global album equivalent units in its first week of release. That is according to the album's label, more than one and a half billion global streams. The biggest debut of the year. You're a huge fan.
- [30:39]
Dan Nathan
I'm a huge fan, I will say and I know Guy said this earlier, you know you got a jersey by the way. The real departure though from the Tortured Poets, her last album, this was kind of repeated recorded during the ERAs tour over the last kind of two years or so. And it's something that I think a lot of musicians, you know, you're a Jacksonville musician, Guy, you'll appreciate this. It's just a fun album.
- [30:57]
Tim Seymour
First of all, I'm smart enough, I think Taylor Swift is fantastic. I mean I didn't, you wouldn't hear otherwise out of me. But I, it's nice that you're a big fan. I know you have a Kelsey jersey. You have a Kelsey jersey. I think that's sweet. Estee Lauder. This was actually the B the E in bly sep and this is a story story that's not necessarily getting back to the heydays of, of really Covid times and pre Covid when the Asia and China story was very strong. This has been a turnaround story. It's been a story of margin accretion, a change in management. I like it. And I think, I think you stay long here. You don't necessarily need to get back to the gangbusters days.
- [31:32]
Melissa Lee
All right. Meantime, there are just a few spots left for our next Fast Money LIVE event. We are trading the holidays here at the NASDAQ December 11th. And folks from all over the country and the world are descending on New York City's Times Square for this special night. Book your spot while there's still space. Scan the QR code on the screen or go to cnbc events.com fast money now. I thought it was almost, I thought it was like sold out.
- [31:53]
Tim Seymour
By the way, my understanding is she's going to be scalping outside. This is going to be a hotter ticket than Taylor Swift is what I.
- [32:00]
Guy Adami
Crazy, but I heard she might actually come.
- [32:03]
Melissa Lee
She's a huge fan of the show.
- [32:05]
Jeff Mills
Right?
- [32:05]
Guy Adami
She's, you know, you say that in Jess, the father is in the business, number one. I guarantee he's watching right now. Maybe his daughter's worth hanging out.
- [32:14]
Dan Nathan
She could be watching.
- [32:16]
Melissa Lee
Hi, Taylor. Coming up, a massive slate of bank earnings kicking off tomorrow. J.P. morgan, Wells Fargo City, Goldman Sachs, the first look at the key themes in the quarter right after this. Welcome back to Fast Money Big bank earnings kickoff tomorrow morning. J.P. morgan, Wells Fargo, Citi, Goldman Sachs, all report before the bell. Our next guest says growing tailwinds for this space should lead to positive results. RBC managing director and co head of global financials research, Gerard Cassidy joins us now. Gerard, always good to see you.
- [32:51]
Gerard Cassidy
Thank you, Melissa. Thank you for having me back.
- [32:54]
Melissa Lee
Which are you? I mean, I know you're watching all of them, George, but in terms of like the one that is sort of garnering the most investor interest, which one would it be? Because you could say, you know, Citi turnaround story may be highly valued. J.P. morgan fully valued. Wells Fargo is it's, is it really out of the penalty? But I mean, there's so many different storylines for these.
- [33:13]
Gerard Cassidy
That's very fair. And I would say that, you know, the bellwether, of course, is JP Morgan and it has been for a number of quarters or years for that matter. And it's a very diversified revenue mix, as you well know. But I think within JP Morgan and as well as Citigroup and the others that have the big investment banking and trading operations, that will be the focus point, primarily because those numbers should be very strong due to the strength of the capital markets in the third quarter. But the other thing I think investors are going to focus in on is also consumer credit. And you'll see that with all of the banks that have the big credit card portfolios, including Wells Fargo, which what the trends are in that area as well.
- [33:55]
Tim Seymour
Gerard It's Tim I guess the question I have that's the most important question for me is are banks truly rerating? You're an analyst, you look at the trends, you look at the margin trends, you look at the regulatory tailwinds, and we've come out of if who's we know where we were 15 years ago, where we were coming out of the great financial crisis. The dynamic for banks seems to me that this group deserves a better multiple than they've ever had. Whether it's price to book, whether it's P E. Your thoughts on that?
- [34:23]
Gerard Cassidy
TIM I think you're, you're going in the right direction and I'm in that, you know, traveling down that path as well. But as you pointed out, you know, you look at what happened during the financial crisis and we really have to go through a full cycle to really be able to say, okay, the banks deserve to be permanently rerated. And the reason being is that credit is so important to the profitability of the bank and a credit is tested in a down cycle, as you well know. And so what I would say is that when you look at the valuations for the group on average, you know, some banks like a JP Morgan is at a very high valuation, but the group on average is still slightly below the cyclical highs of January of 2018. But if they get through, whenever that next credit cycle comes and they get through without any significant losses or deprecation of book value, then I think I'm in your camp, we will see a rerating of the banks.
- [35:17]
Guy Adami
Gerard as I've said, you are in the hall of fame, so I'll ask you this question. Fifth, third for Comerica, $11 billion, first of many or a one off? Because one of the bull cases for the space was M&A activity in 20, 25, 26.
- [35:31]
Gerard Cassidy
Guy, thank you. You're very kind with those words and I would say one of many. You and I have been talking for years and we've been around for a while. And when you turn back the clock to the 1980s, we had 18,000 banks and thrifts in this country. We're down to about 46, 40, 300 today. Will we see more consolidation? Absolutely. Small banks being acquired and then the big regional banks like you just mentioned, a fifth third buying a Comerica. What was unique about that deal that the fifth third guys were able to achieve because of the valuation and the pricing? Tim Spence, the CEO is very focused on growing tangible book value per share and not diluting it. And this deal was not dilutive to tangible book value per share. And you cannot say that about the other deal deals. So you've got to take your hat and 5th 3rd to be able to do it. But I do think this is going to be the start of many more deals over the next 12 to 24 months.
- [36:24]
Dan Nathan
Gerard, you have a preference right here, Money centers versus let's say the more investment banking leading ones. We know that, you know, deal activities picked up. We know the trading has been really robust. And then you do have that yield curve that's deepening here a little bit. Do you have a preference?
- [36:39]
Gerard Cassidy
And it's really the question at hand and it's the one to ask because the money spend is this year because of what you just mentioned, the deal activity trading have really outperformed the regionals. But we think there's likelihood. The likelihood is the regionals could provide the leadership over the next 12 months under the following scenario where the economy remains healthy, grows, let's call it one and a half to 2%. The Fed cuts rates another 50 basis points over the next three to six months and you get a CPU curve. It's been 20 years since the Fed funds rate's been over 3% and you had a plus 75 basis point yield curve. And if we have that net interest income, which is where the regionals really excel, you're going to see that grow faster than most people expect. And then if we get the loan growth to pick up because of a resilient, resilient economy, plus the increase in capital expenditures being financed with commercial loans, I think you could find the regionals lead the space in 2026.
- [37:39]
Melissa Lee
One last quick question, Gerard. I'm just wondering if the first brands bankruptcy and bank exposure, do you think that'll be an issue on the conference call. And to what extent do you think, if at all, it's any kind of a canary in the coal mine?
- [37:52]
Gerard Cassidy
That is the $64,000 question, Melissa, on credit quality. And certainly that credit will be brought up on the calls as well as the indirect auto lender. They file for bankruptcy as well. And I think what you're going to find is that banks are going to be reluctant to talk about specific credits. But at this point in the cycle, it looks like both of those are alleged frauds. We don't know if they are or not. And if that's the case, of course it's more idiosyncratic. But you're really raising a good point because this could be, you know, a potential that is the start of another cycle. We don't believe it is because the economy is healthy, rates are going to be coming down. So we don't think this is the start of a credit cycle. But it is something we all have to watch very carefully and listen to the answers we receive on these earnings calls over the next four or five days about how the banks are looking at it.
- [38:47]
Melissa Lee
Right, Gerard? Thank you, Cassidy. Coming up, crypto back in the green today after last week's sharp pullback. And our next guest is tapping into Ethereum's potential. The details, sales and fast money returns. Welcome back to Fast money. Etherium, treasury company FG Nexus ringing today's closing bell, the Nasdaq, the company co founded by former Ameritrade CEO Joe Moglia is making a big bet on the cryptocurrency. And while Etherium has been struggling over the past week, down about 10% even with today's gains, it's up almost 170% over the last six months. Here to talk more about Ether and large crypto trends along with the broader market. So let's bring in Joe Moglia.
- [39:30]
Tim Seymour
Joe, clap them in.
- [39:32]
Melissa Lee
It's always great to see you, original sponsor Fast Money.
- [39:35]
Joe Moglia
Thank you.
- [39:37]
Melissa Lee
So there are so many companies out there now that are theorem treasury companies. They go public, they are public, their stocks skyrocket. I mean, what to you, what is so intriguing, what is so interesting about a company that is designed to acquire an asset?
- [39:51]
Joe Moglia
Well, I think, I think, you know, I think for the most part the people that grew up in the Web three world and the Defi world really, really are on top of their game. But it's a lot of people in traditional finance world that still tend to struggle with this a little bit. So if you think about where the future is five years from now, there's not going to be a stock. There's not going to be an option that could be a mutual fund, etf, anything that's not in effect tokenized stablecoins. Five years ago, nobody heard about stablecoins. Today we've got about $280 billion market. And Secretary Bessant had said that two years from now probably have a $2 trillion market. Ethereum is about 60% of that. So Ethereum's got its own blockchain and it's got programmable smart contracts that in effect can do really complex financial institutional type transactions, especially overseas, that can be done almost instantaneously, instantaneously today. And that's going to be the way of the future. So five years from now, the market that we know it today, the exchanges, 24 by 7 markets and settlement, etc. That's going to be the way of the future. And I'm not sure traditional finance has necessarily quite accepted that yet.
- [41:00]
Dan Nathan
All right, Joe, you got to tell us this, all right. You're a market legend and you really are somebody who democratize a lot of technology to a lot of investors out there. At what point did you ever think that you would be a chairman of a company that is buying digital assets? Because Larry Fink was on 60 Minutes last night and he's being questioned. At some point he didn't think crypto was a thing and now he recommends everybody should own some.
- [41:23]
Joe Moglia
Well, that's because he used to be a real traditional finance guy. Now he's a defi guy and he's a Web3 guy and appreciates the future. I mean, Larry's a pretty bright guy, right? You don't want to go against Larry, but Maybe this is 13 years ago when my partner Kyle Sermon Air and I founded actually Fundamental Global llc. And then the different things that we've looked at since then and Kyle's always been thoughtful in terms of what the future might be. And then when we started to look at the dax, the digital asset treasuries and we met my void of itch who is in charge of digital asset strategy, the combination of all those for us, when you think about the future and you think what's going on, to me this is still the early stage. It's kind of like Etherium in an equity wrapper. It's not just the Ethereum by itself, it's in the theme with an equity wrapper.
- [42:08]
Guy Adami
Joe's too humble to say this, but I will. He was the grand marshal of Columbus Day weekend. Who was going to be the parade today. The parade was cancelled. What is also seemingly being canceled is people's appetite for the United States dollar. So I'll ask you, when you think about the viability of crypto Ethereum, Bitcoin is part of it sort of built upon this concern about the US dollar as a reserve currency.
- [42:32]
Joe Moglia
I think, I think that's very much part of that. Stablecoin though really is. StableCoin and the US dollar very much wind up going together. So again guy, when you think about what the future might be, I don't, I can't. It's hard for me to fathom that Bitcoin or Solana or Ethereum is going to replace the dollar as the world's reserve currency. But for it to be a significant part of our future going forward, I think that that's very, very real. I don't see replacing the dollar, Joe.
- [43:03]
Tim Seymour
So as we think about tokenization and again FG Nexus position here and on the rails that are Ethereum, which will allow for all this, I mean what I hear is that all assets will be tokenized within, I don't know, is it 10 years, is it 5 years? Your thoughts on this? Because I think everything we're doing is really leading to that. It just, you know, the rails aren't in place yet.
- [43:22]
Joe Moglia
I would agree, totally agree with that, Tim. The fact, one of the things we're looking at when we look at real world assets, we're all, we are in the process now with tokenizing as part of fglc. We have, we have a reinsurance company and we are looking at tokenizing that risk.
- [43:37]
Tim Seymour
Risk.
- [43:37]
Joe Moglia
We're in the process of taking a look at that now. But I think going forward real world assets are going to be tokenized as the rest of the world is going to, going to be.
- [43:47]
Melissa Lee
Joe, it's always great to see you. You're always welcome here.
- [43:49]
Joe Moglia
Thank you. Thank you guys. Thank you. Good to see you.
- [43:53]
Melissa Lee
Coming up, another fueled up data deal. The move in Bloom Energy and what its partnership with Brookfield says about a power demand more fast money into.
- [44:06]
Dan Nathan
Today. We're not chip limited, we're not capital limited, we're power limited. And against that we have under invested in the energy resources of the nation for a decade and a half, maybe two decades. So if the bubble induces us to build energy capacity, that is a really good thing because energy capacity equals economic capacity.
- [44:29]
Melissa Lee
Welcome back to fast Money. That was intel CEO, former Intel CEO Pat Gelsinger this morning on Squawk box warning that the US is limited when it comes to Resources needed to power the AI boom. His remarks coming after Bloom Energy struck a deal with Brookfield Asset Management to install fuel cells to power AI data centers. Shares of Bloom rose more than 26% to a record high. So basically they make these solid oxide fuel cells, they're on site power sources and they are needed at data centers and you know, places like that to power AI.
- [45:01]
Guy Adami
So if we make it to January, it's 19 years for the first 18 if we, I don't think we ever mentioned the company Vista Energy, Constellation Energy a couple times now. Seemingly it doesn't go a week that goes by. We don't mention them because you have to given the moves and given how important they are and this is not going away. Brian Sullivan talks about, talks about this all the time. We are power constrained by the way. Very inflationary as well. I mean people, their utility bills are going up whether they like it or not. But these trades, Tim, absolutely they do.
- [45:31]
Tim Seymour
And I just think some of the traditional legacy players and whether you're talking about, you know, let's go to the big folks, Nextera, let's go to Duke. I mean these are companies that are also very well positioned at the front of where this trend is going. Constellation, to me it's not so much of a data center play is it's a nuclear pay, it's a Nat Gas play, it's a Texas play. Oh, and by the way, these are places where data centers will be built. So I like that one.
- [45:55]
Melissa Lee
Julie, how do you invest in this power aspect of the trade?
- [45:59]
Julie Beal
I think it's really tricky, right, because a lot of these are long cycle assets and like all of the other announcements that we've seen, it's really thin on details and I think that's the concern that we really have. For the ones that don't have so much regulatory exposure, that's probably better. I agree though with Tim. Constellation to me is the most compelling. Nuclear is really the way.
- [46:19]
Melissa Lee
All right, up next, final trades. Time for the final trade. Let's go around the horn. Julie Beal for just a soup so of AI exposure.
- [46:37]
Julie Beal
I like Aon, Tim.
- [46:39]
Tim Seymour
Jane Fraser's kicking butt at Citibank. And I tell you what, these numbers are going to be good. Bank has sold off a bit into these numbers.
- [46:45]
Dan Nathan
Citi, Dan, Microsoft. The underperformance is something I want to buy after earnings.
- [46:50]
Guy Adami
Gee, the City HR know about that?
- [46:53]
Melissa Lee
Maybe they're watching. Fast Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of cnbc, NBC Universal, 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 It's Cybersecurity Awareness.
- [47:44]
Dan Nathan
Month and LifeLock is here with tips to help protect your identity. Use strong passwords, set up multi factor authentication and report phishing scams. And for comprehensive identity protection, LifeLock is your best choice. LifeLock alerts you to suspicious uses of your personal information and also fixes identity theft, guaranteed or or your money back. Stay smart, stay safe and stay protected with a 30 day free trial@lifelock.com Special offer terms apply.